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financial services w/5 (act or law or bill) and date aft
1998 and date bef 11/7/99 (Edit Search)
USA TODAY, November 5, 1999, Friday, FINAL EDITION, NEWS;, Pg. 4A, 553 words, Bush fails
Boston reporter's surprise quiz in interview, Paul Leavitt; William M. Welch; Judy Keen ; With staff and
USA TODAY, November 5, 1999, Friday, FINAL EDITION, MONEY;, Pg. 12B, 1367 words, Congress
OKs bill deregulating financial services industry, Christine
USA TODAY, October 28, 1999, Thursday, FINAL EDITION, NEWS;, Pg. 18A, 492 words, Banking bill
protects consumers, Hjalma E. Johnson
USA TODAY, October 27, 1999, Wednesday, FINAL EDITION, MONEY;, Pg. 1B, 479 words, BOND
YIELD RISES, Compiled from staff and wire reports
USA TODAY, October 25, 1999, Monday, FINAL EDITION, MONEY;, Pg. 2B, 407 words, Bank reform
bill moves close to vote in Congress, Christine Dugas
USA TODAY, October 13, 1999, Wednesday, FINAL EDITION, MONEY;, Pg. 1B, 1191 words, Russia
rattles Swiss banks New laws lift shroud of secrecy amid money-laundering scrutiny, Tom Lowry,
USA TODAY, September 27, 1999, Monday, FINAL EDITION, LIFE;, Pg. 19A, 854 words, Y2K is
coming! Y2K is coming! Y2K<> uh, never mind, Paul G.
USA TODAY, August 27, 1999, Friday, FINAL EDITION, MONEY;, Pg. 3B, 1441 words, Arbitration
might be only choice, Christine Dugas
USA TODAY, July 26, 1999, Monday, FINAL EDITION, NEWS;, Pg. 14A, 505 words, With
patient-data leaks spreading, Congress fans the flames
USA TODAY, July 13, 1999, Tuesday, FINAL EDITION, MONEY;, Pg. 3B, 755 words, Insurance ads
change tune Campaigns broaden scope as companies branch
out, Greg Farrell, NEW YORK
USA TODAY, April 27, 1999, Tuesday, FINAL EDITION, MONEY;, Pg. 2B, 477 words, Focused
Chenault works hard for success, Sandra Block
THE FULL TEXT OF EACH ARTICLE:
1 of 11 DOCUMENTS
November 5, 1999, Friday, FINAL EDITION
LENGTH: 553 words
HEADLINE: Bush fails Boston reporter's surprise quiz in interview
BYLINE: Paul Leavitt; William M. Welch; Judy Keen ; With staff and wire reports
Republican presidential front-runner George W. Bush flunked a
surprise quiz in a Boston TV interview. Asked to name the leaders
of four trouble spots in the world, he got only Taiwanese President
Lee Teng-hui. He missed Gen. Pervaiz Musharraf of Pakistan, Indian
Prime Minister Atal Bihari Vajpayee and Aslan Maskhadov, leader
of the breakaway Russian region of Chechnya.
Bush spokeswoman Karen Hughes said, "For the American people,
the relevant question is not how many names a candidate has memorized,
but does he have the strategic vision to lead and can he protect
A spokesman for Vice President Gore, the Democratic presidential
candidate, said the exchange cast doubt on Bush's qualifications
for the White House. "This raises a serious question," Chris
Lehane said. "Does the American public want to take a chance
in 2001 with a president who needs on-the-job training?"
Hughes responded: "Far be it from me to question what a reporter
Also, Bush, criticized for skipping two "town-meeting" style
forums in New Hampshire, will face his rivals Dec. 13 in Iowa.
The debate, sponsored by WHO-TV in Des Moines, will be Bush's
first face-to-face meeting with his opponents in the state that
kicks off the nominating season with its caucuses Jan. 24. Bush
already has agreed to a debate Dec. 2 in Manchester, N.H., in
the state that holds the first primary Feb. 1.
Bush also has accepted invitations to two candidate forums in
January, one each in Iowa and New Hampshire. -- Judy Keen
GUN CONTROL: The big guns in the gun-control debate were
on Capitol Hill on Thursday as the issue resurfaced after multiple
shootings this week in Seattle and Honolulu. Vice President Gore
attacked GOP leaders for "frustrating the will of the American
people by refusing to take up" gun-control legislation.
Meanwhile, National Rifle Association President Charlton Heston
told a House hearing that the Clinton-Gore administration is "putting
gun-toting felons on the streets in record numbers" and not enforcing
existing gun laws.
"Why does the president ask for more federal gun laws if he's
not going to enforce the ones we have? This deadly charade is
killing people," Heston said.
HEALTH CARE: President Clinton urged House Speaker Dennis
Hastert, R-Ill., to appoint new conferees to work out differences
between House and Senate versions of legislation that would overhaul
Although the House approved a tough managed-care bill last month,
Hastert filled most of the GOP slots on the negotiating team with
opponents of the bill. --William M. Welch
BANK LAWS OVERHAULED: Congress on Thursday sent President
Clinton a sweeping bill for reshaping the financial landscape
by tearing down the Depression-era barriers between banks, insurance
companies and investment firms.
The vote in the Senate was 90-8. The House vote several hours
later was 362-57, with Republicans in solid support and Democrats
President Clinton said he was eager to sign the bill, which repeals
the landmark 1933 Glass-Steagall Act. The act erected barriers
separating the financial services industries -- a response to
the devastating stock market crash of October 1929 that triggered
the Great Depression.
GRAPHIC: PHOTO, B/W, William Philpott, Reuters; Heston: Federal gun laws are not being enforced, NRA president says at hearing.
LOAD-DATE: November 05, 1999
2 of 11 DOCUMENTS
November 5, 1999, Friday, FINAL EDITION
LENGTH: 1367 words
HEADLINE: Congress OKs bill deregulating financial services industry
BYLINE: Christine Dugas
After more than 20 years of trying, Congress passed a bill on
Thursday to eliminate vestiges of Depression-era laws that separate
banks, brokerages and insurance companies.
