R. Kinney Williams - Yennik, Inc.®
R. Kinney Williams
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Bank Regulatory News
June 1999

June 30, 1999 - FDIC MAKES PUBLIC MAY 1999 ENFORCEMENT ACTIONS; NO
ADMINISTRATIVE HEARINGS SCHEDULED FOR JULY

The Federal Deposit Insurance Corporation (FDIC) today released a list of orders of
administrative enforcement actions taken against banks and individuals in May. No administrative
hearings are scheduled for July.

June 29, 1999 - BRANCH CLOSINGS - Interagency Policy Statement on Branch Closings
The FDIC Board of Directors has amended its policy statement on branch closings. The changes
incorporate amendments to the Federal Deposit Insurance Act mandated by the Riegle-Neal
Interstate Banking and Branching Efficiency Act of 1994 and the Economic Growth and
Regulatory Paperwork Reduction Act of 1996. The new policy statement is effective June 29,
1999.

June 28, 1999 - BASEL COMMITTEE ON BANKING SUPERVISION CAPITAL ACCORD
Basel Committee on Banking Supervision Seeks Comment on Proposed Revisions to the 1988 Capital Accord
On June 3, 1999, the Basel Committee on Banking Supervision (Basel Committee) issued a
consultative paper proposing revisions to the 1988 Capital Accord and requesting industry
comment. The comment period closes March 31, 2000.

June 28, 1999 - Auto Club Insurance & Auto Club Services Granted Thrift Charter
WASHINGTON, D.C., June 28, 1999 – A trio of interrelated Michigan organizations that serve approximately 2.2 million members of the AAA automobile organization in Michigan and Wisconsin received approval to organize a federal savings bank, Auto Club Trust, which will be based in Dearborn, Mich.

June 25, 1999 - OCC Chief Counsel Julie L. Williams Underscores Importance Of Accurate Disclosure and Fair Treatment for Customers of Bank-Affiliated Brokers
WASHINGTON, D.C. -- Julie L. Williams, Chief Counsel for the Office of the Comptroller of the Currency, told Congress today that bank and securities regulators share a common concern that bank customers understand the risks of securities investments and are made aware that these products are not FDIC-insured or guaranteed by the bank.

June 25, 1999 - The Federal Reserve Board today announced the execution of a Written Agreement by and between Banco Popular del Ecuador, S.A., Quito, Ecuador, Banco Popular del
Ecuador's Miami agency, the Federal Reserve Bank of Atlanta and the State of Florida Department of Banking and Finance.

June 24, 1999 - New Expedited Processing Procedure for Certain Applications Filed
Under the Bank Merger Act

The Federal Deposit Insurance Corporation (FDIC) has implemented a new processing
procedure for certain applications filed under the Bank Merger Act (Section 18(c) of the
Federal Deposit Insurance Act) that are also otherwise eligible for expedited processing. An
institution need not specifically request the new processing procedure in its application filing. This
action is in keeping with the FDIC's ongoing efforts to minimize regulatory burden and streamline
its application processes.

June 24, 1999 - Bank Trading Revenue Increases 77% To Record $3.6 Billion For 1st Quarter WASHINGTON -- During the first quarter 1999, bank trading revenue increased 77 percent to a record $3.6 billion, as compared to $2.0 billion for the fourth quarter 1998, the Office of the Comptroller of the Currency (OCC) reported today in its Bank Derivatives Report: First Quarter 1999. Recognizing that fourth quarter earnings are generally lower than other quarters, bank trading revenues still grew an impressive 33 percent from the $2.7 billion reported for the first quarter 1998. Mike Brosnan, OCC Deputy Comptroller for Risk Evaluation, attributed the healthy revenue stream to “the combined effects of continued strong customer activity along with the more favorable market conditions compared to those experienced last fall."

