Bank Consolidation: California Style

[rioux at oro.net]

I though that folks on this list might find the following of interest:

The October 27, 1995 issue of the Federal Reserve Bank of San Francisco's
_Weekly Letter_ concluded that future reductions in the number of bank
branches nationwide may be greater than previously predicted.

This conclusion is based on California's recent experience with bank
consolidations. Between the end of 1990 and 1994, the number of
commercial banks in California dropped 23% -- from 516 to 399. In
addition, the number of bank branches in the state dropped 20% from a peak
of 5,555 in 1991 to 4,441 in just two years.

For comparison, the number of banks in the US dropped 29% over the past
decade. From 1984 to 1992, however, the number of bank branches
nationwide increased by approximately 9,000 to 65,577.

The report included a graph that showed that the number of banks in
California first increased from about 300 in 1980 before dropping
precipitousely in the 1990s, but did not address this fact.

Copies of the short report (#95-36) are available from:

Public Information Department
Federal Reserve Bank of San Francisco
P. O. Box 7702
San Francisco, CA 94120
phone (415) 974-2246
FAX (415) 974-3341
BBS (415) 896-0272


Jerry Rioux
HCD Services


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[DRizzo2327 at aol.com]

The reduction in "service" by larger banks and bank holdking companies is
clearly the direction. They have made this very clear in their actions.
However, that is not necessarily a problem for the majority of "normal"
banking customers and businesses. They will simply continue to work with
their branch or "electronic" teller as before. Less convenience and more
fees and charges seem to be acceptable to the the general public.

However, the development of small, locally conscious credit resources seems
to be imperative. In that regard there is the Credit Union (and the
discussion is ensuing on that in COMMUNITYDEVELOPMENTBANKING-L@cornell.edu).
However, the ability of CU's to provide commercial and community development
financing is in doubt under current regulations (laws or regulations -?). It
will be necessary for ESBDC List readers [Maiser@IST01.FERRIS.EDU] to assist
in developing support for changes and recommendations for new rules which
will allow these entities to take over the smaller segments being abandoned
by the larger banking firms. members of the two liksts should begin
participating.

Any research on this? Can we upload it when possible and establish a
repository? Can we get AOL to provide a discussion forum?

Dennis Rizzo
NJ Disability Loan Fund, Inc.
DRizzo2327@aol.com


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[tmartin at CapAccess.org]

On Sun, 5 Nov 1995 DRizzo2327@AOL.COM wrote:

> Date: Sun, 5 Nov 1995 08:50:45 -0500
> From: DRizzo2327@AOL.COM
> To: COMMUNITYDEVELOPMENTBANKING-L@cornell.edu
> Cc: Maiser@ist01.ferris.edu
> Subject: Re: Bank Consolidation: California Style
>
> The reduction in "service" by larger banks and bank holdking companies is
> clearly the direction. They have made this very clear in their actions.
> However, that is not necessarily a problem for the majority of "normal"
> banking customers and businesses. They will simply continue to work with
> their branch or "electronic" teller as before. Less convenience and more
> fees and charges seem to be acceptable to the the general public.
>
> However, the development of small, locally conscious credit resources seems
> to be imperative. In that regard there is the Credit Union (and the
> discussion is ensuing on that in COMMUNITYDEVELOPMENTBANKING-L@cornell.edu).
> However, the ability of CU's to provide commercial and community development
> financing is in doubt under current regulations (laws or regulations -?). It
> will be necessary for ESBDC List readers [Maiser@IST01.FERRIS.EDU] to assist
> in developing support for changes and recommendations for new rules which
> will allow these entities to take over the smaller segments being abandoned
> by the larger banking firms. members of the two liksts should begin
> participating.
>
> Any research on this? Can we upload it when possible and establish a
> repository? Can we get AOL to provide a discussion forum?
>
> Dennis Rizzo
> NJ Disability Loan Fund, Inc.
> DRizzo2327@aol.com
>

Dennis,

I use the Internet. Let's not get some resource locked up on AOL,
PRODIGY, COMPUSERVE, etc, which have no access for Internet users.

Tom


-----------------------------------------------------------------------
Thomas John Martin, T.O.P. tmartin@capaccess.org
125 Mount Harmony Road West 301/855-6796
Owings, Maryland 20736-8904 USA


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[DRizzo2327 at aol.com]

Suggestions and ideas are welcome. I am not an experienced Internet user so
am not the person to arrange this.


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[afisher at igc.apc.org]

Speaking of bank consolidation, California style: does First Bank of
MN have a good reputation? What do you know of them?

They are acquiring/merging with FirstInterstateBankcorp which owns
California's third largest bank, First Interstate. Wells, as you
know, made a hostile takeover bid but appears to have been
pre-empted.

Any info would be helpful.

Alan Fisher
California Reinvestment Committee


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[NIELM at aol.com]

Question about First Bank of MN...

We worked with them for our $100 Million line of credit at CUNA Mortage for
many years. They worked out a way to share the line with US Central. Did an
excellent job for us. They have an excellent Trust department. Very
professional operation. I don't have names or phone numbers, but if you need
more info, I can get them or call Carl Kopplin at CUNA Mortgage 800-333-2862
for info. He can access the files.

Niel Moser


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[CoCapInit at aol.com]

FBS has an excellent reputation in MN. They have a very poor reputation in
states in which they have recently purchased market share. Their real
response to local market and community issues has been especially poor in low
income communities.

This is largely because of their top down consolidated structure, limited
loan authority of local "branch managers', and heavy reliance on credit
scoring.

Would like other views on this....


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