The bill passed 90-8 in the Senate. Late Thursday night it passed
the House 362-57 with Republicans in solid support and Democrats
split. President Clinton has said he intends to sign it.
Industry groups hailed the bill as a major victory for financial
companies and their customers. But consumer advocates say it will
result in higher prices and less privacy.
Financial services companies put lots of effort, and money, into
the bill. Between January and Oct. 1, banking, insurance and brokerage
firms spent more than $ 30 million on political contributions to
both parties, according to the Center for Responsive Politics.
That's up 36% over the same period in 1997, the last election
Financial modernization was not the only issue on the companies'
agenda, but it was certainly at the top. "The quest to deregulate
the financial services industry may rank alongside the push for
managed care as the top lobbied issue of 1999," the center said
in its report on banking deregulation.
But for all the time and money spent, the legislation is more
evolutionary than revolutionary. Banks, brokerages and insurance
companies, encouraged by regulators, had found ways around the
"It's a big deal that Congress finally did it, but the overwhelming
majority of opportunities have already been taken advantage of,"
says Thomas O'Brien, chairman of PNC Bank. It, for example, not
only has a brokerage business and offers its customers insurance
from an outside company, but it also provides banking products
to customers of insurance companies.
While the bill knocks down the barriers between banks, brokerages
and insurance companies, it keeps financial services companies
off-limits to commercial firms. Ford Motor, for instance, can't
But the legislation will make it easier and cheaper to create
"In the future, financial services is likely to look like retailing,"
says Lawrence White, a professor of economics at New York University.
"You'll have big financial department stores like Macy's, and
you'll have specialty boutiques like Gap or Foot Locker."
Treasury Secretary Lawrence Summers says the bill will stimulate
competition and therefore increase choice and reduce costs for
consumers, communities and businesses. "If increased competition
yielded savings to consumers of even 5%, they would save over
$ 18 billion per year," he said.
That's a big "if," consumer advocates say. There is no assurance
savings will be passed along. Instead, there is every reason to
conclude the law will lead to more mergers and consolidation.
And most studies have found that large banks charge higher fees
than smaller, community banks.
"Pretty soon we're going to have three financial services firms
in this country, four airlines, two media conglomerates and five
energy giants," says Sen. Paul Wellstone, D-Minn., one of the
eight votes against the bill. "And huge financial conglomerates
the size of Citigroup will be truly too big to fail."
The implication is not only that taxpayers would have to step
in if a giant gets in trouble, but that Congress might confuse
Citigroup's interest with the public interest, he says.
The bill also reduces competition by saying non-financial firms,
such as Wal-Mart, can no longer get into banking by buying thrifts,
says Warren Heller, research director at Veribanc, an industry
Battle over privacy
Customers' privacy has been one of the biggest points of contention
in the bill. Consumer advocates and members of Congress say the
bill doesn't do enough to protect financial privacy. On one hand,
it says banks must let customers tell them not to share personal
information with outside companies, such as telemarketers. But
critics say broadly worded exceptions make it easy to get around
Financial services companies will still be able to share customer
account information and other transactional data with affiliates
without telling customers.
"There will be abuses," predicts Martin Mayer, author of
The Bankers: The Next Generation. "There will be a public
The bill also:
* Makes "pretext calling," in which someone uses false
pretenses to obtain private financial information, a federal crime
punishable by up to five years in prison.
* Requires automated teller machine operators to disclose
fees and give customers the right to cancel a transaction before
a fee is charged.
* Requires banks to disclose their privacy policies to
customers every year.
* Prohibits banks from leading customers to believe they
must buy insurance to get a loan.
* Requires banks selling insurance and securities to make
clear that those products are not federally insured.
* Requires banks to have a satisfactory rating on community
lending before they could expand into other financial activities.
* Prohibits federal law from pre-empting stronger state
financial privacy laws.
History of changes in the financial industry
A short history of U.S. financial modernization:
1929: The stock market crash ripples into a banking crisis and
the Great Depression. Nearly 10,000 of the nation's 25,000 banks
1933: The Glass-Steagall Act is passed by Congress and signed
by President Franklin Roosevelt. The act separates banking from
the securities industry and establishes deposit insurance.
1933: The Federal Deposit Insurance Corp., guaranteeing accounts
up to $ 2,500, opens for business.
1980: The Depository Institutions Deregulation and Monetary Control
Act permits interest-rate deregulation and interest-bearing checking
accounts, first step toward removing restrictions on competition
1980: The Office of the Comptroller of the Currency and Federal
Reserve authorize banks to establish subsidiaries to sell securities
and offer investment advisory services.
1993: Comptroller of the Currency authorizes insurance sales by
national banks in locales with fewer than 5,000 residents.
1999: Congress acts on the Financial Services Modernization Act.
Source: American Bankers Association
Where the money is going
Ten largest bank, securities and insurance company political contributors,
based on Federal Election Commission data as of Oct. 1:
Organization Total[+1] Dem. Rep.
American Financial Group $876,090 $250,000 $ 626,090
Citigroup $862,726 $484,246 $ 378,230
Goldman Sachs $791,132 $514,484 $ 276,648
Blue Cross/Blue Shield $528,193 $170,171 $ 357,522
Bank of America $453,055 $176,135 $ 276,920
Welsh Carson $422,750 $2,000 $ 420,750
American Bankers Assn $397,051 $170,700 $ 226,351
American International $395,625 $171,500 $ 219,125
PaineWebber $348,250 $119,950 $ 227,800
Morgan Stanley Dean Witter $335,955 $143,300 $ 192,655
1 -- Includes soft money, PAC and individual contributions and
contributions to third parties
Source: Center for Responsive Politics
GRAPHIC: PHOTO, B/W, 1930 AP file photo; Bank run: Irate customers gather in front of a closed New York City bank. The Great Depression triggered a financial crisis in which 40% of banks failed.