June 22, 1999 - OCC ANNOUNCES 24 NEW ENFORCEMENT ACTIONS WASHINGTON, DC --The Office of the Comptroller of the Currency (OCC) today announced 24 new enforcement actions taken against national banks. The actions released today include one formal agreement, one cease and desist order, 16 civil money penalties, three removals, one prompt corrective action directive, one personal cease and desist order for restitution, and one safety and soundness order.

June 22, 1999 - Community Development Corporations, Community Development Projects, and Other Public Welfare Investments Description
The attached proposal to amend Part 24, the regulation governing national bank investments designed primarily to promote the public welfare, was published in the Federal Register on June 10, 1999. Comments are due by August 9, 1999.

June 22, 1999 - OCC Chief Counsel Urges Industry to Act on Privacy Concerns WASHINGTON -- Chief Counsel Julie L. Williams today urged bankers to look at privacy rights from their customers' perspective.   "In developing and implementing privacy policies, think about how your customers would react if you gave them a full description of how much of their information you collect, what you do with it, whether you transfer it, who you transfer it to and what happens to it then," she said in a speech to the Financial Institutions Insurance Association.

June 22, 1999 - YEAR 2000 CONTINGENCY PLANNING - Interim Rule Requiring Banks and Thrifts With Less Than "Satisfactory" Y2K Ratings to Maintain Key Deposit and Loan Information
The FDIC Board of Directors has approved the attached interim final rule on Year 2000 (Y2K)
contingency planning. The rule requires FDIC-insured depository institutions rated less than
"satisfactory" for Year 2000 readiness by their primary federal regulator as of July 31, 1999, to
maintain key deposit and loan information using a standard format beginning December 24,
1999. The standardized backup programs required by the rule would reduce the time needed to
retrieve, translate and transfer information about accounts should a financial institution need the
help of another data processor or be placed in receivership. The FDIC would use the
information only if an institution experiences a Y2K-related problem.

June 21, 1999 - The Federal Reserve Board today announced the issuance of an Order of Assessment of a Civil Money Penalty against Banco Popular de Puerto Rico, San Juan, Puerto Rico, a state member bank.  Banco Popular, without admitting to any allegations, consented to the issuance of the Order in connection with its alleged violations of the Board's regulations implementing the National Flood Insurance Act.

June 18, 1999 - FDIC REPORTS RECORD EARNINGS FOR COMMERCIAL BANKS,
THIRD-BEST EVER FOR SAVINGS INSTITUTIONS IN THE FIRST QUARTER

FDIC-insured commercial banks earned a record $18.0 billion in the first quarter of 1999. The
quarter was marked by an absence of major merger-related restructuring expenses at large
banks, which had depressed industry earnings in recent periods. Large bank earnings also were
boosted by improvements in international operations and a record quarter for trading income.

June 18, 1999 - DEPOSIT INSURANCE COVERAGE - New Edition of "Your Insured Deposit" Booklet
The Federal Deposit Insurance Corporation (FDIC) is pleased to announce its new edition of
"Your Insured Deposit." The booklet was revised to reflect the April 1, 1999, amendments to
the deposit insurance regulations on joint accounts and "payable-on-death" (POD or trust)
accounts.

June 18, 1999 - FFEIC RISK MANAGEMENT PLANNING SEMINAR - FFIEC 1999 Risk Management Planning Seminar
The Federal Financial Institutions Examination Council (FFIEC) has announced that it will host
its 1999 Risk Management Planning Seminar on November 8 and 9 in Washington, D.C.

June 17, 1999 - OTS Looks Beyond Home Base to Assess CRA Performance of Non-Branch Thrifts
WASHINGTON, D.C., June 17, 1999 – Having repeatedly faced the question of how to evaluate the CRA performance of thrifts that deliver their products by non-branch systems on a national or regional basis, the Office of Thrift Supervision (OTS) has taken the approach of looking at their performance throughout the markets where they do credit business, not just in the main office assessment area.

