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II

1113

- A~ R~4t
Federal Reserve Bank
of San Francisco

From the Boardroom

2

Building Bridges

4

Highlights of 1993

19
-ed era l Reserve Bank

Directors

26

of San Francisco

APR - 8 1994

LIBRARY
The Federal Reserve Bank of San Francisco is one of twelve
regional Reserve Banks which, together with the Board of
Govemors in Washington, D.C., comprise the nation's
central bank.
As the nation's central bank, the Federal Reserve is
responsible for making and carrying out our nation's
monetary policy. It also is a bank regulatory agency, a
provider of wholesale-priced banking services, and the
fiscal agent for the Vnited States Treasury.

The Federal Reserve Bank of San Francisco serves the
Twelfth Federal Reserve District, which includes the nine
western states -- Alaska, Arizona, California, Hawaii, Idaho,
Nevada, Oregon, Vtah and Washington -- quam, American
Samoa, and the Northern Mariana Islands.
To serve this expansive region, the San Francisco Reserve
Bank has five offices: the headquarters in San Francisco,
and offices in Los Angeles, Portland, Salt Lake City, and
Seattle. Each office provides financial services to the public
and banking institutions in its locale.

1

FROf1 THE gOARDROOf1
Seated, from left,
Judith M . Runstad, Deputy
Chairman. and James A . V ohs,
Chairman. Standing, from left,
Patrick K. Barron, First Vice
President, and Robert T. Parry,
President.

T

he Community Reinvestment Act (CRA) calls for financial institutions to iden­
tify and meet the credit needs of their local communities, including low- and
moderate-income neighborhoods. For those of us living in the Twelfth District,
community reinvestment has become particularly significant during the 1990s as banks
look for new markets in an increasingly competitive environment and the western
economy continues to be challenged by broad-based economic problems.

During these difficult economic times, it's easy to lose sight of how the long-term
strength and growth of our regional economy depends on the health of our local
communities and their ability to create new jobs and increase incomes. Our region's
prosperity was founded on small business growth and community development at the
local level. Yet, for some of our local communities, particularly low- and moderate­
income areas, ready access to credit for housing, small business, and community
development needs has been limited for some time. These limitations have been
compounded by the fact that many segments of our low- and moderate- income
communities are unable to qualify for loans in conventional credit markets.
In passing CRA, Congress reaffirmed the fundamental role banks play in the economic

well-being of all segments of the communities they serve. To meet the challenge of
providing credit to underserved markets, many Twelfth District banks are working with
local community and government organizations to leverage resources and share risk to
bridge the lending gap unfilled by conventional credit markets.
2

In this Report, along with providing an overview of CRA, we profile how banks in our
District are contributing to public/private partnerships to meet their CRA obligations
and open new markets. We also focus on the important role the Federal Reserve and
our Community Affairs staff playas a catalyst for bringing public/private partners
together and in providing banks with guidance and information on CRA and fair
lending-related issues.
This Report also highlights the Bank's performance in achieving its fundamental
objectives during the past year. Regulatory changes and rapidly changing technology are
reshaping the wholesale banking arena in which we operate. To meet the challenges
presented by this dynamic environment, we continue to enhance the quality, safety, and
efficiency of our payments system and to develop innovative financial services and
products to assist financial institutions and their customers.
The supervision and regulation of state-chartered member banks and bank holding
companies is another critical area of responsibility for our Bank. Our goals in this
area continue to be to maintain a safe and sound banking system and to ensure
compliance with CRA and other fair lending legislation so that all of our Twelfth
District constituencies have equal access to credit.
We would like to extend our thanks and appreciation to our Twelfth District directors
for their invaluable counsel during 1993. The Directors' independent assessment of
economic and financial conditions throughout our nine western states is critical to the
formulation of monetary policy.
We also would like to express our sincere thanks and appreciation to those directors who
completed their terms of service during 1993: On the San Francisco Head Office Board,
John N. Nordstrom (Co-Chairman, Nordstrom, lnc., Seattle, WA); on the Los Angeles
Branch Board, former Chairman, Donald q. Phelps, (Chancellor, Los Angeles Commu­
nity College District, Los Angeles, CAli on the Portland Branch Board, Stephen C,
Kimball (Chairman, President and CEO, Baker Boyer Bancorp, Walla Walla WA); on
the Salt Lake City Branch Board, H. Roger Boyer (Chairman of the Board, The Boyer
Company, Salt Lake City, VT), Curtis H. Eaton (Vice President, Manager; Community
Banking Area First Security Bank of Idaho, N.A., Twin Falls, ID), and Virginia P.
Kelson (Partner Ralston Consulting Group. Salt Lake City, VT); and, on the Seattle
Branch Board, B.R. Beeksma (Chairman of the Board, InterWest Savings Bank, Oak
Harbor, WA).