LOAD-DATE: November 05, 1999
3 of 11 DOCUMENTS
October 28, 1999, Thursday, FINAL EDITION
LENGTH: 492 words
HEADLINE: Banking bill protects consumers
BYLINE: Hjalma E. Johnson
Congress should pass the historic financial-modernization legislation
before it. The bill would give consumers more choice, better access
to financial services and, according to the Clinton administration,
lower costs, which will save Americans $ 15 billion a year.
Just as important, the bill protects consumers. It's "the most
extensive financial privacy law ever enacted by Congress," said
House Banking subcommittee Chairwoman Marge Roukema, R-N.J.
Across the aisle, two key House Banking subcommittee Democrats,
John LaFalce, of New York, and Bruce Vento, of Minnesota, told
colleagues in a letter this week that without the bill, the financial-services
system would continue to evolve "on an ad-hoc basis, without
the new protections for consumers and communities this bill incorporates."
The bill enjoys incredibly broad support from Republicans and
Democrats in Congress and the Clinton administration. Last week,
the Rev. Jesse Jackson released a statement endorsing the bill.
The same basic privacy provisions that are in the bill passed
the House earlier by a vote of 327-1.
If enacted, this bill would require all financial institutions
to disclose their privacy policies to customers annually. Customers
would be able to "opt out" of having their private financial
information shared with outside marketing companies. And federal
and state regulators would be directed to set up comprehensive
standards for ensuring the security and confidentiality of consumers'
The law would also make "pretext calling," using fraud or deception
to obtain customer information, a federal crime.
While some advocated more sweeping measures, these hadn't been
thought out and would create serious negative consequences. Some
of these proposals would have made it harder to track down criminals
who commit financial fraud, or would have eliminated such accepted
consumer conveniences as combined monthly statements and multiple-account
Customers might even have found that a financial institution couldn't
answer simple account questions because it would have been unable
to gather information on mortgages, loans and checking accounts
in one place.
This legislation is really about serving customers in the Information
Age without tying the hands of banks, insurance companies, securities
firms and credit unions. These financial-service providers want
to offer their equivalent of one-stop shopping, which is really
nothing more than the product of shared customer information.
Clearly, this bill does not address all questions on privacy,
nor is it designed to do that. I know I speak for all bankers
when I say that we've worked hard to earn our customers' trust.
We will work even harder to preserve their trust in the electronic
environment of the future. We will protect the financial
privacy of our customers.
Our future depends on it.
LOAD-DATE: October 28, 1999
4 of 11 DOCUMENTS
October 27, 1999, Wednesday, FINAL EDITION
LENGTH: 479 words
HEADLINE: BOND YIELD RISES
BYLINE: Compiled from staff and wire reports
Bond prices fell Tuesday, pushing the yield on the 30-year Treasury
bond to a two-year high, as worries about the economy heating
up aggravated interest rate concerns. The price of the 30-year
Treasury bond fell 11/32 points, or $ 3.44 per $ 1,000. Its yield,
which moves in the opposite direction, rose to 6.37% from 6.35%
Monday, the highest yield since 6.42% on Oct. 22, 1997.
DOLLAR DROPS: The dollar fell against the yen Tuesday amid
expectations that Japan may unveil a larger-than-expected economic
stimulus package. In late New York trading, the dollar was at
104.69 yen, down from 105.31.
PRIVACY THREATENS BILL: Key Democratic lawmakers called
on President Clinton Tuesday to veto sweeping legislation to modernize
financial services laws on grounds it allows too much sharing
of consumers' private financial information without their permission.
Rep. Edward Markey, D-Mass., is leading the fight. In the Senate,
Richard Shelby, R-Ala., has served notice that he will try to
force changes in privacy provisions and failing that, try to derail
the bill. Under Senate rules, a single senator can hold up action
for hours or days if he chooses.
RATIFIED: United Auto Workers union members at Ford Motor
have ratified a new four-year contract, with 85% of those voting
favoring it. The vote ends months of negotiations that saw the
UAW win gains in wages and pensions without a major walkout. The
union has said that deals with Ford, General Motors and DaimlerChrysler
will increase the average member's pay by $ 29,000 over four years.
NO VOTE: Representatives from Fortune 500 companies
postponed a decision Tuesday on whether to loosen the definition
of minority-owned businesses. The National Minority Supplier Development
Council now requires that companies be 51% minority-owned, but
was considering changing that to 30% for publicly traded companies
on a case-by-case basis. Those for the change said it would help
companies grow by selling stock. Some minority groups said it
could hurt small companies' chances of selling to big companies.
JET FLAP: Continental Airlines CEO Gordon Bethune criticized
Airbus Industrie ads touting the four-engine A340 models for trans-Pacific
flights. Bethune says the ads "exploit the fears of the traveling
public" that two- and three-engine airliners may be less safe.
Airbus says the ads, in industry magazines, were not meant "to
scare anyone." Continental flies two-engine Boeing 777s over
KIDS' SITES: Viacom's MTV Networks unveiled a company Tuesday,
Nickelodeon Online, that will operate its kids-oriented Web sites
and might be spun off. The unit will include destinations for
children ranging from preschoolers to teens and for fans of sitcoms.
There also will be sites featuring interactive games, help for
teachers and toy sales.
LOAD-DATE: November 02, 1999
5 of 11 DOCUMENTS
October 25, 1999, Monday, FINAL EDITION
LENGTH: 407 words
HEADLINE: Bank reform bill moves close to vote in Congress
BYLINE: Christine Dugas
Congress has overcome the last big hurdle to completing a 25-year
effort to modernize the financial services industry.
The landmark bill would remove the remaining Depression-era barriers
between banks, insurance companies and brokerages. It could go
to the full House and Senate for a vote this week. Although the
exact wording of the bill remains to be seen, experts predict
it will pass both houses and be signed by President Clinton.
