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US Banks Set To Roll Out New Fees
Need To Regain Estimated 50 Billion Cut From New Law Passed By US Congress
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The nation's banks will be working hard to come up with new fees and products in 2010 as they try to replace more than $50 billion in revenue wiped out by new rules enacted by the US Congress, that clamp down on certain bank business practices. The changes are mostly concentrated in checking accounts and credit cards. In addition to attaching new fees to old products, banks are introducing new types of accounts that they hope will reel in new customers and reduce their funding costs.
The rules will limit some interest-rate increases, require more disclosure to customers and prohibit banks from raising interest rates on current balances unless a customer is at least 60 days behind in a payment. Credit-card companies are already slipping in new fees and practices into customer contracts ahead of the law. Issuers are closing accounts, switching cards with fixed interest rates to variable rates and introducing cards that have an annual fees. In addition to the credit-card rules, the government rules also will crack down on ways banks charge overdraft fees, which are assessed when a customer overdraws an account. These new Federal Reserve rules will require banks to receive customer consent before they can be charged such a fee. That is a significant change from the current practice, in which banks typically honor withdrawals and then levy a fee if the account is overdrawn. The Fed estimates that banks generate $25 billion to $38 billion a year in overdraft fees.
Citi Bank Repays US Government TARP Loans
Citi Bank Raised 20.5 Billion To Repay The Aid
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Citi Bank completed its repayment of $20 billion in loans received from the U.S. government at the height of the global financial crisis, becoming the last major bank to repay the aid program. The bank successfully raised securities offering in which Citigroup raised $20.5 billion, including $17 billion in common shares and $3.5 billion in tangible equity units.
Wells Fargo Bank had earlier in the week completed its repayment of $25 billion in aid received from the government. The San Francisco bank raised $12.25 billion in a common stock offering completed last Friday.
It was a victory for Chief Executive Vikram Pandit - who faced the prospect of being the last major Wall Street bank still deeply entangled with the government, a status that could have left the bank at a competitive disadvantage. The U.S. Treasury continues to hold warrants to purchase Citigroup common stock to the tune of 7.7 billion common shares, the US treasury had earlier announced it plans to sell next year.
Six More US Banks Fail, More in Trouble
FDIC Could Not Find Buyers For Them
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The Federal Deposit Insurance Corporation could nto find buyers for three of the failing six banks, all of which had relatively small amounts of uninsured deposits. Some depositors would take losses. The largest of the failures was First Federal Bank of California of Santa Monica, which had $6.1 billion in total assets and $4.5 billion in deposits. Others are OneWest Bank of Pasadena, California, OneWest Bank, which was newly-organized in March by an investor group, RockBridge Commercial Bank of
Georgia with $294 million in assets and total deposits of $292 million.
Others include, Peoples First Community Bank of Panama City, Fla., sold for $1.7 billion to Hancock Bank of Gulfport, Miss. for a one percent premium.
Citizens State Bank of New Baltimore. The FDIC couldn't find a buyer for the failed bank's deposits and announced the creation of The Deposit Insurance National Bank of New Baltimore, New South Federal Savings Bank of Irondale, Alabama, Independent Bankers' Bank of Springfield, an institution that didn't take deposits from the public, instead focusing on providing various services to other banks, including the sale of loan participations and Imperial Capital Bank of La Jolla, California.
Is God A Symbol or The "I Am" Creator
Read A Book By Dale Salwak
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Whittier, CA, December 9, 2009 - From the type of stories prevalent in the news today, one can't help but wonder if the belief that there is a true religion is both naïve and dangerous. Since wars are fought over the question of whether there really is a true religion, God is a Symbol of Something True by Jack Call (O-Books) is a fresh and much-needed look at religion for both true believers of Christianity and those raised as Christians who are now skeptics. One of the most important controversial claims Call makes is that while we are in control of whether or not we act morally, we are not in control of our own salvation, with salvation being considered the realization that basically everything really is all right.
Jack Call offers a way of understanding religion that gets to the heart of dilemmas facing modern man, both in mind and spirit, by rejecting the false predicament of choosing between believing in a literal creator God or a blind, indifferent universe. This warm and sincere book helps readers deal with existential problems by thinking through controversial claims, such as, that the Bible's account of God's personality is a symbol of the personal significance of how we each feel the ways in which we are helpless yet safe. Call also argues that we have good reasons to hope that life is as astounding at the end as it is at the beginning and, with the help of this inspiring book, we learn how the meaningfulness of life depends on how we control some important issues and accept that we have no control of others.
Visit Jack at his website at: http://www.godisasymbol.com/
Dale Salwak, Ph.D., author of Teaching Life: Letters from a Life in Literature (2008), Wonders of Solitude, Anne Tyler as Novelist, Living with a Writer, Faith in the Family:
American Consumers Continue To Cut Down on Borrowing
Tight Credit is Helping The Matter
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American Consumer lending dropped by 1.7% in October, for the 9th consecutive month. The $3.5 billion decline, caps a 4% drop in consumer lending from its July 2008 peak. Federal Reserve Chairman Ben Bernanke said Monday that the economy is unlikely to experience a "vigorous" recovery. It's not just consumers having trouble borrowing, many companies lack easy access to borrowing. The financial markets that support credit-card lending, auto loans and home mortgages not backed by the government are between 10% and 40% smaller than they were in the second half of 2007.
