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Current Events - 02/11/2002

Industry Brief

Deluxe Corporation, one of CBA’s Endorsed Vendors, announced that its checks have a significantly lower magnetic ink character recognition reject rate than its competitors’ checks. A study by Qualpro showed that the reject rate of Deluxe’s competitors’ checks nearly tripled that of Deluxe…A recent Wall Street Journal article questioned the effectiveness of the Office of the Comptroller of Currency (OCC), citing the OCC’s defense of the banking industry in California’s ATM fee fight as a conflict of interest. The article further suggested that the OCC has sacrificed the needs of consumers in its attempts to satisfy the needs of its members, federally chartered banks…FHFB chairman John Korsmo has hired Korn/Ferry to fill the position of FHFB director of supervision…San Francisco-based BankServ reported that it captured nearly 80 percent of head-to-head competitions in the automated wire transfer business serving the nation’s banks and credit unions. BankServ also reported 50 percent growth from last year, attributing both their gain in marketshare and growth to the popularity of their new Global Funds Exchange Network…A study released by the National Community Reinvestment Coalition (NCRC) showed that credit unions are 3.6 times more likely to deny African-American mortgage applications than banks…The Consumer Federal of America and the National Consumer Law Center issued a report which likened tax refund loans to other predatory lending practices. The study claimed that the annual interest rate on tax refund advancement loans ranged anywhere from 67 percent to 774 percent…Arrowhead Credit Union is expected to acquire four tax and accounting firms this week in its bid to become the Inland Empire’s largest financial services provider…ACORN filed a class action suit against Household International for allegedly defrauding borrowers through predatory lending practices. The suit covers an estimated $2 billion in loans to tens of thousands of borrowers…Eight federal regulatory agencies released a brochure giving consumers information on how to protect their privacy. The agencies involved were the Federal Reserve Board, the Commodity Futures Trading Commission, The Federal Deposit Insurance Corp., the Federal Trade Commission, the National Credit Union Administration, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, and the Securities and Exchange Commission.

Employer liability for sexual harassment

A recent court case, Department of Health Services v. Superior Court of Sacramento, would make California employers absolutely liable for any acts of sexual harassment committed by a supervisor against a subordinate, even if the employer exercised care to prevent and correct such behavior and the employee unreasonably failed to take advantage of such measures.

CBA joined in a “friend of the court” letter to the California Supreme Court urging that this case be reviewed. CBA argued that this case would leave even the most vigilant employers absolutely liable for the tortious acts of supervisors, and thus remove incentives to institute preventative and corrective policies. We also argued that while California employers would be held to absolute liability, non-California based companies operating in this state would be subject to more reasonable federal laws in the federal courts. If the Supreme Court declines to review the case, CBA asked that the decision be depublished so it would have no precedential effect.

CBA Endorsed Vendors and Affiliate Members List

Some of you may have noticed some errors in the list of CBA’s Endorsed Vendors and Affiliate Members circulated in the last issue of Current Events. We apologize for the errors and will distribute a fully updated and accurate list in the next issue of Current Events.