June 2008 June 2008

June 1, 2008

On May 2, 2008, ING Groep NV of Amsterdam, the Netherlands, announced that it had agreed to acquire CitiStreet LLC of North Quincy, MA for €578 million (US $900 million). CitiStreet, jointly owned by State Street Corp. of Boston, MA, and Citigroup Inc. of New York, NY, provides global benefit services. The transaction is expected to close in the third quarter of 2008. (SNL Bank , Thrift Weekly, Northeastern Edition, 5/05/08)

Navigant Credit Union of Central Falls, RI, completed its acquisition of Journal Employees Federal Credit Union of Providence, RI, on April 19, 2008. (Internal sources, 5/02/08)

Wells Fargo , Company of San Francisco, CA, announced on May 1, 2008, that it acquired Flatiron Credit Company, Inc. of Denver, CO, and all its operating subsidiaries. Flatiron had been a subsidiary of TD Banknorth, NA of Toronto, Canada, and is one of the nation's largest insurance premium finance companies. Terms of the deal were not disclosed. (SNL Bank , Thrift Daily, 4/02/08)

First National Lincoln Corporation of Damariscotta, ME, changed its title to The First Bancorp, Inc. on May 2, 2008. The change ties the company to its operating subsidiary, The First, NA, which changed its name from the First National Bank of Damariscotta in 2005. (Internal sources, 05/03/08)

Sugar River Savings Bank of Newport, NH, changed its corporate title to Sugar River Bank on August 13, 2007. (Internal sources, 5/23/08)

Century Bank, a unit of Century Bancorp Inc. of Medford, MA, opened a branch a 1 Salem Street in Medford, MA, on May 5, 2008. The bank now has over 22 branches in Greater Boston. (SNL Bank , Thrift Daily, 5/08/08)

RBS Citizens, NA of Providence, RI, opened a branch at 415 Colley Street in Springfield, MA, on May 8, 2008. On May 16, 2008, the bank opened a branch at 474 Station Avenue in South Yarmouth, MA. (Internal sources, 5/23/08)

United Bank of West Springfield, MA, opened a branch at 806 Suffield Street in Agawam, MA, on April 21, 2008. United Bank also announced plans to open a full service branch in Chicopee, MA, later this year, which will expand its retail network to 16 full-service branches and two stand-alone drive-up facilities. (United Financial Bancorp, Inc. press release, 5/16/08)

On May 28, 2008, RBS Citizens, NA of Providence, RI, closed a branch at 522 Main Street in Winchester, MA. (Internal sources, 5/23/08)

New Federal Reserve System Members

On May 15, 2008, Chelsea-Provident Cooperative Bank of Chelsea, MA, became a member of the Federal Reserve System. Also known as Chelsea Bank, the institution is a mutual community bank founded in 1885 that serves Chelsea and its surrounding communities. (Internal sources, 5/16/08)

Bank of Fall River, a cooperative bank in Fall River, MA, became a member of the Federal Reserve System on May 22, 2008. Bank of Fall River is an independent, locally managed community bank originally chartered in 1888, with four full-service offices in Fall River, North Dighton, Taunton, and Fairhaven, MA. (Internal sources, 5/23/08)

Formation of a Nondeposit Trust Company

Pyramis Global Advisors Trust Company was formed as a nondeposit trust company in Merrimack, NH, on May 1, 2008. Pyramis Global Advisors, with offices also in Boston, MA, serves as institutional asset manager for Fidelity Investments of Boston, MA. (Internal sources, 5/02/08)

Stock Repurchase Programs

On May 13, 2008, New England Bancshares, Inc. of Enfield, CT, announced that it had begun a stock repurchase program to acquire 5 percent of the company's outstanding stock. New England Bancshares is the holding company for Enfield Federal Savings and Loan Association of Enfield, CT, and Valley Bank of Bristol, CT. (SNL Bank , Thrift Daily, 5/13/08; New England Bancshares press release, 5/12/08)

Completed Capital Raising

On May 20, 2008, Sovereign Bancorp, Inc., of Reading, PA, announced that it had completed its previously announced equity and debt offerings, which raised approximately $1.9 billion for Sovereign. The action was taken as a "proactive" measure to position the company to "handle any further deterioration in the economy," according to Joseph P. Campanelli, Sovereign's President and CEO. With the additional capital, Sovereign's capital ratios exceed "well-capitalized" levels as defined by the regulatory agencies for commercial banks and thrifts. Sovereign intends to use the net proceeds for general corporate and banking purposes. (Sovereign Bancorp press release, 5/20/08)

Federal Reserve April 2008 Survey Indicates Tighter Bank Lending Standards

The Federal Reserve issued the results of its "April 2008 Senior Loan Officer Opinion Survey on Bank Lending Practices" on May 5, 2008. The survey indicated that more banks are tightening lending standards on home mortgages, other types of consumer loans, and business loans in comparison with the January 2008 survey results. The percentage of banks reporting tighter lending standards was near historic highs for nearly all loan categories.

