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Current Events - 02/07/2000

In Memorium — It is with a heavy heart that I must tell you about the loss of a colleague, Allen Friedmann.  Allen was aboard the ill-fated Alaska Airlines flight 261 which crashed into the Pacific Ocean off of Point Mugu.  Allen was CBA’s newest employee, brought in to handle our meetings, marketing, and membership functions.  Many of you met him at the Bank Presidents Seminar.  In the short time he was with us we came to know Allen as an eager and energetic worker.  He began immediately to help us through hotel contract renegotiations and new ideas for both meetings and marketing efforts at CBA.  He had a wealth of experience and a proven track record of increasing meeting revenues at the American Center for Design when we tapped him for a position with us.  We will miss Allen and his enthusiastic support of CBA.  His family has not yet decided where contributions may be sent in honor of Allen, but I will keep you informed.  CBA will make such a contribution at the appropriate time.

Bankruptcy Reform — The Senate passed its bankruptcy reform bill earlier this week by a vote of 83 - 14.  In the process, an amendment which would have required banks to offer low-cost basic banking accounts was withdrawn.  Earlier, an amendment limiting arbitration was also withdrawn.  The overwhelming bipartisan majorities by which bankruptcy reform passed in both the Senate and the House (the House passed its bill on May 5, 1999 by a vote of 313 - 108) gives the banking industry a strong position in the conference committee and in dealing with the White House, which has expressed strong reservations about this legislation.  The only two major non-budget bills that have passed both the House and Senate in this Congress were financial modernization (which was enacted last year) and now bankruptcy reform.  More news on conference and White House developments as they happen...

Small Business Tax Help — In 1994, the four tax agencies (IRS, Franchise Tax Board, Employment development Department, and the Board of equalization) made a commitment to provide coordinated tax education to new small businesses.  Their combined outreach efforts to date have numbered only 5,000 entities.  If you would like to be able to offer new business customers some simple, basic and accessible tax information you may want to take a look at the enclosed flyer on the booklet, Striking Gold in California.  The material can be viewed and downloaded from the Board of Equalization website at www.boe.ca.gov/pdf/strikegold.pdf.  The flyer also allows you to order copies at no charge.  There are additional materials available if you call the numbers listed in the flyer.  The Striking Gold in California publication is also available as a video and there is a directory entitled Doing Business in Sacramento County which lists local, state and federal resources for entrepreneurs.  These contacts provide a variety of related small business services and information.  This Doing Business brochure is also available from each county’s individual Small Business Development Centers.  Finally, the Lt. Governor’s Office also puts out a booklet entitled Starting and Succeeding in Business - A Guide for California Entrepreneurs.  Copies can be ordered by calling 916/455 -8994.  I hope these materials prove useful to you and your new small business customers.

The ATM Appeal, New Developments — Nine state attorneys general have joined in an amicus brief in support of the cities of San Francisco and Santa Monica as they appeal our preliminary injunction to the Ninth Circuit.  The four arguments raised in the amicus brief of the attorneys general are the same ones already addressed and repudiated both in the preliminary injunction phase of our case and in the related cases in Iowa and Connecticut.  Frankly, in my opinion the new brief does not raise any new arguments.  And simply adding a lot of signatures to those arguments does not make them any stronger.  States stand in the same position as cities as to the preemptive effect of the National Banking Act and OCC regulations.  Unless I missed something in my first reading, I do not believe their participation in this case  adds any credence to these failed arguments.  Our own Associate General Counsel, Leland Chan, had a great quote on this topic in today’s American Banker: “Obviously the Court’s responsibilities are to interpret the law and therefore, because we live in a society of Rule of Law, it doesn’t matter who is making the arguments.”

Another development comes from the City of Santa Monica.  In their opening papers on the appeal they request a decision by what is called a merits panel.  They, too, now believe that this appeal will likely resolve the entire case and they recognize that the resolution of our federal preemption claim presents a pure question of law for the court to decide.  There are no factual issues in dispute.  Again, our responsive briefs are due on February 25.  We will be busy.