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Bankers worldwide are working to ensure their systems are ready for Year 2000. Equally important are the banking community's efforts to address year 2000 credit risk. In this article, a Bank of America senior vice president shares the bank's Year 2000 credit risk assessment worksheet. In February, an in-house attorney at Bank of America looks at Year 2000 loan documentation protections. (Reprinted by permission of the publisher.), Bankers worldwide are working to ensure their systems are ready for Year 2000. Equally important are the banking community's efforts to address Year 2000 credit risk. In this article, a [...]

The US District Court for the Southern District of Florida ruled in two cases that banks are immune from liability for disclosing electronic fund transfer records to the federal government under the Annunzio-Wylie Anti-Money Laundering Act. In Coronado v. BankAtlantic Bancorp, Inc. and Lopez v. First Union National Bank, the court noted the broad legislative intent of the act's safe harbor provision to encourage banks to help authorities to stop money laundering. The court dismissed Lopez for failing to state a claim under the act., The author discusses two recent federal cases from the Southern District of Florida that illustrate the difficulties banks face in complying with federal anti-money laundering legislation.

Bank companies should make their mailing lists as attractive as possible to encourage recipients of direct mail to open and read the letter. This means that special attention should be given to the customers' names and addresses because misspelling them can de-motivate customers from entertaining these mailings. Duplication, where customers receive three copies of the same letter, can also be a turn-off. A good list sends a signal to the customers that their bank is paying attention to little things, such as punctuating their names properly and sending them a single letter., But were afraid to ask! You can have great creatives; you can produce an eight-color, foil-and-blind-embossed piece; but if it is sent to Mr. Main Street, does it really matter? [...]

As a result of new federal recordkeeping regulations, banks and nonbank financial institutions are required, for the first time, to maintain records related to domestic and internationl funds transfers. The authors describe the new regulatory requirements and the critical issues they raise for bank financial institutions.

A customer statement is one of the most powerful communication links between a bank and its customers. It is therefore paramount that a statement not only includes information but also conveys and supports the image, positioning and values of a bank. Customer statements should help customers understand, identify with the bank and finally develop a relationship with it. If the customer statement of a bank does not perform these goals, it is high time for a redesign. The process should involve the input of customers as well as representatives from the various departments of the bank. All information and data included in the current statement should be assessed. Also, a list of system requirements and problems that always act as sources of inaccuracies should be listed and dealt with. Color, typography, graphics, paper size, orientation and weight should also be considered. Before finally launching a new statement, customers should decide if it is better than the original., SINGLE STATEMENTS FOR A CUSTOMER'S MULTIPLE ACCOUNTS CAN CREATE A COMPETITIVE ADVANTAGE. In the past, creating a competitive advantage in the banking industry depended largely upon the products and services [...]

Readers of the Journal can become overwhelmed by the pitfalls some of the articles describe. Whether environmental issues, lender liability, government regulation, or the general decline in business ethics, the risks facing lenders appear to be growing exponentially. In this article, the author takes on one area--loan documentation--that clearly has grown not only in complexity but also in actual volume. He discusses why loan agreements have become so difficult to understand and suggests methods to reduce their density as well as their cost., Readers of the Journal can become overwhelmed by the pitfalls some of the articles describe. Whether environmental issues, lender liability, government regulation, or the general decline in business ethics, the risks facing lenders appear to be growing exponentially. In this article, the author takes on one area - loan documentation - that clearly has grown not only in complexity but also in actual volume. He discusses why loan agreements have become so difficult to understand and suggests methods to reduce their density as well as their cost. (Reprinted by permission of the publisher.), In an attempt to regain control of their increasingly risky environment, bankers repeatedly have looked toward more stringent loan documentation. With each problem loan or adverse court ruling, attorneys are [...]

Banks should have comprehensive record retention, storage and destruction policies for a number of reasons. To stay within the law, banks must meet standards set by quite different laws based on diverse purposes. Once these standards are met, other legal issues must be addressed such as provision for evidence in the event of foreseeable litigation. Lending institutions must be able to secure their records from accidental destruction. Specialized storage and back-up systems come into use here. Finally, a comprehensive policy will save resources by assuring that documents are not stored needlessly.

The borrowers highlighted in this article, Mike and Mindy Mousse, may be similar to borrowers who come to your bank. If that's the case, lending to these individuals can be easier - and a lot less risky - if you have a clear understanding of their personal financial statements. The purpose of this article is to demonstrate how personal financial statements and schedules can organize and document the information that a banker needs to appraise a borrower's creditworthiness. The first part of the article reviews the philosophical framework on which personal financial statement analysis is based, using RMA's two-page Personal Financial Statement. The second part is practical application of the analytical approach. (Reprinted by permission of the publisher.)

Bank lenders write credit analysis reports, loan review reports, and call reports - not to mention a great number of letters and memos. The success of their efforts and, to a great extent, the image that they convey to customers and supervisors depend on how the lenders write. Good writing makes a big difference. The author of the following article is a bank lender and has prepared the following article loaded with tips for good writing. His guidelines should be helpful for loan officers, credit analysts, and anyone who wants to write better. (Reprinted by permission of the publisher.)

The readability of consumer-oriented bank brochures was investigated. Readability was defined in terms of comprehension, fluency, and interest. Edward Fry's Fry Readability Graph was used to evaluate consumers' reading grade level of 30 bank brochures from five major banks and 26 major daily newspapers. The results indicated that 62% of American adults would not be able to comprehend the bank brochures, and 67% would not be able to comprehend the newspapers. The results imply that bank managers have a responsibility to provide information to consumers at an appropriate level of readability.

Kenneth Littlefield took charge as chief regulator of state-chartered banks at the end of 1986. When he assumed control, the Texas banking industry was in turmoil. At the time, financial [...]

Private parties dealing with failed banks or thrifts dealing with the Resolution Trust Corp (RTC) or the Federal Deposit Insurance Corp (FDIC) in courtshould be able to produce proper bank-transaction documentation during litigation to stand a chance against the very powerful federal agencies. The RTC and the FDIC can wipe out the claims and defenses of customers of federally liquidated failed banks and thrifts through federal law standards for the required bank documentation. There are two sources of such federal law standards and these are often used together. The first, commonly known as the D'Oench Doctrine, is an old Supreme Court case wherein a secret agreement betweem a customer and bank officials was nullified by the FDIC when the agency represented the failed bank. The second is 12 USC 1823(e), a statute specifying conditions for an agreement's validity against the FDIC.

Back to Gap Report Basics With all of the sophisticated high tech developments in asset/liability management, one sometimes forgets the basics. The reality is that the basic gap report remains [...]

PNC Financial Services Group Inc. said it would donate a number of historical documents from Riggs Financial Corp. to George Washington University's Gelman Library. The $94.9 billion-asset Pittsburgh company got [...]

A part-time employee of Independence Federal Savings Bank in Washington and a public relations firm Independence had retained were behind a letter from a supposedly independent group criticizing a dissident [...]

Citizens Financial Group Inc. of Providence, R.I., is opposing a Federal Deposit Insurance Corp. plan that would deny it credit for $13 billion of deposits that it bought in 2001. [...]