"The financial services modernization legislation is the most
important banking legislation in 60 years," said Phil Gramm,
R-Texas, chairman of the Senate Banking Committee.
Early Friday morning, lawmakers and the administration reached
a compromise on the Community Reinvestment Act (CRA), which requires
banks to address the credit needs of low-income neighborhoods.
Among amendments approved was a provision to prohibit any financial
holding company from engaging in new activities if its bank has
an unsatisfactory or lower CRA rating.
"The final bill assures that CRA remains vital and relevant in
the new financial landscape," Jesse Jackson said.
Although the walls separating financial services industries have
been eroded, the bill would greatly ease the way for the various
businesses to join together. One immediate beneficiary is Citigroup,
which was formed by the merger last year of Citicorp, parent of
Citibank, and Travelers Group, parent of Travelers insurance company
and brokerage Salomon Smith Barney. Without legislative reform,
the company would have to divest operations or restructure.
Proponents say the bill would lead to lower prices and greater
convenience. But consumer groups say it does not do enough to
protect privacy and ensure affordable banking.
Among other things, the bill would:
* Extend the prohibition on mixing banking and commerce
so that commercial businesses could not buy savings and loans.
Banks that already own S&Ls would be exempt.
* Make "pretext calling," in which someone uses false
pretenses to obtain private financial information, a federal crime
punishable by up to five years in prison.
* Require banks to disclose their privacy policies annually.
* Prohibit banks from implying that getting a loan is conditional
upon buying insurance.
* Require regulators to develop procedures for consumers
to recover losses related to the misrepresentation of risky investments.
LOAD-DATE: October 25, 1999
6 of 11 DOCUMENTS
October 13, 1999, Wednesday, FINAL EDITION
LENGTH: 1191 words
HEADLINE: Russia rattles Swiss banks New laws lift shroud of secrecy amid money-laundering scrutiny
BYLINE: Tom Lowry
GENEVA -- On any given afternoon, Russian businessmen gather in
the outdoor cafés here overlooking serene Lake Geneva and
the snow-covered Alps beyond. They sip espressos, chain-smoke
Turkish cigarettes and talk about -- what else? -- money.
The Russians are no different than any of the other international
business people who fly into Switzerland every day to oversee
deposits into the super-secretive accounts of Swiss banks. The
ritual has gone on for decades.
But lately -- with the spotlight on expanding investigations into
money-laundering allegations -- the well-monied Russians are stirring
suspicions among the private bankers who discreetly cater to the
"The bankers here are desperately afraid of Russian money,"
says Andre, a private banker in Geneva for 12 years.
Andre asks that his last name not be used. "It would just be
too dangerous," he says. He fears the scrutiny of regulators
and investigators and the wrath of his fellow bankers.
"Middle Eastern money: You know where it comes from -- oil, right?"
Andre says. "But the money coming out of Russia and Eastern Europe,
it's hard to tell. Russians will do anything to get money out
of the country."
Investigators from at least four countries are probing separate
allegations that billions of dollars, including International
Monetary Fund loans, were illegally diverted by Kremlin officials,
businesses and Russian organized crime groups through U.S., Swiss
and other banks. The investigations have resulted in more than
two dozen Swiss bank accounts being frozen. Last week in New York,
federal prosecutors filed the first criminal charges in the largest
case, which involves $ 7 billion that moved through accounts at
the Bank of New York. The bank is cooperating in the investigation.
The heightened scrutiny comes as new money-laundering laws here
are opening up Swiss banks as never before. Money laundering is
the criminal act of disguising the proceeds of a crime. That's
often accomplished by transferring funds through multiple bank
accounts, shell companies and legitimate businesses to mask the
origin of the money.
For almost 60 years, Swiss banks have been the most secretive
in the world. The banks began to thrive after World War II as
depositors in Europe sought the political stability Switzerland
Bank accounts identified in internal databases by only a number
are common. Bankers will often give the numbered accounts nicknames.
The identities of the account holders are known only by a select
group of senior bank officers.
Until a few years ago, bankers who made any voluntary disclosures
about accounts or clients could have gone to prison. The laws
have changed, but the mystique remains -- and money continues
to pour in.
Lightning-fast wire transfers can relocate money around the world
in minutes with a few taps on a computer. Still, once a week someone
carrying a metal briefcase full of millions in cash will knock
on Andre's door. "They will have just crossed the border from
Italy or France and want to deposit the money. We graciously turn
them away," he says.
Money-laundering experts say those mysterious visitors at bankers'
doorsteps are not uncommon. "Carrying cold cash is still a common
way for money to be deposited in offshore banking havens," says
Fred Meyers, a consultant who recently retired as a top money-laundering
investigator at the IRS. "After all, most crime is still an all-cash
"If we take dirty money but aren't aware it's dirty, it's no
excuse," Andre says. "The mentality has become so strict. Ultimately,
clients aren't being taken care of because of this fear."
But Daniel DeVaud, a Geneva magistrate who is investigating some
of the allegations, says: "My question is, do these banks have
a reason to be nervous? What do they do to look into the profile
of a customer?"
More than 400 banks operate offices in Switzerland and have more
than $ 2 trillion under management, according to the Swiss Bankers
Association. Many of those banks are affiliates of U.S. banks,
such as Citibank, Chase Manhattan, Bank of New York and Republic
Since the fall of the Soviet Union, Switzerland has become a favorite
depository for money flowing out of Russia. Swiss officials estimate
that up to $ 50 billion in Russian capital is deposited in Swiss
banks. The Russian money has been accompanied by an influx of
Russians. The government on average issues more than 70,000 visas
a year to people from the former Soviet Union.
That migration has raised concerns among the Swiss about a growing
presence of Russian organized crime.
The Swiss federal police have established a special unit to track
Russian crime gangs. Those investigations often lead to the bank
accounts held by Russian companies, Swiss investigators say.
