R. Kinney Williams - Yennik, Inc.
R. Kinney Williams
Yennik, Inc.

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Bank Regulatory News
August
1998

August 31, 1998 - YEAR 2000 FIDUCIARY SERVICES GUIDANCE - Interagency Guidance on Fiduciary Services and Year 2000 Readiness
The Federal Financial Institutions Examination Council (FFIEC) has issued the attached
statement to alert financial institutions to the potential risks associated with fiduciary services and
the Year 2000 date change. The interagency statement identifies areas of potential risk and
recommended actions to manage those risks.

August 28, 1998 - Final Rule Governing Filing Procedures and Delegations of Authority, and
Revised Related Policy Statements (Part 303 of the FDIC’s Rules and Regulations)
The FDIC Board of Directors has revised the agency’s regulation and related policy statements
that govern the filing and processing of applications submitted by insured depository institutions.
The revised Part 303 of the FDIC’s rules and regulations and revised policy statements, which
are attached, will take effect October 1, 1998.

August 31, 1998 - FDIC MAKES PUBLIC JULY 1998 ENFORCEMENT ACTIONS NO
ADMINISTRATIVE HEARINGS SCHEDULED FOR SEPTEMBER

The Federal Deposit Insurance Corporation (FDIC) today released a list of orders of
administrative enforcement actions taken against banks and individuals in July. No administrative
hearings are scheduled for September.

August 28, 1998 - YEAR 2000 QUESTIONS AND ANSWERS - Interagency Guidance on Common Questions About FFIEC Year 2000 Policy
The Federal Financial Institutions Examination Council (FFIEC) has issued the attached
statement to supplement previously issued interagency statements on Year 2000 readiness. The
guidance addresses frequently asked questions about material in those statements.

August 28, 1998 - FILING PROCEDURES - Final Rule Governing Filing Procedures and Delegations of Authority, and Revised Related Policy Statements
(Part 303 of the FDIC’s Rules and Regulations) The FDIC Board of Directors has revised the agency’s regulation and related policy statements that govern the filing and processing of applications submitted by insured depository institutions.  The revised Part 303 of the FDIC’s rules and regulations and revised policy statements, which are attached, will take effect October 1, 1998.

August 26, 1998   -OCC Issues Guidance for Sound Management of PC Banking Risks
WASHINGTON, D.C. -- The Office of the Comptroller of the Currency issued a bulletin today providing guidance to banks on ways to control risk arising from the use of personal computers in retail banking. The OCC estimates that nearly a quarter of the nation's 2,600 national banks engage in some form of PC banking.

August 26, 1998 - The Federal Reserve Board along with the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision are amending their respective risk-based capital standards for banks, bank holding companies and thrifts regarding the capital treatment of unrealized holding gains on certain equity securities.

August 25, 1998 - FDIC ANNOUNCES STRONG MID-YEAR EARNINGS IN
BANK AND THRIFT INSURANCE FUNDS

The Bank Insurance Fund (BIF) earned $637 million in the first half of 1998, according to an
FDIC report on the Corporation's unaudited financial statements. The Savings Association
Insurance Fund (SAIF) earned $242 million for the same period.

August 24, 1998 - New OCC Handbook Will Help Bankers Achieve Effective Internal Controls
WASHINGTON, D.C. -- The Office of the Comptroller of the Currency has issued a new manual to help examiners evaluate the internal control systems national banks use to guard against fraud and financial mismanagement, as well as to ensure compliance with laws, regulations and the institution's own policies.

August 24, 1998 - JULY FDIC SURVEY FINDS CONTINUED FAVORABLE REAL ESTATE MARKET CONDITIONS
The latest results from the FDIC's quarterly Survey of Real Estate Trends indicated that positive
views of local residential and commercial markets remained high in recent months.

August 21, 1998 - JOINT ACCOUNTS AND "PAYABLE-ON-DEATH" ACCOUNTS - Proposed Amendments to Deposit Insurance Regulations
The FDIC Board of Directors is requesting comments on the attached proposal to amend the
regulations governing the insurance coverage of joint accounts and "payable-on-death" ("POD"
or revocable trust) accounts. Comments are due by October 15, 1998. Summaries of the two
proposed amendments follow.

August 20, 1998 - OCC Warns Banks About "Pretext Calling" by Information Brokers
WASHINGTON, D.C. -- The Office of the Comptroller of the Currency today warned national banks to take precautions against a growing threat to the confidentiality of customer account information.  In an advisory letter to the banks, the agency described how confidential information may be gathered illicitly from banks and other businesses by persons pretending to be a particular
customer -- the practice of "pretext calling."