June 17, 1999 - FOREIGN ASSETS CONTROL ACT - Specially Designated Nationals, Narcotics Traffickers and Blocked Persons
On May 26, 1999, the U.S. Department of the Treasury's Office of Foreign Assets Control
(OFAC) updated its listing of specially designated nationals and blocked persons to include new
entries for Sudan and Unita. Certain deletions and modifications to the existing list also were
made. On May 28, 1999, OFAC updated its listing of specially designated nationals and
blocked persons to include the names of the five individuals indicted as war criminals by the
United Nations International Criminal Tribunal for the former Yugoslavia. On June 8, 1999,
OFAC updated its listing of specially designated narcotics traffickers and also updated data for
entities previously listed.

June 17, 1999 - COMMUNITY REINVESTMENT ACT - Revised, New and Proposed Interagency Questions and Answers Regarding Community Reinvestment
In response to questions from the banking industry, the Federal Financial Institutions Examination
Council (FFIEC) published the attached "Interagency Questions and Answers Regarding
Community Reinvestment" (Q&As) on May 3, 1999, in the Federal Register.

June 17, 1999 - INTERAGENCY TASK FORCE PUBLISHES CONSUMER BROCHURE ABOUT SHOPPING AND NEGOTIATING FOR THE BEST MORTGAGE
The federal Interagency Task Force on Fair Lending has published a brochure for consumers, "Looking for the Best Mortgage: Shop, Compare, Negotiate." The brochure notes that shopping around for a home loan or mortgage is similar to shopping for a car -- consumers should obtain information on all costs of the loan and negotiate for the best deal.

June 16, 1999 - The Federal Reserve Board today announced that it is seeking nominations for seven appointments to its Consumer Advisory Council.

June 16, 1999 - OCC Expresses Concern About Any Actions That Put Downward Pressure on Bank Reserves
WASHINGTON -- The Office of the Comptroller of the Currency said today that it is concerned about any action that might have the effect, even if unintended, of applying general downward pressures on bank reserves.

June 16, 1999 - OCC RELEASES CRA EVALUATIONS FOR 58 NATIONAL BANKS WASHINGTON, DC -- The Office of the Comptroller of the Currency (OCC) today released a list of Community Reinvestment Act (CRA) performance evaluations that became public during the period of May 15 through June 14. The list contains only national banks and insured federal branches of foreign banks that have received ratings. The possible ratings are outstanding, satisfactory, needs to improve, and substantial noncompliance.

June 16, 1999 - BANK REPORTS - Reports of Condition and Income (Call Report) for Second Quarter 1999
The enclosed materials pertain to the Reports of Condition and Income (Call Report) for the
June 30, 1999, report date. Please complete your second quarter Call Report and submit the
report electronically as soon as possible. Your completed report must be received by July 30,
1999, in accordance with the filing requirements discussed below. Note that no extensions of
time for submitting reports are granted.

June 14, 1999 - OCC Rule Proposals Would Ease Burdens on Community Banks WASHINGTON -- Rule changes being proposed today by the Office of the Comptroller of the Currency (OCC) would codify a number of previously issued interpretations that ease burdens on community banks by providing flexibility for national banks to satisfy various corporate requirements under the National Bank Act.

June 10, 1999 - YEAR 2000 CUSTOMER AWARENESS - Gallup Survey Results
Attached is important Year 2000 customer awareness information from the FDIC, the Office of
the Comptroller of the Currency, the Federal Reserve Board, and the Office of Thrift
Supervision. Along with the interagency letter is a report from the Gallup Organization on its
recent survey on Y2K and the banking industry.

June 10, 1999 - Thrifts Urged To Post Privacy Policies As Part Of Transactional Web
Sites

WASHINGTON, D.C., June 10, 1999 – Any savings association supervised by the Office of
Thrift Supervision (OTS) that is planning to establish a transactional web site on the Internet should, among other actions, post privacy policies on its web site in a clear manner – customers expect it.

June 9, 1999 - The final rule on the disclosure of nonpublic OCC information was published in the Federal Register on June 1, 1999. The final rule was effective on publication.