"The Russians' image of Switzerland is sort of like their pop
music. It's stuck in the 1960s. Switzerland now has stringent
money-laundering laws to prevent any kind of dodgy money from
being deposited," says James Nason, head of international affairs
for the Swiss Bankers Association.
The first major steps to a more open banking system came in 1993
when a law was passed at a "due diligence convention" that abolished
accounts that could be set up by lawyers and trustees on behalf
of anonymous parties. The banks never knew whose money was being
held in the accounts.
Another law passed in Switzerland in the early 1990s gave bankers
the "right" to report suspicious transactions and to notify
prosecutors without violating the strict tenets of Switzerland's
bank secrecy laws. Last year, the Swiss went further, passing
a law stipulating that banks and other financial services companies
are "obligated" to report suspicious transactions.
That law also requires institutions to clarify with the customer
the purpose of any transaction if it appears to be unusual. And
it mandates bankers implement stricter due-diligence measures
to learn more about clients and the source of their money.
"It is still too early to determine the effectiveness of this
new legislation, but it is a positive response by Switzerland
to fight against money laundering," says a U.S. State Department
report on money laundering released earlier this year.
Between April 1998 and April 1999, Swiss banks filed 160 suspicion
transaction reports, and 107 of them were passed on to prosecutors,
says Nason of the bankers association. Swiss banks also assist
in about 2,000 international money-laundering cases a year.
"Ten years ago, no one could have imagined Switzerland would
have this structure," says Jean Francois Thony, a money-laundering
expert with the United Nations in Vienna.
"Money launderers are not targeting countries like Switzerland
any more, not at the first stages anyway. But associates of organized
crime in Eastern Europe react with the same old ideas: You have
to have a house on the Riviera and invest in Switzerland."
GRAPHIC: GRAPHIC, Color, Genevieve Lynn, USA TODAY; PHOTO, Color, Beatrix Strampfli, AP, for USA TODAY; PHOTO, B/W, Beatrix Strampfli, AP, for USA TODAY; Fear of Russia: Money-laundering probes have made banks leery. Shown are Credit Suisse and United European Bank in Geneva. Under microscope: As part of a money-laundering probe, investigators are reviewing accounts at Bank of New York-Inter Maritime Bank Geneva.
LOAD-DATE: October 13, 1999
7 of 11 DOCUMENTS
September 27, 1999, Monday, FINAL EDITION
LENGTH: 854 words
HEADLINE: Y2K is coming! Y2K is coming! Y2K<> uh, never mind
BYLINE: Paul G. Labadie
It happened as I was going through a box of old family photos,
looking at the faces of my great-great grandparents. The lights
in the house began to flicker with each thunderclap before settling
to low voltage for a moment, and then, finally, completely off.
No lights, no TV, no air conditioning. I looked out my front door
and saw the whole block had gone dark. I called the power company
and was told that it would be at least 24 hours before power could
"The whole area is out, trees are down," the power company representative
told me. "It's a disaster on the south side."
As I hung up the phone, I thought it was odd to have a disaster
I would be able to get some sleep through.
The United States is in its hurricane season, a time East Coast
residents brace for and beach-property owners dread. Winds that
can rip the roof off a home -- and cause flooding that would make
Noah blanch -- have easily and accurately earned the term "disaster."
Hurricane Floyd is the most recent example.
But "disaster" loses its distinction when used frivolously for
affectation. The natural disasters our grandparents had to endure
came with no radar, no Weather Channel and often no warning.
The early warnings are now a godsend, no doubt saving lives and
property by giving the necessary time for preparation. But they
also allow a window of opportunity for those who would dramatize
events for their own purposes.
Local TV weather people often seize any venial opportunity to
get on camera, interrupting regular programming to report an approaching
rain cloud. Weather bulletins, once reserved for devastating tornadoes
or blizzard warnings, now report approaching showers and winter
frost advisories to cover up the plants.
We have watered down the acceptable definition of "disaster"
to the point where true disaster has become almost unfathomable.
The famous Johnstown Flood of 1889 took more than 2,200 lives.
In 1904, an excursion steamer, General Slocum, burned in
the East River of New York, killing 1,030 passengers. In 1900,
a hurricane in Galveston, Texas, killed 8,000 people. Another
hurricane in 1928 hit south Florida, leaving 1,836 people dead.
And in 1918, an influenza epidemic killed 548,000 Americans and
millions of others worldwide.
That is why I have trouble labeling the Y2K situation a "disaster."
The advance warning and preparation have been so exhausting that
to call it an "oncoming disaster" would have Chicken Little
yawning. Airlines, banking institutions and private companies
have spent billions reprogramming and debugging software, in many
cases software that was already in need of upgrading. This June,
members of the National Emergency Management Association overwhelmingly
reported they already were "confident" or "very confident"
that seven critical infrastructures -- law enforcement, fire,
water, power, financial services, communications and sewer --
were ready for any Y2K problems. And 94% of public safety and
public health organizations said they had or were finishing contingency
plans for problem areas.
The reality of having a few street lights out or being unable
to surf the Web for a day or so hardly creates a situation that
necessitates the stockpiling of water, food, gasoline, and, for
the truly Y2KO'd, ammunition and toilet paper.
Much like the bomb shelters of the 1950s, Y2K survival supplies
likely will become the white elephants of the 1990s. Beyond keeping
a healthy supply of batteries and a jug of water, most Y2K anxieties
are exaggerations bred by the paranoia brokers: merchants trying
to create a market for their survival gear; conspiracy enthusiasts
who feed, and feed on, public panic; a media spinning concerns
into crisis in a desperate attempt to hold our shrinking national
You cannot go wrong predicting bad fortune. If you are correct,
you are a genius. If you are wrong, you can take credit for sounding
the alarm that prevented it.
One has to wonder if the old story about the boy crying wolf has
been replaced by "The Boy Who Rang Out a Warning: A Crisis Averted."
The worry and concerns of some people about the Y2K situation
seem to be the result of a national lost perspective. We tend
to overreact to situations we perceive to be out of our control.
