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Bank Systems & Technology: The Blog

« August 2005 | Main | October 2005 »

The U.S. Department of the Treasury and the Federal Reserve Banks, as part of the Go Direct campaign, will begin a national television advertising campaign on Oct. 4 to motivate Social Security and Supplemental Security Income (SSI) recipients to switch to direct deposit. The ads will air for three to four days a week around the beginning of each month - the time when many people get their federal benefit checks in the mail. The ads will be on a variety of cable networks including CNN, Fox News, Lifetime, Game Show and several others.
http://godirect.org/

Instead of spending taxpayer dollars on an ad campaign, why not simply pay people to switch? Or if that's unfair to people who already accept direct deposit, start assessing a fee for receiving a paper check.

"Now I know Texas like I know Gandhinagar"
- Madhavi Patel, call center employee

Thanks, pardners!

Do you have a lot of loose change lying around the house?
Don't want to spend time putting it into those pesky coin sleeves?
No "Coinstar" machine at your local grocery store?

Then this service is for you. Just pack up your coins and mail them to Fayetteville, Arkansas, where they'll count the coins for you and send you a check within 7 to 10 days!

You can then use the money to buy comic books, so that you can assess the relative riskiness of underwriting life insurance policies for various superheroes.

Asked to assess the life insurance needs of five fictional characters, Americans believe superheroes Batman and Spiderman have much greater needs than cartoon parents Fred Flintstone and Marge Simpson.

Only 18 percent answered "none of the above/don't know," a category combining those who realize that fictional characters do not need life insurance with those who simply can't decide whether Batman or Marge Simpson face greater risks.

I would guess that "crimefighting" would fall outside of the policy coverage anyway, and it would be really hard for Bruce Wayne's estate to collect.

Click the link to read the release for yourself...

After Hurricane Katrina, a Bank Turns to Money Laundering
http://www.nytimes.com/2005/09/29/business/29hancock.html

"It will take up to at least half a year to reconsolidate."

—John Hairston, chief operating officer, Hancock Bank (Gulfport, Miss., $4.7 billion in assets)

The thieves spent three months tunneling under a busy city avenue in Fortaleza, about 1,500 miles northeast of Sao Paulo, to break into the Central Bank vault and steal the equivalent of $70 million in Brazilian currency, the real.

George Clooney, call your agent. There's another heist picture in the works.

Yesterday's webcast on the implications of the release of data under the Home Mortgage Disclosure Act ("HMDA") was quite a success.

Although the intent of HMDA was to provide transparency on lending practices, perhaps its most significant effect will stem from the ability for mortgage lenders to use this as a new source of competitive data on 8,853 financial institutions. The data includes information on loan pricing and the type of loan (e.g. loans for manufactured housing, loans secured by first or subordinate liens, unsecured loans). If you're considering an acquisition, HMDA may prove to be an interesting source of due diligence data.

It seems that the only place where the data won't really have a definitive impact is in assessing whether a lender discriminates. In its Sept. 27 Financial Services Alert, Goodwin Proctor LLP writes:

The FFIEC emphasized in its press release that the HMDA data are not, by themselves, a basis for definitive conclusions regarding whther a lender discriminates unlawfully against particular borrowers or takes unfair advantage of them.

...

As a result, the FFIEC cautioned that conclusions from the HMDA data alone run the risk of being unsound, which in turn may reduce the data's effectiveness in promoting HMDA's objectives.

Write to me at ischneider@cmp.com if you have any additional perspectives on this topic.

Oh yes, and do watch the webcast:
Behind the Data: What Every Bank Should Know About HMDA.

The chairman of Swedish bank Svenska Handelsbanken AB will step down from his post next year to go sailing around the world, the bank said Tuesday.

Searching for acquisitions, perhaps?

Party's over, folks.

WASHINGTON, Sept. 28 - Credit card loan delinquencies reached a record high of 4.81 percent of accounts in the second quarter of this year, according to the American Bankers Association's Consumer Credit Delinquency Bulletin.

In calculating these results, ABA incorporated revised information on the first quarter delinquency rates. As a result, the credit card loan delinquency ratio for the first quarter was revised upward to 4.76 percent of accounts from the previously reported 4.03 percent.

"The last two quarters have not been pretty," said James Chessen, ABA's chief economist. "Gas prices are taking huge chunks out of wallets, leaving some individuals with little left to meet their financial obligations," he said. "With gas prices still rising, the third quarter is not likely to be any better."

I just flew back from Europe, and boy, are my arms tired - from shlepping my luggage from place to place. It was a three-week, seven-country tour of Europe where I freely mixed business and pleasure. (If you like your work, it's always a pleasure.)

Those whose lives were irrevocably ripped apart by Hurricane Katrina face numerous pressing issues, including but not limited to finding water, food and shelter, locating one's family members, and coping with the shock and grief stemming from the immense scale of death and displacement. There's also the matter of determining whether the loss of property is total or partial, and making the decision on whether to uproot from the Gulf Coast or plan for rebuilding.

The horrifying devastation wrought by Hurricane Katrina on the Gulf Coast calls for a unified and rapid response. From humanitarian assistance to financial forebearance, the need is great and the solutions are difficult. What's certain is that the lives, homes and businesses of the people across an entire region of the country will certainly need the support of the financial industry.

Several questions come to mind: How has the disaster affected you and your institution? How can banks help people to rebuild their lives from scratch? How will the region's banks shoulder the financial burden of what looks to be substantial amounts of uninsured losses and bankruptcies? What are the operational implications for banks, mortgage companies and credit card companies during the crisis and its aftermath?

Please share your thoughts with us.

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