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Current Events - 05/06/2002

Industry Brief

• Thrifts that rely on income from residential mortgages are at greater risk when interest rates finally increase, according to a bulletin from the FDIC.
  
  
• According to Bankrate.com's Spring 2002 Checking Account Pricing Study, American consumers will pay more than $2.2 billion in ATM surcharges this year. In this same survey, Bankrate.com, one of the leading personal finance advice Web sites, encouraged consumers to look at Internet banks for greater return on their investments.
  
  
• Ron A. Berberian, chairman and owner of the Bank of Agriculture and Commerce, was appointed by President George W. Bush to the President's Advisory Committee on the Arts (PACA), an advisory board to the John F. Kennedy Center for the Performing Arts.
  
  
• Fair Isaac, a leading provider of credit scoring systems, has announced its merger with HNC Software, which provides fraud detection software specifically for the credit card and insurance industries. The merged company will operate under the Fair Isaac name and is expected to generate nearly $700 million in revenue in coming fiscal year.

401(k) bill set for Governor Davis, will bring tax increase for corporations

Two identical bills, AB 1122 (Corbett) and SB 657 (Scott) were passed by the California State Legislature in late April and will likely be signed into law by Governor Davis. The bills would allow people to contribute more to tax-deferred retirement accounts, which would conform to new federal law. The bills would also force corporations to pay higher taxes, by conforming to federal tax law that eliminating deductions for club dues, lobbying and the salaries of some highly paid executives.

Legislative Update - Assembly Banking & Finance Committee

Of the 10 bills heard by the Assembly Banking and Finance Committee on April 29, CBA was involved in six of them. Following is a brief update of each piece of legislation and what happened to it during the April 29 hearing:

• AB 2126 (Robert Pacheco) - Amending existing law, this proposed legislation sponsored by CBA would adjust the time frame in which financial institutions must give initial notice to trust fund beneficiaries when the trust fund is in a bank-affiliated mutual fund. In addition, this measure would permit the initial notice to be given by a fund prospectus or other written description of the fees and charges of the investment. These proposed changes would provide greater flexibility in the timing of the notice to be given and promotes accurate disclosure of fees and rates to be charged. The bill was given bi-partisan support and passed out of the Assembly Banking & Finance Committee.
  
  
• AB 1893 (Papan) - Supported by CBA, this legislation seeks parity for state-chartered banks by allowing them to extend the limits for loans secured with segregated deposits, much as federally-chartered banks currently do. This measure would create greater competition between state-chartered and federally-chartered banks. This bill was given bi-partisan support and passed out of the Assembly Banking & Finance Committee.
  
  
• AB 2868 (Wright) - A clean-up of Assembly Member Rod Wright's ID theft bill, this legislation was given bi-partisan support and was passed out of the Assembly Banking & Finance Committee.
  
  
• AB 2355 (Campbell) - Deals with the ability to enforce credit obligations on limited liability partnerships (LLP) and limited liability corporations (LLC), ensuring that the free flow of credit to these organizations is maintained. Supported by CBA, this bill also received bi-partisan support and was passed out of the Assembly Banking & Finance Committee.
  
  
• AB 2498 (Jackson) - Would disallow the use of inquiries to help to determine a credit score. CBA opposed this bill, which was passed out of the Assembly Banking & Finance Committee by an 8-4 vote.
  
  
• AB 1876 (Lowenthal) - Would have prohibited credit card issuers from providing convenience checks to their customers, unless specifically requested. CBA opposed this legislation, which failed passage out of the Assembly Banking & Finance Committee.

If you have any questions about these pieces of legislation or any of CBA's other legislative activities in Sacramento, please contact Maurine Padden, vice president, Government Relations at 916/441-7377 ext. 212.

CBA's Endorsed Products & Services

Following is a list of CBA's endorsed products and services, with a brief description of each. If you have any questions about these products, services or programs, or would like to pursue an opportunity with them, please contact John Neely, vice president of Products & Services at jneely@bankerben.com or 800/208-0222 ext. 5017.

Bankers Systems Inc. is a leading national provider of compliance resource solutions for financial institutions and their legal counsel. Their deposit, lending, and retirement plan documents, disclosures, software, training, and support services are used by more than 12,000 financial institutions, including 83 percent of banks in the U.S. CBA endorses Bankers Systems' Rembrandt® Lending System, which is designed to handle loan documentation for complex transactions and also the TSoft SBA FormMaster+, which automates SBA loan documentation.

Centrax Group: Centrax Group's MARQUIS MCIF is a marketing central information file (MCIF) that helps banks implement meaningful and measurable strategic marketing programs and CRM solutions. Available in both Windows and browser-based technology, MARQUIS has features like customer and product profitability, a sales platform, automated campaign management, mapping and graphing, and predictive product modeling,.

Clark/Bardes Consulting: Clark Bardes, formerly Bank Compensation Strategies, is the banking industry's recognized leader in providing innovative executive and director benefit planning to help banks attract, retain and reward key management talent while enhancing shareholder value. Endorsed by 45 banking trade organizations, Clark/Bardes professionals have provided more than 1,200 banking organizations with comprehensive programs that restore shortfalls in existing retirement programs, create management incentives, upgrade director benefits and finance postretirement benefit obligations.

Deluxe Financial Services Inc.: Deluxe was founded in 1915 to provide high-quality documents to financial institutions. Deluxe's 85-year history of focusing on the U.S. payment system, it has become the world's largest check printer and provider of The Most Popular Checks in the World â.

JL Group: JL Group helps banks across the nation better manage their records management practices through arcMethods, its Web-based records maintenance system. This system has helped hundreds of banks nationwide to develop fully-cited records retention schedules, customizable to banks' needs and which fully comply with all regulations. This product specifically helps banks ensure that records are kept for an appropriate amount of time, but no longer - a common and costly mistake.

Kesler and Associates: Kesler & Associates provides state-of-the-art insurance tracking systems for collateralized loans. They have a program that has the means of retrieving all billings, reports and other pertinent information, and that also has the capability of posting all transactions via the Internet. Kesler & Associates will track vehicle loans and leases, real estate loans, equipment and UCC loans, and commercial property loans. Kesler & Associates also offers a loan default program; mortgage, life and disability insurance; flood tracking; mechanical breakdown insurance, and guaranteed auto protection (GAP).

Message Secure Corporation: Message Secure Corporation (MSC) is a leading national provider of network security products and services. MSC delivers 24/7 monitored Internet portal security, active intrusion detection, secure e-mail delivery with virus scanning and secure remote access via VPN. All portal traffic is detail-logged and management reports can be generated on-demand. All MSC services are in compliance with current FDIC and OTS guidelines for information security in financial institutions. Message Secure closely monitors all regulatory communications to maintain service compliance.

S1 Community & Regional e-Finance Solutions Group: S1 Community is a leading provider of e-Finance solutions and information technology services for the financial industry. Founded by bankers and developed by technology experts, S1 offers a complete suite of proven, easy-to-use products that help financial institutions expand their online presence and revenue generating opportunities. Amongst the first to market with Internet banking, cash management and financial portal solutions, S1 continues to be an innovator, developing new products and services to meet the changing regulatory and technology needs of financial institutions. Additionally, S1 offers financial institutions the flexibility of secure, state-of-the-art, in-house or data center hosting.