Executive briefing

Bankruptcy Reform Stalls

Bankruptcy reform stalled in the Senate on Nov. 19 as Congress adjourned and will likely take up the matter again in February. The legislation would make it more difficult for individuals to wipe out their debts. The House passed its version of the bill in May. Under the "needs-based" system, debtors considering bankruptcy would be subject to a test to determine how much relief they need and they would be required to repay what they can. Those judged to be able to repay some of what they owe could be disqualified from Chapter 7 bankruptcy and made to file under Chapter 13.

ATM Debate Continues

The nationwide controversy over ATM surcharges continues. Rep. Maxine Waters, D-Calif., introduced a bill to eliminate ATM surcharges. Earlier, Rep. Barnard Sanders, I-Vt., attempted to attach a surcharge ban to the financial reform bill. Meanwhile, the New York City Council is working on legislation to limit banks from charging people who are not customers for ATM withdrawals. The latest developments occurred despite a federal judge's decision on Nov. 15 to temporarily bar San Francisco and Santa Monica from enforcing an ATM surcharge ban.

E-Signature Bill Advances

The Senate on Nov. 19 passed a bill to set standards for electronic signatures and protect online consumers. The Millennium Digital Commerce bill would validate contracts that rely on e-signatures instead of written signatures and would set a nationwide standard to make Internet sales or e-commerce legally binding. The bill is intended as an interim measure until states pass their own electronic commerce laws. On Nov. 9, the House passed its version of the bill. The White House supports the Senate bill, but not the House bill. Critics are concerned that the House version would pre-empt state laws. The two bills will be heard in conference committee early next year.

Consumers Y2K Confident

Ninety percent of all bank customers nationwide think their banks are ready for the year 2000, according to a new Gallup survey sponsored by federal bank regulators. This compares to a 76 percent confidence rating in March. About 70 percent of customers said they received information from their banks, compared with 23 percent in the March survey. Those customers who say they are very concerned about the Y2K issue number only about 5 percent, down from 11 percent in March. Today, 39 percent say they will probably take out extra cash, a significant decline from 62 percent in March. Most customers who plan to withdraw extra cash say they will take out less than $500.

Owners Want Branch Contact

Although small business owners expect web-based banking to grow, they still want the opportunity to meet with loan officers and other bankers at the local branch. This is the conclusion of a survey of 3,000 business owners nationwide conducted by Barlow Research. In the next 18 months, business owners predict account officer importance will decline 13 percent and branch importance will drop 21 percent, but the importance of PC banking will increase significantly - 16 percent. "Small businesses seem to be embracing online banking, partly because they like it, and partly because other channels are becoming less available, " said John Barlow, president of the Minneapolis-based research firm. "Don't close your branches yet," however, he said. "Branches may be the banking industry's best competitive advantage over virtual banks."