Getting stuck in road construction is now cause for road rage;
bullied students can experience school rage. We've got retail
rage, cyber rage, and presumably, not long until rainy-day rage.
Problems that were once responded to with "How are we
going to solve this?" now bring the reaction, "How am I going
to handle this?" This is an attitude born not out of independence,
but introversion. Real disasters deserve our concern. Pseudo-disasters
deserve our self-control.
After the power in my house came back on, I looked once again
at the old photographs. All our great-great grandparents would
probably laugh at our softness. No lights? No TV? No computer?
Our new "disasters" were their everyday life.
Have a nice millennium.
GRAPHIC: GRAPHIC, b/w, Bob Laird, USA TODAY(Illustration)
LOAD-DATE: September 27, 1999
8 of 11 DOCUMENTS
August 27, 1999, Friday, FINAL EDITION
LENGTH: 1441 words
HEADLINE: Arbitration might be only choice
BYLINE: Christine Dugas
Get out your magnifying glass.
Unless you read the fine print in your bank and credit card applications,
account agreements and statement inserts, you may not realize
you're giving up the right to sue if you have a dispute.
Banks, credit card issuers and other lenders are turning to mandatory
arbitration to cut their legal costs. And some of their arbitration
clauses not only prohibit you from suing, but also ban class-action
Lenders also frequently set the terms of arbitration and pick
the arbitration service you'll use to resolve a claim.
Some lawyers and consumer groups say that stacks the deck against
Creditors tout arbitration clauses as a cost-effective, fair and
efficient way to resolve consumer disputes. Consumer advocates
counter that binding arbitration deprives consumers of their right
to a jury trial, discovery of the facts, and statutory and punitive
damages, says Julie Kline, editor of the Consumer Financial
Services Law Report.
Consumers have gone to court to challenge mandatory arbitration.
But legal experts say courts aren't likely to strike down an arbitration
agreement unless there is something particularly unfair about
For example, courts frown on agreements that force consumers to
pay arbitration fees, which can amount to several thousand dollars,
before they can arbitrate a small claim, says Paul Bland, a staff
attorney at Trial Lawyers for Public Justice. And the courts might
strike down clauses that bar consumers from suing but let the
company retain its right to go to court.
Watch what you sign
As a rule, if you sign a bank or credit card agreement that contains
an arbitration clause -- no matter how small the type -- you'll
probably be stuck with it.
It's less clear whether an arbitration clause will hold up if
a bank or card company imposes it just by putting a notice in
its monthly bills. A California Court of Appeals ruled last year
that Bank of America acted illegally when it put an arbitration
clause in a statement stuffer. But that ruling applies only to
That hasn't stopped companies such as American Express from adding
arbitration clauses. Among other financial services companies
that require arbitration are First USA, the giant credit card
issuer, and Green Tree Financial, a big home-improvement lender.
If you don't like the trend, you can always do business with another
bank or get another credit card, some industry experts say. But
that may be unrealistic, given the proliferation of arbitration.
"Whether it's a good thing or not, it's happening," says Peter
Lovenheim, author of How to Mediate Your Dispute. "What
concerns me is that many people don't know how to prepare for
How arbitration works
Here's the basic rundown:
* Arbitration is intended to provide an alternative to
costly legal battles. A survey by the National Center for State
Courts found that nearly 70% of those polled believe it isn't
affordable to bring a case to court.
"If I'm an individual consumer, and I have a specific dispute,
I'd rather be able to quickly and inexpensively resolve it through
arbitration or mediation," Lovenheim says.
* Most arbitration is confidential. That means you can't
discuss your case. And you can't find out how similar cases have
* Many experts say arbitration works best when it is voluntary,
and when consumers can choose the arbitration service. A lot of
companies specialize in what's called alternative dispute resolution.
The big national firms include the American Arbitration Association
(AAA 800-778-7879), JAMS/Endispute (800-352-5267) and the National
Arbitration Forum (800-474-2371).
Better Business Bureaus also provide arbitration. And there are
many local and regional firms, as well as solo practitioners,
such as retired judges, who arbitrate disputes.
But many companies require customers to use a firm the company
has picked. And consumer advocates are concerned that creates
a conflict of interest.
Britton Monts, a Dallas lawyer, is challenging First USA's arbitration
agreement, which forces customers to use the National Arbitration
Forum. Among other things, Monts claims the Forum's policies are
biased against consumers.
"Every rule in our procedure conforms with the law, and our procedures
have repeatedly been upheld by the courts," says Edward Anderson,
the Forum's managing director.
* Arbitration rulings usually are binding, and it's difficult
to challenge them. In general, you can only appeal if the arbitrator
made a calculation error or if you have evidence the arbitrator
* Although arbitration is supposed to be inexpensive, that's
not always the case.
For example, JAMS/Endispute requires each party to pay a $ 250
administrative fee. You will also pay an hourly fee for the arbitrator.
Fees can quickly exceed the amount of a small credit card claim.
At other firms, filing fees vary according to the amount of the
claim. The National Arbitration Forum charges $ 49 for claims under
$ 1,000. At AAA, the minimum filing fee is $ 125.
And you may get hit with other charges, depending on the complexity
of your case.
* Many firms now offer low-cost arbitration for small claims.
There is no in-person hearing. Instead, the arbitrator decides
the case based on documents submitted by each side.
That may be fine for a simple case.
But in other cases, a hearing may help. Lovenheim cites a case
of a music student who was injured in an auto accident. When she
went to arbitration with the insurance company, she could show
how a shoulder injury made it difficult to play the bassoon.
* You still may need to hire a lawyer. Most companies will
be represented by a lawyer unless the claim is very small, experts
say. You may only need to get help on the best way to present
your case. But if your claim is large, you probably will want
a lawyer to handle it.
* Most companies let you have some input into the selection
of the arbitrator or arbitrators who will decide your case. For
example, you might receive a list of several arbitrators along
with a synopsis of their work history. Each side would get to
strike one name and rank the others.