~T7
James A. Vohs
Chairman

Robert T. Parry
President

3

gUfL1)fNG ERf1)G£S
COM M V N llY REINVESTMENT IN THE
TWELFfH DISTRICT

"W e simply cannot as a nation tolerate unfair and illegal activity that puts some of our
citizens at a disadvantage as they try to participate in the credit markets."
-Alan Greenspan
Chairman, Federal Reserve Board of Govemors

4

In 1977 Congress passed the Community

community groups and bankers alike. This

Reinvestment Act (CRA) directing banks and

dissension sparked a major reform effort

thrift institutions to help meet the credit

during 1993 that centered around providing

needs of all segments of the communities

examiners with objective standards for

they serve, including low- and moderate­

measuring a bank's lending to low- and

income neighborhoods. Among Congress'

moderate-income areas. Under the proposed

aims in passing the law was stemming the

plan, the new measures consider the ratio of

practice of redlining, which was perceived as

a lender's market share of loans in low- and

one of the causes of economic deterioration

moderate-income census tracts to its overall

in our nation's inner cities.

market share of loans made in its entire
service area. Less stringent guidelines would

CRA requires each of the four federal banking

be applied to banks with less than $250

regulators to encourage financial institutions

million in assets. The proposed regulations,

to help meet the credit needs of all segments

set to be finalized during 1994, do not alter

of their delineated communities, consistent

current public disclosure requirements.

with safe and sound banking practices.
Vagueness in the original legislation has
tended to give financial institutions consider­
able flexibility in creating CRA programs and

BVILDINC/ COMMVNITY
PARTNERSHIPS

loan products which best suit their expertise
and the credit needs of their communities.

A growing trend in successful community

CRA does not require institutions to offer

reinvestment programs is the formation of

specific types or amounts of credit to fulfill

local economic partnerships that bridge the

their CRA obligations. The financial institu­

lending gap in conventional credit markets

tions covered by CRA are federally-insured

to finance affordable housing and small

commercial banks, savings banks, and

businesses in low- and moderate-income

savings associations. Credit unions are

areas. These partnerships are comprised of

exempt from CRA.

government agencies, community groups,
and banks that contribute their business

CRA has been amended and strengthened

expertise, pool capital, and share risk to

since its passage in 1977. A significant

make financing community development and

change requiring banks to make their CRA

affordable housing projects possible. Neither

performance evaluations and ratings available

the public nor the private sector can

to the public was included in the Financial

singlehandedly underwrite these projects

Institutions Reform, Recovery, and Enforce­

because of their complexity, higher degree of

ment Act of 1989 (FIRREA). Public disclosure

risk, and failure to conform to conventional

requirements, which took effect on July 1,

underwriting standards. Throughout the

1990, were instrumental in paving the way

Twelfth District, banks are joining with

for greater public scrutiny and community

community and government organizations to

involvement in the CRA process.

build local partnerships and develop creative
strategies for financing unmet housing,

Since its inception , CRA's overall lack of

business, and community credit needs. This

specificity has stirred dissatisfaction among

is a complex task given the divergent needs
5

of our nine state region, the largest in the

depending upon the housing needs of their

Federal Reserve System. California, with 32

communities.

million people, is the most highly populated,
culturally diverse state in the nation.