On the other hand, Treasury debt outstanding has jumped about 40% as the government races to finance its deficits and investors seek the safety of U.S.-backed debt. Credit markets have healed considerably, after having nearly shut down more than a year ago at the height of the global financial crisis. We are not seeing much credit card applications or offers. This year just 1.4 billion have been sent out, people for the first time were using their debit cards and draw cash out of a bank account, more than credit cards.
60 Million Americans Do Not Have Bank Accounts
FDIC Survey Reveals
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Some 60m adult Americans live without a bank account or use pawn shops and other non-bank operations to handle their finances, according to a government report that called for an expansion of basic services to the "underbanked". The report, issued yesterday by the Federal Deposit Insurance Corporation, a banking regulator, could increase political pressure on banks to do more for their communities after unprecedented government efforts to bail out the sector.
"[There is] an imperative for government and industry to expand financial access to the substantial number of households that have never been banked," the report concluded. Sheila Bair, FDIC chairman, said financial groups should offer tailored products to the underbanked. The FDIC found that some 17m US adults are in households without any bank accounts. Another 43m had accounts but were "underbanked", relying on non-bank services such as pay-day lenders and pawn shops. The number of underbanked Americans dwarfs the estimated 46m citizens who lack health insurance. Barack Obama has staked his presidency on bringing that group into the system. Almost 22 per cent of black households had no bank account compared with 3.3 per cent of white households.
US Authorities Seek Indicted Billionaire Allen Foriegn Bank Account Investors
Hoping to Nab More Tax Evaders
The United States Internal Revenue Service wants the names of U.S. taxpayers who have foreign accounts with companies owned by indicted billionaire R. Allen Stanford. The IRS filed a summons Wednesday in federal court in Dallas. It says a list of Stanford investors would help the agency check whether anyone is evading taxes by failing to report money in foreign accounts.
The request appears to be part of a crackdown against taxpayers who avoid taxes by stashing money overseas. Last month, nearly 15,000 Americans disclosed billions in offshore bank accounts under a voluntary program allowing most to avoid criminal prosecution if they paid back taxes and interest.
US Government Tells Bail Out Banks To Start Paying Up
Some Banks May Not Be Able to Stay Out of Bail Out For a While
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WASHINGTON, Nov 24 - The U.S. Federal Reserve this month asked banks that received bail out funds to submit plans to repay the government money, if they have not already repaid it. Many U.S. banks are eager to repay money borrowed under the government's $700 billion Troubled Asset Relief Program. Participation in the program comes with limitations on pay, dividend payouts and share repurchases. Nine banks may soon be allowed to repay money borrowed, if they have been able to raise common equity.
In May, the Federal Reserve tested 19 banks to see how well their capital would hold up if the economy deteriorated. Of the 19, 10 were found to need capital. The stress-tested banks that remain in the government loan program includes, Bank of America Corp, Citigroup, Fifth Third Bancorp, GMAC, KeyCorp, PNC Financial Services Group, Regions Financial Corp, SunTrust and Wells Fargo. The most complicated of them all and probably still in the intensive care unti is Citigroup, leaving the TARP program is more difficult, because the U.S. government owns common shares of the bank as well as trust preferred securities.
Biggest Banks Got Most Of the Spoils of 2009 Economic Melt Down
Ambitious Smaller Banks Are Trying To Get Bigger
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Of course, much of the spoils of the recent shakeup in the banking industry have gone to the biggest players in the business. Both JPMorgan Chase (JPM, Fortune 500) and Wells Fargo (WFC, Fortune 500) dramatically expanded their retail banking operations after they bought Washington Mutual and Wachovia respectively.
Today, the nation's 10 largest banks control approximately $3.4 trillion in deposits, according to recent FDIC data, $700 billion more than they did just a year ago. Some would even argue that the banking field is much more crowded these days with the entry of Goldman Sachs (GS, Fortune 500), American Express and GMAC, all of whom got into the deposit-taking business last fall when they were unable to access traditional sources of liquidity.
Still, that has hardly deterred many ambitious bankers looking to expand.
Los Angeles-based City National, which caters largely to affluent customers, recently indicated it was looking to expand its presence in Northern California after it acquired a branch in the Silicon Valley region in late August.
US Treasury Department To Order Cuts in CEO's Salaries
By Ken Thomas and Marcy Gordon - The Houston Chronicle
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WASHINGTON — The Treasury Department on Thursday is expected to order seven companies that have not paid back last year's government bailouts to halve their top executives' average compensation. The cuts apply to the 25 highest-paid executives at banks and other companies that received the most assistance, with salaries being slashed by as much as 90 percent, according to a person familiar with the matter.
The seven companies are Bank of America Corp., American International Group Inc., Citigroup Inc., General Motors, GMAC, Chrysler and Chrysler Financial.
Smaller companies and those that have repaid the bailout money, including Goldman Sachs Group Inc. and JPMorgan Chase & Co., are not affected.
Feinberg's decisions come days after administration officials voiced sharp criticism of plans by some firms, particularly those on Wall Street, to pay huge bonuses even as the country continues to struggle with rising unemployment and the effects of the recession. Congress passed legislation in February requiring Treasury to oversee pay at companies that took bailout money. Treasury created the pay czar's office in June as one means of implementing that law. Visit www.chron.com for full story.
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