June 9, 1999 - OCC Proposal Will Encourage Continuing Public Welfare Investments By National Banks
WASHINGTON, D.C. -- In a move to simplify its procedures and encourage public welfare investments by national banks, the Office of the Comptroller of the Currency (OCC) will publish in tomorrow's Federal Register a proposal to amend its regulations governing national bank investments designed primarily to promote the public welfare, 12 C.F.R. .24, or "Part 24."

June 8, 1999 - The Homeowners Protection Act of 1998 (Pub. L. No. 105-216, 112 Stat. 897) becomes effective July 29, 1999. The act requires that lenders or servicers provide certain disclosures and notifications concerning private mortgage insurance (PMI) on residential mortgage transactions consummated on or after July 29, 1999. The act also contains disclosure provisions for existing residential mortgages, i.e., those consummated before July 29, 1999. Finally, it provides for the cancellation and termination of PMI.

June 8, 1999 - COMPTROLLER HAWKE OUTLINES PROMISING APPROACHES TO INTERNATIONAL CAPITAL STANDARDS
WASHINGTON -- Comptroller of the Currency John D. Hawke, Jr. said today that a new approach is needed to the international capital framework and credited the recent consultative paper by the Basel Committee as a first step in the right direction. In a speech to attendees at the International Monetary Conference in Philadelphia, the Comptroller encouraged bankers to comment on the Committee's recently issued consultative paper.

June 7, 1999 - OCC Agreements with State Insurance Departments will Benefit Consumers
The Office of the Comptroller of the Currency (OCC) and state insurance regulators today expanded their efforts to share information concerning customer complaints that may arise in connection with sales of insurance by banks. The OCC and the insurance departments of eight states agreed to share information about consumer complaints relating to sales of insurance products in these eight states by national banking companies. The eight agreements between the OCC and the individual state insurance departments also call for the agencies to communicate with each other on matters of common interest, such as regulatory and policy initiatives.

June 7, 1999 - Comptroller Urges Industry to End Abusive Practices And Elevate Customer Service Standards
SAN FRANCISCO -- Comptroller of the Currency John D. Hawke, Jr. appealed today to the banking industry to improve customer service standards and warned that some current practices are abusive and may invite government scrutiny if not corrected.

June 7, 1999 - The Federal Reserve Board today announced the issuance of a Cease and Desist Order against Banco Atlántico, S.A., Barcelona, Spain, and its New York Agency.   The Order was issued jointly with the Acting Superintendent of Banks of the State of New York.

June 7, 1999 - FDIC MAKES PUBLIC APRIL 1999 ENFORCEMENT ACTIONS; NO
ADMINISTRATIVE HEARINGS SCHEDULED FOR JUNE

The Federal Deposit Insurance Corporation (FDIC) today released a list of orders of
administrative enforcement actions taken against banks and individuals in April. No
administrative hearings are scheduled for June.

June 4, 1999 - HOMEOWNERS PROTECTION ACT OF 1998 - Homeowners Protection Act of 1998 to Take Effect July 29, 1999
The attached Homeowners Protection Act of 1998, which takes effect July 29, 1999, requires
financial institutions to cancel private mortgage insurance (PMI) under certain circumstances. The
Act also requires financial institutions to provide borrowers with a number of disclosures at the
time of loan origination, yearly while mortgage insurance is in effect, and when the PMI
terminates.

June 4, 1999 - FDIC BOARD APPROVES AGENCY’S FIRST DIVERSITY STRATEGIC PLAN
The Board of Directors of the FDIC has approved the agency’s first Diversity Strategic Plan. "Our plan is comprehensive, fair and inclusive," said FDIC Chairman Donna Tanoue. "We want to set a national example by showing how we make the strengths of a diverse population and a diverse workforce work for the FDIC."

June 4, 1999 - OTS Releases May National CRA Ratings
WASHINGTON, D.C., June 4, 1999-- The Office of Thrift Supervision (OTS) today released
savings associations' Community Reinvestment Act (CRA) performance evaluation ratings that became available in May 1999.