In addition, the survey indicated that demand for bank loans from both businesses and households had weakened since January 2008, but at a lesser rate than found in the previous survey period. The survey of 56 domestic banks also showed that despite concerns about the economy, bankers remain confident in their own financial positions. Detailed survey results are available at www.federalreserve.gov/boarddocs/SnLoanSurvey/200805/. offsite (Federal Reserve Board Survey, 05/05/08; Boston Globe, 05/05/08; American Banker, 5/06/08)

Federal Reserve Board, Federal Trade Commission (FTC) Propose Rules on Risk-Based Pricing Notices

On May 8, 2008, the Federal Reserve and the FTC announced proposed regulations that would require a creditor to provide a consumer with a risk-based pricing notice when, based in whole or in part on the consumer's credit report, the creditor offers or provides credit to the consumer on terms less favorable than those provided to other consumers.

The proposed rules apply, with certain exceptions, to all creditors that engage in risk-based pricing. Under the proposal, a risk-based pricing notice would generally be provided to the consumer after the terms of credit have been set, but before the consumer becomes contractually obligated to the transaction.

The proposal would implement section 311 of the Fair and Accurate Credit Transactions Act of 2003, which amends the Fair Credit Reporting Act. Comments must be received on or before August 18, 2008. To view the detailed proposal or to submit a comment, please visit www.federalreserve.gov/newsevents/press/bcreg/20080508a.htm. offsite (Joint press release, 05/08/08)

FDIC Issues Guidance on Provisions for Independent Testing for BSA/AML Compliance

The FDIC issued a Financial Institution Letter on May 16, 2008, emphasizing the importance of an effective independent review, an original component of the Bank Secrecy Act/Anti-Money Laundering Compliance Program, which "cannot be overstated." The letter provided details on why independent testing (or audit) is critical. In addition, it references resources available to institutions for strengthening their audit procedures. The full letter, including references such as the "Independent Testing text from the 2007 FFIEC BSA/AML Examination Manual," is online at www.fdic.gov/news/news/financial/2008/fil08038.html. offsite (FDIC FIL-38-2008, 5/16/08)

Federal Financial Regulators Issue Final Illustrations of Consumer Information for Hybrid Adjustable-Rate Mortgage (ARM) Products

On May 22, 2008, the federal financial regulatory agencies issued final illustrations to help customers understand certain ARM products. The agencies' "Statement on Subprime Mortgage Lending" (Subprime Statement), which took effect on July 10, 2007, recommended that institutions provide clear, balanced and timely information to consumers about the relative benefits and risks of hybrid ARM products. The newly issued illustrations are intended to help institutions provide this information to customers.

The illustrations consist of (1) an explanation of some key features of products covered by the Subprime Statement; and (2) three loan charts with examples of the potential payment shock accompanying these types of loans. Institutions are not required to use the illustrations — they may use them or may provide consumers with information described in the guidance in an alternate format.

In the near future, the agencies will post the illustrations on their web sites for downloading and printing. The agencies' May 22 press release, including the document "Illustrations of Consumer Information for Hybrid Adjustable Rate Mortgage Products," is available online at www.federalreserve.gov/newsevents/press/bcreg/20080522a.htm. offsite (Interagency press release, 5/22/08)

FinCen Issues May 2008 "Trends, Tips and Issues"

FinCen has issued its May 2008 edition of "The SAR Activity Review - Trends, Tips , Issues." pdf offsite The document is a result of close collaboration among the nation's financial institutions, law enforcement officials, and regulatory agencies to provide meaningful information about the preparation, use, and value of Suspicious Activity Reports (SARs) filed by financial institutions.

The latest edition discusses several topics relevant to the community of SAR filers and SAR users, including examples of how law enforcement uses BSA data. Also highlighted are FinCEN analytical reports on the insurance industry, mortgage loan fraud, and money laundering in the residential real estate industry. The document is available at www.fincen.gov offsite by selecting "SAR Activity Review." offsite (FinCen update, 5/14/08)

Federal Reserve Banks Announce that Windsor Locks, CT Check Operations Will Transfer to Philadelphia, PA on September 19, 2008

In March 2008, the Federal Reserve Banks announced plans to continue a series of operational changes designed to enhance the efficiency, quality, and cost-effectiveness of our nationwide payments services. These changes are necessary as consumers and businesses continue the shift from paper checks to electronic payments and as financial institutions rapidly adopt electronic check processing.

In May 2008, we announced that effective September 19, 2008, First District paper check processing will move from Windsor Locks, CT, to the Federal Reserve Bank of Philadelphia. Additional information will be distributed as plans evolve. In the meantime, financial institutions with questions or concerns are encouraged to call their Account Executives at (800) 447-7205.

In addition, the Boston Reserve Bank has scheduled two town-hall style meetings to help customers prepare for the changes. At the meetings, scheduled for August 7 in Boston, MA, and August 13 in Enfield, CT, we will share the latest information, discuss the transition with you, and answer all of your questions in person. (Internal sources)

Items in Bank Notes focused on developments affecting banking structure in New England. They were condensed from daily newspapers and press releases from federal and state financial regulatory agencies. Their reproduction does not imply our endorsement of the accuracy, opinions or policies reflected in the subject matter.Items in Bank Notes focused on developments affecting banking structure in New England. They were condensed from daily newspapers and press releases from federal and state financial regulatory agencies. Their reproduction does not imply our endorsement of the accuracy, opinions or policies reflected in the subject matter.