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Current Events - 07/17/2000

The A-Team Is Still In Action — As I reported last week in a special fax and e-mail distribution, CBA won a resounding victory in federal court before Judge Vaughn Walker in our ATM access fee lawsuit.  He granted the industry a permanent injunction against the attempts by San Francisco and Santa Monica to prohibit banks from charging access fees to non-account holders for the privilege and convenience of using their ATMs.  In San Francisco this is very straight forward.  The city is forever prohibited from giving any effect to Prop F.  Banks have been charging access fees in San Francisco since we won a preliminary injunction in November of 1999 and that status quo will continue indefinitely.  Yes, we know the city will appeal the judge's ruling.  The same no-brainer situation does not apply in Santa Monica...yet.  Santa Monica claims that the judge's order is unclear and they do not know what is required of them.  Here is a test.  Let's see how you do on understanding what the judge had to say: "Defendant City of Santa Monica, California, as well as the other Santa Monica defendants are hereby permanently ENJOINED from enforcing or taking any other action under the Santa Monica Ordinance relating to charges for the use of ATMs and are directed to suspend the Santa Monica Ordinance."  It seems clear to me, but the city says it doesn't know what suspend means.  Let's try this.  The court's intent is to prevent and prohibit the city, its employees and third parties from filing lawsuits in state or federal court to enforce the ordinance.  Suspend the ordinance means you withdraw it, take it off the books, repeal it.  Got it?  If it later turns out the ordinance was Constitutional after all, you can re-enact it.  Duh!  I guess we will have to get the judge to "clarify" what he meant.  I might be tempted to use a sledge hammer.  We'll see what tools he deems appropriate.  The hearing should take place next week.  In a related development, we understand the judge has now signed and filed his final judgment in the case.  This means the clock for appeal by the cities has begun to run.  The press on this story has been nationwide in scope and the reactions are interesting.  Many industry and legal observers are looking at our litigation as the death knell on ATM price fixing and fee prohibition legislation at the local level.  We are not there yet in terms of a final judgment, but this case is certainly a pivotal one for our industry across the country.  The fight goes on!

An Ounce of Prevention — Bank security officers met recently to discuss preparations for the Democratic National Convention in Los Angeles.  Financial institutions near the Staples Center, where the event will be held, should be prepared for traffic tie-ups, demonstrations, and possibly vandalism.  The participants in the coordinating group, some of whom have weathered the World Trade Organization protests in Seattle, suggest avoiding major meetings and having employees work at home where possible.  Contingency planning should include additional security at affected locations, prior arrangement of cash deliveries and pickups, removal of outside trash cans, communications alternatives, and testing of disaster recovery procedures.  Sound familiar?  If you would like more information, please call Leland Chan at 415/284-6999 ext.  214, and he can recommend a contact.

Old Dogs Are Not Dead — In the latest move to signal the continuing strong worth of an established branch network and a high net worth clientele, UBS of Switzerland bought itself both of these items when it announced the acquisition of PaineWebber Group in a pricey $10.8 billion cash and stock transaction.  Once again we have been shown that a traditional institution (which had been undervalued by analysts and the market during the Internet euphoria) has the basic value to command a premium price in a serious transaction.  Predictions of the demise of stockbrokerage houses ran rampant during the time period when investors flocked to Internet stocks.  Let me say it again, it is the combination of traditional branch networks and a strong customer base with technological savvy that will carry the day in the financial services sector.  Pure Internet solutions do not appear to be the formula for instant or guaranteed success that some have thought.  Kiss your branch network goodnight as you leave work tonight, it is a very valuable tool...

Service to Your Door — In our on-going effort to provide our members with banker-specific training, CBA has created two new professional development approaches.  First, we offer on-site in-bank training for groups as small as 5 and as large as 50.  The topics range from supervisor training to commercial loan educational courses.  In addition, the home page on CBA's website (www.calbankers.com) is your ticket to on-line self study classes.  Refer to the flyers included with this Monday Courier packet on both of our new programs and then phone the CBA Professional Development Unit for more information at 619/482-8283.  Our own Mike Jones will probably answer the phone himself.  When he does, say hi and thank you.  He heard what you wanted and found a way to make it happen.  Training delivered right to your door.  Customer and member service does not get any better than this.  Congratulations, Mike!

Sacramento Scene — So what's going on in our State Capitol?  Well, the legislature is in recess until August 7. Take a nice deep breath.  I know that's what Greg, Jamie, and Maurine are doing.  But don't worry about the legislators...they'll be back!
 
 

Chris Chenoweth
CBA COO & General Counsel
On behalf of the entire staff
07/17/00