Got a problem with the practices at Bank One or Citibank? You may not get much help by taking your troubles to Illinois banking regulators or the state attorney general.
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New rules approved by the U.S. Office of the Comptroller of the Currency this week limit the authority state agencies have over nationally chartered banks. Instead, those banks will answer to the OCC.
Court decisions have already made clear that it is the OCC that ultimately has authority over nationally chartered banks, but many states were angry to find federal regulators had dismissed the notion that states could have any oversight over how banks within their borders operate.
Most troubling for some state regulators is that the new rules apply to payday lending operations, mortgage offices and any other subsidiaries a nationally chartered bank owns.
“We believe that our office and our consumer fraud division is going to know more about predatory lending abuses on the South Side of Chicago or payday loan scams in Springfield than an agency in Washington, D.C.,” said Melissa Merz, a spokeswoman for Illinois Atty. Gen. Lisa Madigan.
Merz said the new rules would prohibit Madigan’s office from entering into the sort of agreements it did last year when Illinois and 36 other states looked at the practices of two national banks that were supplying customer credit card information to buyers clubs that offer discounts.
Lorenzo Padron, state commissioner of banks and real estate, said he was disappointed by the decision.
“I believe that the states are in the best position to enforce consumer protection laws,” Padron said. “I further believe that the interests of Illinois consumers are best served by having consistent standards that apply to all Illinois institutions.”
The National Conference of State Legislatures is among the groups slamming the OCC’s decision. Federal regulators are assuming all oversight for nationally chartered banks, but not adding the staff necessary to do the job correctly, said Cheye Calvo, director of financial services.
“From a consumer perspective, your state banking departments, your state attorney general, your state legislature can’t help you if you bank at a national bank,” he said.
But many industry groups, including the Consumer Bankers Association and the American Bankers Association, said the OCC’s decision would benefit consumers.
The decision “protects consumers and prevents state laws from impeding the credit-granting process,” Edward L. Yingling, ABA executive vice president, said in a statement.
The system of having state and nationally chartered banks began during the Civil War. In general, the larger banks have national charters, while community banks tend to choose state charters.
Talking ATMs coming: National City Corp. will replace all of its nearly 1,600 automated teller machines with versions that talk, the bank announced this week.
Customers won’t have to worry about their ATM loudly blurting out account balances to anyone within earshot, though. The new ATMs have an audio jack where a standard set of earphones is plugged in. Customers will have to have earphones on to hear what the machine is saying.
In addition to telling a customer what’s on the screen, the machine can offer guidance on what buttons to push for different transactions.
The technology is already available on some ATMs in the Chicago market, including select machines at other banks. But National City is the first to announce plans to make the ATMs standard. All of the Chicago-area ATMs will be switched over by the end of the year, a spokeswoman said.
Fifth Third adds branches: Local banks spent much of last year adding branches as they expanded their local presence. The trend shows no sign of slowing this year, with dozens of branches scheduled to open in the coming months.
Fifth Third Bank will be among the first to open doors on new offices in 2004. On Monday, the bank will add five locations: a new Loop bank and offices in Evanston, Libertyville, Mt. Prospect and South Elgin. The new branches give Fifth Third 129 locations in the Chicago area.