August 17, 1998 - ELECTRONIC COMMERCE AND CONSUMER PRIVACY - Online Privacy of Consumer Personal Information
Consumers have become increasingly concerned about the privacy of their personal information.
With the rapid growth of electronic commerce, and the increased collection of diverse pieces of
consumer personal information over the Internet, the potential for this information to be used in
ways unwanted by consumers is a growing risk to financial institutions. In the attached "Online
Privacy of Consumer Personal Information," the FDIC addresses online privacy to raise
awareness about this issue among financial institutions.

August 17, 1998 - MANAGEMENT OFFICIAL INTERLOCKS - Proposed Amendments to Management Official Interlocks Rule
The Federal Deposit Insurance Corporation's (FDIC) Board of Directors has proposed revising
the FDIC's rule on management official interlocks. Comments on the proposal, which is
attached, are due by October 13, 1998.

August 17, 1998 - The Federal Reserve Board today announced its approval of the proposal of NationsBank Corporation, Charlotte, North Carolina, to merge with BankAmerica Corporation, San Francisco, California, and thereby acquire all of BankAmerica's bank, nonbank, and foreign subsidiaries.

August 14, 1998 - REGULATORY RELIEF - Agricultural Loans in Areas Affected by the Drought in Texas and Oklahoma
The Federal Deposit Insurance Corporation (FDIC) is encouraging banks to work
constructively with agricultural borrowers affected by the severe drought in Texas and
Oklahoma.

August 14, 1998 - NATIONAL REGISTRY OF REAL ESTATE APPRAISERS - FFIEC's New Internet-Based Listing of Real Estate Appraisers
The Federal Financial Institutions Examination Council's (FFIEC) Appraisal Subcommittee has
announced a new Internet-based service that provides an up-to-date listing of state-certified or
licensed real estate appraisers eligible to perform real estate appraisals for federally related
transactions.

August 12, 1998 - The Federal Reserve Board announced today its approval of the application of Norwest Corporation, Minneapolis, Minnesota, to acquire Star Bancshares, Inc., and thereby acquire First State Bank, both of Austin, Texas.

August 11, 1998 - CAPITAL STANDARDS - Final Rule Revising the Regulatory Capital Treatment of Servicing Assets
The FDIC Board of Directors has approved the attached final rule relaxing the regulatory capital
limitations on servicing assets and aligning the terminology used in the FDIC’s capital standards
more closely with the terminology used under generally accepted accounting principles. The rule,
which reduces banks’ regulatory burden, is being issued jointly with the rules of the Federal
Reserve Board, the Office of the Comptroller of the Currency, and the Office of Thrift
Supervision.

August 13, 1998 - HOST STATE LOAN-TO-DEPOSIT RATIOS
The Federal Reserve Board, along with the Office of the Comptroller of the Currency and the
Federal Deposit Insurance Corporation, today issued the host state loan-to-deposit ratios that
the banking agencies will use to determine compliance with section 109 of the Riegle-Neal
Interstate Banking and Branching Efficiency Act of 1994 (Interstate Act).

August 7, 1998 - FDIC APPROVES ASSUMPTION OF INSURED DEPOSITS OF
Q BANK, FORT BENTON, MONTANA

The Federal Deposit Insurance Corporation (FDIC) has approved the assumption of the insured
deposits of Q Bank, Fort Benton, Montana, by Heritage State Bank, Fort Benton, a newly
chartered banking subsidiary of United Financial Corp., Great Falls, Montana.

August 7, 1998 - Banker Who Originated 24 Fictitious Loans Ordered by OCC to Pay $838,670
WASHINGTON, D.C. -- The Office of the Comptroller of the Currency (OCC) today announced that it has ordered Richard Salmon, former vice president and loan administrator of Bank of the Desert, N.A. in Indio, Calif., to pay $813,670 in restitution and a $25,000 civil money penalty for making 24 fictitious loans for his own benefit.

August 3, 1998 - Risk Management Planning Seminar for 1998
The Federal Financial Institutions Examination Council (FFIEC) announces the location
and date for its 1998 Risk Management Planning seminar.

August 3, 1998 - MORTGAGE LOAN SERVICER ENTERS PLEA AGREEMENT FOR
DEFRAUDING RESOLUTION TRUST CORPORATION OF $3.5 MILLION

FDIC Inspector General Gaston L. Gianni, Jr., announced today that Ryland Mortgage
Company (Ryland) has entered an agreement with the U.S. Government to plead guilty for
defrauding the former Resolution Trust Corporation (RTC) of $3.5 million. The plea agreement
has been filed in the U.S. District Court in Jacksonville, FL.

FRB Dallas Listing of Bank and Bank Holding Company Application Bulletins

Federal Reserve Board Public Information Actions, Orders, and Other Documents, all FRB districts

FRB Operating Circulars, maintained by the FRB of Chicago

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