CBA Publications >> Members' Only Publications >> Current Events

Current Events - 07/31/2000

When Is A Repeal Not a Repeal? — Our ATM access-fee litigation continues to unfold. As we expected, the cities have filed their appeal of our victory in the Federal District Court. No surprise there. The matter has not been assigned to a panel yet and we have no briefing schedule, but the process has begun. And what about compliance with Judge Walker’s order which declared Prop F in San Francisco and the Santa Monica ordinance to be unconstitutional?  Again, there has not been a problem in San Francisco where access fees have continued since we won a preliminary injunction in November. Prop F will never see the light of day. Santa Monica was required to take additional action, however, under the judge’s order. On Tuesday evening this past week, the City of Santa Monica passed a resolution which purports to suspend the private enforcement provisions of their ordinance. So we’re done, right?  Sorry, but wrong. We have looked hard for authority that when a city is directed by court order to suspend part of an ordinance they can do so by passing a resolution. We can’t find any authority to say so. We have found legal commentary which says that a city cannot repeal an ordinance with a resolution. The repeal must have the same legal force as the original enactment. Simply put, a resolution does not have the same formality and legal weight as an ordinance. As resolution is not law, an ordinance is. We are currently considering our options (legal and otherwise) to respond to this situation. While the risk that a court would actually allow private enforcement of the Santa Monica ordinance may be small in light of the city’s actions and its expressed desire to suspend private enforcement, the dollar amounts at stake are not small and the legal authority to allow private enforcement may still exist. For example, one bank may collect $1.50 for an access-fee, but if private enforcement is allowed the penalty could be $250.00 for that same transaction. You can do the math to see what level of certainty we require on this matter. I am sure I will have more news next week...

Banker Benefits Responds To Your Needs — When we speak to bankers about what unmet insurance needs they have, one coverage comes up again and again — Long Term Care. Well the folks at Banker Benefits have heard you and they have acted. They have signed an agreement with UNUM to provide CBA member banks with Long Term Care benefits at competitive rates. This coverage is truly the benefit of the future, expected to become the most sought-after benefit of the next decade. As our population ages, more and more people are stepping into the role of care-giver for a parent, older relative, or a friend. UNUM has told us that if bankers show enthusiasm for this product they will work with us to develop a product you could sell to your own customers. We look forward to your participation. Please see the flyer attached to this week’s Monday Courier and call Banker Benefits at 1-800-208-0222 for more information.

Congratulations to Valencia Bank & Trust — John Reardon, Valencia’s CEO, has been awarded the 2000 Entrepreneur of the Year Award for the greater LA area. The award was given for outstanding leadership on the financial services area. The sponsors included Ernst & Young, LLP, USA Today, CNN, and NASDAQ making this an award with some real prestige. An Ernst & Young executive noted that in an environment where banks are getting larger and wanting people out of their lobbies, Valencia Bank has looked in the opposite direction. Their model is one of strong one-on-one personal service and their niche has been high net worth individuals and small to medium sized businesses. I spoke with John about the award and he was frankly surprised to receive it given all of the “dot coms” and media companies who had been nominated. He also said something very interesting. He referred to himself as just the middle man. Crediting both his Board of Directors and his employees for creating the vision and making it a reality, he described the CEO’s role as that of a catalyst. Although the award was presented personally to John, he would only accept it on behalf of everyone at the bank. Congratulations again, John, and to everyone associated with your bank. And as a final aside, John reports that while he and the Mayor of LA share the same last name, he only uses the Mayor’s spelling when he needs a dinner reservation or theater tickets!

News From Around Sacramento-Town — Greg Wilhelm reports from Sacramento that the Legislature is enjoying a month-long summer recess. That ends on August 7th when they return for the final sprint toward adjournment at the end of the month. As you know, anything can (and frequently does) happen in the final weeks of a session. This means that Greg, Maurine, and Jamie will definitely be on their toes. That involves some late nights, too... A number of important issues still hang in the balance, but let me quote some news from Greg focusing solely on the privacy area to end this week’s offering:
 

“Probably the biggest surprise this legislative session is the fact that almost all of the dozens of anti-business privacy bills introduced this year either have been killed or become fatally stalled in the legislative process. Given the relentless, negative media coverage and elevated public interest in the issue, the fact that many legislators have been persuaded to wait for real world experience under the privacy provisions of Gramm-Leach-Bliley has been very gratifying. The Assembly Banking and Finance Committee Chairman, Lou Papan (D-Millbrae), has been particularly vocal in cautioning  the Legislature not to move prematurely in this area. All of the onerous “opt-in” financial privacy bills (AB 1707 (Kuehl); SB 1337 (Speier); SB 1372 (Leslie); SB 1409 (Murray)) failed to survive the policy committee process — most not even emerging from the first committee. (An “opt-in” personal information sharing bill aimed just at Internet service providers (AB 1007 (Wayne)) was never even taken up in its first policy committee.)  And where action was warranted to prohibit the sharing of health, medical or genetic information between insurance underwriters or sellers and credit grantors, legislation strongly backed by the financial services industry (AB 2797 (Papan)) has been sailing through the process to remove this red herring issue from the debate.”