June 3, 1999 - BANK SERVICE COMPANY ACT - Required Notification for Compliance with the Bank Service Company Act
The Federal Deposit Insurance Corporation (FDIC) would like to remind FDIC-supervised
institutions of the reporting requirements contained in Section 7 of the Bank Service Company
Act (12 U.S.C. 1867). The Act requires insured financial institutions to notify their appropriate
federal banking agency in writing of contracts or relationships with third parties that provide
certain services to the institution.

June 3, 1999 - CONSUMER HANDBOOK ON ADJUSTABLE RATE MORTGAGES
Federal Reserve Board Revises Consumer Handbook on Adjustable Rate Mortgages
The Board of Governors of the Federal Reserve System has issued a revised Consumer
Handbook on Adjustable Rate Mortgages (CHARM). Regulation Z, which implements the
Truth in Lending Act, requires that the handbook be provided to consumers when they apply for
an adjustable rate mortgage loan.

June 3, 1999 - FDIC PROPOSES NEW DATA RETENTION RULE
The Board of Directors of the Federal Deposit Insurance Corporation (FDIC) today proposed
requiring banks and thrift institutions with less-than-satisfactory Year 2000 ratings as of July 31,
1999, to maintain key deposit and loan information using a standard format at year end.

June 3, 1999 - FDIC REPORTS 1998 AND FIRST QUARTER 1999 EARNINGS FOR BANK AND THRIFT INSURANCE FUNDS
The Bank Insurance Fund (BIF) earned $1.3 billion in 1998 and $244 million in the first quarter
of 1999, according to an FDIC management report on the Corporation's unaudited financial
statements. The Savings Association Insurance Fund (SAIF) earned $468 million and $99
million for the same periods.

June 3, 1999 - FDIC ISSUES MAY LIST OF BANKS EXAMINED FOR CRA COMPLIANCE
The FDIC today issued its monthly list of state nonmember banks recently evaluated for
compliance with the Community Reinvestment Act (CRA). The list covers evaluation ratings that
became available in May 1999.

June 3, 1999 - Advance Notice of Proposed Rulemaking
The attached advance notice of proposed rulemaking (ANPR) regarding the OCC's review of regulations that affect community banks was published in the Federal Register on May 12, 1999. The comment period for the rule expires on July 12, 1999.

June 3, 1999 - OCC Highlights Basel Proposal for a Capital Framework
WASHINGTON--The Office of the Comptroller of the Currency (OCC) advised national banks today that the Basel Committee on Banking Supervision has issued a discussion draft of a new capital adequacy framework for internationally active banks that would replace the current Capital Accord, issued in 1988. The Basel Committee is made up of representatives of central banks and
supervisory authorities of the Group of Ten countries and Luxembourg.

June 2, 1999 - Nation’s Thrift Industry Earns $2.1 Billion In First Quarter 1999
WASHINGTON, D.C., June 2, 1999 – The nation’s thrift industry earned $2.1 billion in the
first quarter 1999, Director Ellen Seidman of the Office of thrift Supervision (OTS) reported
today. First quarter earnings were the third best of any quarter, up from $1.4 billion in the fourth quarter 1998 and $1.9 billion one year ago. The sharp increase in first quarter earnings over the fourth quarter was primarily due to lower overhead expense, which had spiked in the fourth quarter due to one-time restructuring charges. Non-interest expense – overhead – declined to 2.13 percent of average assets in the first quarter from 2.53 percent in the fourth quarter and 2.20 percent one year ago. Also contributing to first quarter profits were lower provisions for losses, reflecting a record low level of troubled assets.

June 2, 1999 - OTS Announces CRA Examination Schedule For 3rd Quarter 1999
WASHINGTON, D.C., June 2, 1999 -- The Office of Thrift Supervision (OTS) today announced the availability of a list of savings associations scheduled for Community Reinvestment Act (CRA) examinations during the third quarter of 1999.

June 1, 1999 - Major changes or additions to the FFIEC website for June 1999 - Added the June 1999 versions of the FFIEC Call Report Forms 031-034.

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