Fleet, Paul Arpin kick off turkey round-up
WEST WARWICK – Fleet Bank and Paul Arpin Van Lines have issued $15,000 challenge grants – the equivalent of 1,500 turkeys apiece — to kick off the Rhode Island Community Food Bank’s Thanksgiving drive. The food bank needs 16,000 donated turkeys to distribute to needy families this Thanksgiving, an increase of 5,000 over last year.
Together, Fleet and Paul Arpin will match up to $30,000 in donations, and are challenging other individual and corporate donors to do their part.
Rhode Island's Market Has Changed. Developers, Builders, Investors and Sellers Must Change With It.
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The food bank distributes turkeys to the needy through a voucher system. Every $10 donation will enable the organization to purchase a voucher for one turkey. The vouchers are then distributed to families through food pantries, shelters, and soup kitchens.
Checks can be made out to the Rhode Island Community Food Bank and should indicate that the money is for turkeys. For more information, call 826.3073.
Credit bills down, but sometimes late
WASHINGTON, D.C. – Slightly more consumers are late in paying credit card bills than during the same period last year, but the dollar amount of unpaid card debt is down, according to the American Bankers Association’s “Consumer Credit Delinquency Bulletin.”
Based on the total number of credit card accounts, 3.5 percent of cardholders were late with their card payments in the first quarter of 1999, compared to 3.4 percent in the fourth quarter of 1998. A payment is considered delinquent when it is 30 days or more overdue. First quarter credit card delinquencies, based on the ration of total dollars outstanding, dropped to 4.4 percent from 4.6 percent in the fourth quarter of 1998.
“Almost 97 percent of credit card accounts are paid on time,” said Keith Leggett, a senior economist with the ABA.
But Leggett cautioned that even in a robust economy, “consumers should decide how much credit they can afford based on their own financial situation.”
The ABA offers the following warning signs of being overextended on credit: paying only the minimum payment month after month; being out of cash constantly; being late on important payments, such as rent or mortgage; taking longer and longer to pay off balances; and borrowing from one lender to pay another.
New capital requirements for sub-prime lenders
WASHINGTON, D.C. — The Federal Deposit Insurance Corporation (FDIC) is recommending higher capital requirements for insured banks and savings associations engaged in sub-prime lending, Chairman Donna Tanoue told America’s Community Bankers recently in Orlando, FL.
“I believe thrifts and banks with high concentrations of sub-prime loans should be required to hold more capital than the current rules now dictate. A lot more,” Chairman Tanoue said. “At the FDIC, our thoughts are that the amount in the highest risk cases should be several times greater than the current requirement.”
The FDIC proposes that capital requirements vary from institution to institution. Sub-prime lending attracts higher yielding, lower credit quality borrowers, which can cause high levels of risk to the deposit insurance funds.
“To the extent the insurance funds indirectly backstop categorically greater asset risks, the risks are transferred to the FDIC and the costs of problems will be borne by those who ultimately pay for operating the deposit insurance system. That means you,” Tanoue told the banking executives.
The FDIC does not define sub-prime loans as all loans underwritten using non-conventional credit standards. Loans with a community development purpose are not considered sub-prime loans. Affordable housing loans, for example, often are underwritten using non-conventional underwriting standards, but are done in a safe and sound manner. Sub-prime loans, in contrast, are sometimes predatory and are often made without regard to the underlying risk.
Earnings nearly a record for second quarter
WASHINGTON, D.C. — Commercial bank earnings fell just short of a new record in the second quarter of 1999, according to preliminary data from the FDIC.
Industry profitability remained strong, especially in banks’ domestic operations. Commercial banks earned $17.0 billion during the three months from April through June. Bank earnings were $1.0 billion lower than the record quarterly total of $18.0 billion in the first quarter, but were still the second-highest quarterly earnings ever reported by the industry.
“It may have not been the very best quarter ever, but as a bank regulator and insurer – who has to address problems and pay for bank failures – the FDIC welcomed it as the second best,” said Donna Tanoue, chairperson of the FDIC.
Compared to the second quarter of 1998, industry earnings were up by $854 million (5.3 percent). For the first six months of 1999, commercial bank earnings totaled $34.9 billion, a $2.9 billion (9.1 percent) improvement over the same period in 1998.
Second-quarter results for the 8,675 commercial banks and 1,652 savings institutions that are insured by the FDIC are contained in the agency’s latest Quarterly Banking Profile, which is based on quarterly reports of condition and income filed by FDIC-insured institutions.
The latest profile analyzes trends in bank and thrift performance during the second quarter and for the first half of 1999.