"Ultimately, you want someone sitting at the head of the table
who is impartial and knowledgeable about the subject," Lovenheim
What you should know
If arbitration is your only avenue for resolving a dispute, consider
these questions carefully before pursuing your case:
* Is the arbitrator's decision binding?
* Does the arbitration clause ban you from small claims court?
* Does the arbitration clause prohibit you from joining a class-action
* What will it cost?
* Find out where the hearing will be held.
* If the arbitrator decides against you, must you pay the other
side's legal bills?
* Can you request a waiver of fees?
* Can you choose the arbitration firm?
* How is the individual arbitrator selected?
* How much information will you get about the arbitrator's background?
* What kind of evidence can you present?
* Can you get documents to support your case from the opposing
* Can you bring witnesses to a hearing?
* If small claims are decided by a document arbitration without
a hearing, can you ask for one?
* Can you get punitive damages?
NASDR regulates brokers, firms
If you have a dispute with your stockbroker, you could end up
in arbitration administered by the National Association of Securities
Dealers Regulation. NASDR handles more than 5,000 cases a year,
or about 90% of U.S. securities arbitration cases. The process
is different from most other types of arbitration:
* It is managed by NASDR -- an industry group that regulates U.S.
stockbrokers and brokerage firms -- rather than by a private arbitration
provider. The Securities and Exchange Commission and the U.S.
General Accounting Office oversee the arbitration process.
* Investors not only get employment information on prospective
arbitrators, they also get computer printouts of the arbitrator's
five most recent decisions, including details of the cases and
amounts of the awards.
* Investors are not banned from entering a class-action suit against
the brokerage firm. But they are not eligible for arbitration
if they get involved in a class-action suit.
* If a registered broker refuses to pay an arbitration award to
an investor, NASDR can bring disciplinary proceedings and suspend
GRAPHIC: GRAPHIC, B/W, Web Bryant, USA TODAY; GRAPHIC, B/W, Jerry Mosemak, USA TODAY, Source: NASD Regulation (BAR GRAPH)
LOAD-DATE: August 27, 1999
9 of 11 DOCUMENTS
July 26, 1999, Monday, FINAL EDITION
LENGTH: 505 words
HEADLINE: With patient-data leaks spreading, Congress fans the flames
If you happen to live in Georgia, your genetic information is
a closely guarded secret. Results from genetic tests can't be
released to anyone without your permission.
Eighteen other states also padlock that sensitive personal information,
more or less. But in the remaining 31 states, genetic data are
pretty much an open book.
So it goes with medical privacy. Thanks to the lack of any uniform
national privacy rules, states have, on their own, tried to give
residents some modicum of privacy protection. But the rules are
spotty and often weak.
And as if that's not bad enough, Congress is close to making things
worse. The House passed a bill earlier this month that could strip
some existing state laws.
To get a sense of how unprotected patients' medical records are
from prying eyes today, consider this: Just two states -- Rhode
Island and Wisconsin -- have comprehensive medical privacy statutes.
The rest have tackled the issue in piecemeal fashion, according
to a survey of state privacy laws by Georgetown University's Health
Privacy Project. A little protection for this ailment here, some
disclosure rules for that provider there. Some examples:
* Just 11 states give privacy rights to those diagnosed
with birth defects.
* Only four protect information about abortion.
* Just 17 states specifically restrict disclosures by mental
* Only 18 states put restrictions on insurance company
The result is that the most sensitive information about medical
conditions and treatments is left unprotected. That becomes more
troubling every day, as technology eases collection of health
data and as the list of those hoping to use that data grows.
Employers use medical information in hiring decisions, pharmacies
sell prescription data to marketers, and researchers collect patient
records for their studies. All without the patients' knowledge
Given this state of affairs, it's no surprise that one in six
patients reports taking extreme steps -- such as avoiding doctors
or paying cash -- to preserve privacy.
Congress long ago recognized that this situation was unacceptable.
Three years ago it vowed to enact comprehensive privacy laws.
It even gave itself a deadline of August 21.
Yet with just four weeks remaining, lawmakers are showing signs
that, if anything, they intend to make matters worse.
A "privacy" provision tucked in a House financial services bill
would, among other things, open records to credit agencies and
banks without patient consent. That measure awaits Senate approval.
At the same time, comprehensive privacy bills are bogged down
thanks to industry pressure against them.
Based on the rules Congress set for itself, missing the August
deadline means that regulators must craft the protections, and
early signs are that those won't be strong enough.
Unless Congress sees the light, and soon, patients will be left
with the luck of the state privacy draw.
GRAPHIC: GRAPHIC, B/W, Alejandro Gonzalez, USA TODAY, Source: Georgetown University's Health Privacy Project (BAR GRAPH)
LOAD-DATE: August 12, 1999
10 of 11 DOCUMENTS
July 13, 1999, Tuesday, FINAL EDITION
LENGTH: 755 words
HEADLINE: Insurance ads change tune Campaigns broaden scope as companies branch out
BYLINE: Greg Farrell
DATELINE: NEW YORK
NEW YORK -- Allstate Insurance, the "good hands" people, launches
a new ad campaign during tonight's telecast of Major League Baseball's
All-Star game. The campaign's goal: to introduce you to some of
the faces behind the hands.
The campaign has other goals as well. At a time when low-cost
insurance providers are signing people up via 800 numbers, Allstate
is reminding viewers that in times of crisis, it helps to have
real live agents to process your claim.
But perhaps the most important goal: Allstate is positioning itself
for the prospect of a brave new world embedded in the Citicorp/Travelers
Spurred on by that marriage between a bank and an insurance company,
Congress is considering the Financial Services Deregulation Act,
which would let everyone from banks to stockbrokers to insurers
compete more directly in each other's businesses.
"When you look at the financial services landscape, it's radically
changing," says Robert Devlin, CEO of American General Financial
Group. "Even though the regulatory environment has not yet been
opened, we have been in one another's businesses, to some extent."
