Advocacy Alert- 04/28/2003

Deposit reform takes center stage in Senate

Senators will be returning to Washington next week, when it is expected that the first order of business for the Senate Banking Committee will be deposit insurance reform.  Chairman Shelby has been an outspoken opponent of ceiling increases, and there are few who believe he will eventually introduce a bill that will provide even for the indexation of ceilings.  But Shelby has not taken a public position on issues that will most affect the bottom line for bankers – caps on premiums, premium credits or refunds.  While the Treasury Department and the regulators generally oppose caps on how large the deposit fund may grow or on premiums, Shelby has not indicated his leanings on these critical issues yet.

However, a single provision bill introduced by Sen. Rick Santorum (R – Pa.) the day before the current Congressional recess began may provide an important nudge to Shelby and the Treasury (which is drafting the Shelby bill).  Santorum’s bill would simply mandate the rebate of everything in the FDIC fund over 1.4 percent of insured deposits, a provision which is in the House bill as well.   The ABA has lobbied heavily for caps on premiums, credits and rebates, and immediately hailed the Santorum bill.  A reform bill that was sponsored by Sen. Tim Johnson (D – S. D.) has no provision for caps on premiums or on rebates, and Johnson, who is ranking Democrat on the Financial Institutions Subcommittee, wasted little time labeling the Santorum measure as irresponsible.  Johnson and the regulators feel that the FDIC should have discretion over rebates and that nothing should be mandated.

Bush offers Greespan a fifth term

President Bush responded without hesitation to a reporter who noted that Fed Chairman Alan Greenspan was in the hospital that day for surgery and “wondered” about his future. President Bush immediately made clear that Greenspan deserved an unprecedented fifth term.  Greenspan’s term expires in June of 2004, at which time he will be 78.  Greenspan has not yet indicated whether he wants the post beyond 2004, but there are few who doubt that Greenspan will stay on.

FASB: Stock options must be expensed

The Financial Accounting Standards Board (FASB) decided this week that stock options must be expensed.  A FASB spokesman said options “are goods and services that are being exchanged and you must recognize it just as you would other goods and services.”  What FASB has not determined is how the options should be valued, a far more difficult question.  The board indicated that it expects to have a rule in place by some time next year.  Shareholder groups and many public officials have complained that high profile corporate failures were exacerbated by accounting gimmicks, and many corporate ballots this year contain stockholder recommendations that options be accounted for when they are issued.  The FASB vote was unanimous, leaving little doubt that the new rule would be on the books soon.

2003 Compensation and Benefits Benchmark Survey – May 2 Deadline

CBA mailed the survey documents for the 2003 Compensation and Benefits Benchmark Survey several weeks ago to all financial institutions with assets up to $10 billion.  All data must be submitted to Perry-Smith by May 2.

One major change to this year’s survey will be the reporting of compensation data by survey area.  This year, we are requesting that participants report the CBA survey area in which each employee is located, not the location of the bank’s headquarters.  This should significantly improve the meaningfulness of the data presented.   The Survey Committee also added questions regarding Executive Compensation and a variety of strategic questions to establish HR trends and identify hot topics in the industry.  We believe you and your management team will find these changes and additions very beneficial.

Please be sure that your organization will mail the survey to Perry-Smith by the May 2 deadline.  Your cooperation in this regard is critical to meeting our goal of timely publication of the survey results.  We are excited about the improvements being made to the survey and look forward to your bank’s participation again this year.

Participants needed: Legislative meetings update

The following meetings have been scheduled between CBA members and their elected officials.  If you would like more information on these meetings, or would like to participate in any of the meetings, please contact Mary Boruff at 916/441-7377, ext. 207.  If you are not available, please consider sending an officer from your bank.

You are welcome to phone in to a grassroots conference call (888/903-2663) every Thursday afternoon (4:00 pm – State Legislature / 4:30 pm – House of Representatives) prior to a scheduled district office meeting(s) to discuss CBA’s priority issues and to answer any questions you may have regarding meeting with your legislator.

DATE	TIME	LEGISLATOR	LOCATION
May 14 ***	4:00 p.m.	Assembly Member Darrell Steinberg (CBA Facilitator: James Clark)	State Capitol Sacramento
May 16 ***	10:15 a.m.	Senator Roy Ashburn (CBA Facilitator: Bob Longatti)	Bakersfield
May 16	10:00 a.m.	Assembly Member Bob Dutton * (CBA Facilitator: Rich Jett)	Rancho Cucamonga
May 16 ***	1:00 p.m.	Assembly Member Tom Harman (CBA Facilitator: Rich Jett)	Huntington Beach
May 16	2:00 p.m.	Assembly Member Jay La Suer (CBA Facilitator: Doug White)	La Mesa
May 16 ***	10:00 a.m.	Assembly Member Keith Richman (CBA Facilitator: John Reardon, Union Bank of California, Santa Clarita)	Granada Hills
May 30	2:00 p.m.	Senator Dick Ackerman (CBA Facilitator: James Clark)	Tustin
May 30	3:00 p.m.	Assembly Member John Campbell (CBA Facilitator: James Clark)	Irvine
May 30	11:00 a.m.	Assembly Member Dario Frommer (CBA Facilitator: Ray Dumser, Verdugo Banking Company, Glendale)	Glendale
May 30 ***	2:00 p.m.	Senator Sheila Kuehl (CBA Facilitator: Don Robinson, Bank of the West, Los Angeles)	Los Angeles
May 30 ***	10:00 a.m.	Assembly Member Sarah Reyes (CBA Facilitator: Bob Longatti)	Fresno
June 6	11:00 a.m.	Assembly Member Jerome Horton (CBA Facilitator: Richard Proudfit, Gateway Business Bank, Cerritos)	Inglewood
June 13	10:00 a.m.	Assembly Member Ed Chavez (CBA Facilitator: Rich Jett)	City of Industry
June 13 ***	4:00 p.m.	Assembly Member Manny Diaz (CBA Facilitator: Bob Longatti)	San Jose
June 13	10:00 a.m.	Assembly Member Rick Keene (CBA Facilitator: Steve Johnson, Butte Community Bank, Chico	Chico
June 13 ***	2:00 p.m.	Assembly Member Gloria Negrete McLeod (CBA Facilitator: Tim Walbridge, 1st Centennial Bank, Redlands)	Montclair
June 20 ***	10:00 a.m.	Assembly Member Christine Kehoe (CBA Facilitator: Mike Jones)	San Diego
June 20	10:00 a.m.	Assembly Member Carol Liu (CBA Facilitator: Rich Jett)	Pasadena
June 27 ***	2:30 p.m.	Assembly Member Paul Koretz (CBA Facilitator: Tom McCullough, First Regional City, Century City)	West Hollywood

 

*          Freshman legislator

**        Meeting rescheduled – new time

***      Meeting rescheduled – new date/time