Over the past year, a number of insurance companies have stepped
up their ad spending to try to strengthen their brand images in
a more crowded marketplace, as well as to adjust their images
to be more appropriate for the wider selection of services they'll
* American General Financial Group, which had been spending
just $ 4 million a year to promote its insurance and retirement
products, launched a $ 25 million ad campaign last fall, sponsoring
major events including the World Series, the NFL playoffs and
the NCAA basketball tournament. It will also advertise on tonight's
All-Star game. The campaign's broad theme: "Live the life you've
* The Hartford Financial Services Group launched a campaign
on the Super Bowl in January that takes a light-hearted view of
accidents. The irreverent viewpoint, combined with a message of
empowerment, stands out in the category. The theme: "Whatever
life brings. Bring it on."
* Metropolitan Life Insurance, which plans to demutualize
and go public, has used Snoopy and other Peanuts characters over
the years to support its slogan, "Get Met. It pays." But as
it branches out, it is aware that Snoopy may not be the best spokesperson
to sell stocks and securities. Its new ad campaign, launched in
March, introduces viewers to some of its agents, much like the
current Allstate campaign.
"This is not an anti-Snoopy decision," explains Kevin Foley,
vice president of public relations at Met Life. "What we wanted
to do is feature the role our agents play in the lives of our
customers. But certainly the world of insurance companies is changing,
and people have to be mindful of that." According to Foley, MetLife
is spending about $ 25 million on advertising this year.
Financial services advertising is tricky because companies are
selling intangibles like trust, not specific products like sports
cars or coffee beans.
"It has become a more crowded marketplace," says Edward Spehar,
life insurance analyst at Merrill Lynch. "The real challenge
is how to differentiate yourself so people remember who you are."
In order to stand out, Hartford took an unusual route for its
business: humor. "We wanted to break through the clutter," says
Ed Morgan, head of corporate relations. "The light-hearted nature
of the ads help people say we're a different kind of company."
Allstate's new campaign tries to break through the clutter from
the opposite direction. It shows graphic footage of the devastation
that can follow catastrophes like hurricanes and lets some of
its own agents describe how they helped policyholders. The ads,
from agency Leo Burnett, all conclude the same way: "You're in
good hands with Allstate. Mine."
"These are all real stories and real people," says Jill Weaver,
vice president of advertising at Allstate. " 'You're in good
hands' will always remain our slogan."
Such consistency may not be good enough, some observers warn.
"For years, the insurance industry has been about big rocks and
umbrellas and symbols of reassurance and security and trust,"
says Steve Gardner, a principal at the Gardner Nelson Project.
"That is just going to be one of the dimensions that will be
important in a world where you can get a whole range of financial
services from one buyer. They have to broaden beyond that."
GRAPHIC: PHOTO, B/W; PHOTO, B/W; PHOTO, B/W; Serious message: Allstate's campaign shows footage of devastation and lets some of its agents describe how they helped policyholders. The ads all conclude: 'You're in good hands with Allstate. Mine.' More upbeat: Hartford Financial Services Group launched a campaign on the Super Bowl in January with the theme: 'Whatever life brings. Bring it on.' Move over: Snoopy won't star in MetLife's new campaign.
LOAD-DATE: July 13, 1999
11 of 11 DOCUMENTS
April 27, 1999, Tuesday, FINAL EDITION
LENGTH: 477 words
HEADLINE: Focused Chenault works hard for success
BYLINE: Sandra Block
Kenneth Chenault has always worked extremely hard, and he's almost
always devoted his prodigious energy to American Express.
Chenault, a 1976 graduate of Harvard Law School, went to work
for the financial services giant in 1981. Before joining American
Express, he spent two years at Rogers and Wells, a top Wall Street
law firm, then moved on to Bain & Co., a management consulting
Chenault (pronounced shen-ALT) started in the strategic planning
department of Travel Related Services, American Express' card
and travel unit. From there, he worked his way up the corporate
hierarchy, putting in 11-hour days and spending many evenings
His work ethic has been put to the test at American Express. Comfortable
with its No. 1 position, AmEx had become sluggish.
When Chenault was put in charge of a corporate restructuring program
in 1995, he grabbed the opportunity to shake up the system. In
an 18-month period, the firm introduced more card products than
it had the previous 10 years. It added the Optima credit card,
launched co-branded cards and allowed customers to redeem points
Chenault has always been an achiever. He was president of his
high school class and captain of his senior track, basketball
and soccer teams.
As a student at Bowdoin College in the early 1970s, he was involved
in efforts to recruit more African-American students and professors,
but distanced himself from more militant activists.
Instead, he wrote a senior thesis on the history of African-Americans
at Bowdoin. While the college had always boasted of having one
of the nation's first black college graduates, Chenault pointed
out that for decades afterward, it had none.
In an interview, Chenault said he doesn't expect Monday's announcement,
which won't take affect for two years, to change the way he works.
"I've always been focused on performance," he says, "not what
my next job would be."
TEXT OF BIO BOX BEGINS HERE:
About Kenneth Chenault
Born: June 2, 1951
Education: Bachelor of Arts in history, Bowdoin College,
Maine, 1973; Harvard Law, 1976
First job out of law school: Rogers & Wells, Wall Street
Career at American Express: Joined in 1981 as director
of strategic planning; president of Consumer Card Group, 1989;
president of American Express Travel Related Services U.S., 1993;
vice chairman of American Express, 1995; president and chief operating
Total 1998 compensation: $ 6.5 million
Corporate board memberships: American Express, IBM, Quaker
Other memberships: National Collegiate Athletic Association,
NYU Medical Center, Arthur Ashe Institute for Urban Health, Council
on Foreign Relations
Hobbies: Skiing and tennis
Personal: Lives in New York with wife Kathryn and two sons
GRAPHIC: PHOTO, B/W, Gino Domenico, AP
LOAD-DATE: April 27, 1999