Lending consortia provide banks with safe
and sound lending opportunities to meet

Twelfth District banks are contributing to

their CRA obligations by allowing them to

local partnerships in a number of ways.

contribute to projects they can't underwrite

Some banks have united to form multi-bank

on their own. This is especially true for

lending consortia which pool funds to

small- to medium-sized banks which may not

provide long-term mortgage financing for

have the funds or specialized knowledge to

affordable housing in low-and moderate­

directly finance these complex loans. In a

income areas. Some lending consortia also

lending consortium, each bank's risk is

finance construction and renovation loans,

proportional to its share in the loan pool.

ASSESSfNQ eRA PERfORMANCE
Each institution covered by CRA must have:
Periodic CRA examination by its supervisory agency evaluating such
performance factors as whether the institution has identified the credit needs
of its delineated community, marketed products to aU segments, participated in
community development projects, and engaged in discriminatory lending or
other illegal credit practices. The examination results in the bank's CRA
Performance Evaluation and Rating.
CRA Statement delineating the geographic community it serves, loan
products offered, and its CRA notice.
Public File containing current CRA Performance Evaluation and Rating,
CRA Statement, and any written comments received from the public regarding
its CRA performance.
CRA performance is considered by the Federal Reserve or other agency when an
institution applies to:
alter its business through a merger or acquisition, branch expansion, or office
relocation,
obtain federal deposit insurance;
fonn a bank or savings association holding company.
A bank's CRA Performance Rating does not, in any way, reflect its financial
condition.

6

Multi-bank lending consortia have helped

Joining a multi-bank lending consortium is

finance a wide range of affordable rental

not the only way a bank may participate in

units across the District including single

the community development process. Many

room occupancy housing in urban areas,

banks have established their own specialized

senior and "special needs" hous ing, and

community lending programs which work in

housing for low-income farmworkers and

concert with government and community

other low- and moderate- income families .

funding to provide interest rate subsidies ,

In many of our District states, consortia also

blended rate loans, and loan guarantees

are contributing funds to help make the

which reduce the borrower's cost while

dream of home ownership a reality for low­

providing an acceptable level of risk for the

income families, single-parent households,

contributing bank.

the disabled, the elderly, and other
underserved groups.

One Twelfth District institution, BankAmerica
Corporation, has taken its specialized

Along with contributing financing to under­

lending program a step further to form its

write affordable housing projects, some

own community development bank -- one of

lending consortia are working with local

only a handfu l in the nation. Established in

community and government organizations to

1990, Bank of America Community Develop­

finance small business and community

ment Bank (BACDB) has worked with other

development credit needs. Most start-up

public/private partners to finance affordab le

businesses and community development

housing and community and business

pro jects are insufficiently capita lized and lack

development projects in almost all of our

the necessary collateral to qualify for loans

nine district states.

in the conventional credit market.

bridge the lending gap to finance housing

BACDB has helped

with on-site childcare for low-income families
Small business and community deve lopment

in San Diego, provide emergency loans to

credit programs under CRA are those which

small business owners in the aftermath of

directly benefit underserved markets and

the South Central Los Angeles riots, and

disenfranchised populations to help

contribute construction and long-t erm

stimulate job creation and promote economic

financing for a Native American outpatient

self-sufficiency. Working in partnership with

medical care facility.

community organizations, banks -- indepen­
dently or as members of consortia -- help

To help meet the need for longer-term small

meet the credit needs of these "nontradi­

business loans in their communities, some

tional" borrowers through financing small

banks have become specialists in making

businesses, investing in job skills and

Small Business Administration (SBA)

training programs, or fund ing community

guaranteed loans . Guaranteed loans are

daycare and healthcare programs. Banks

readily sold in the secondary market

also provide real estate financing for the

replenishing a bank's sources of financing so

acquisition or renovation of community

that it can continue to make loans in its

service facilities such as healthcare clinics,

local communities. To contribute as equity

childcare centers, and job training agencies.

investors in small businesses and community
service organizations, some banks have
7

BRID(jIN(j THE ·
. LENDIN(j (jAP

P

ublic /private partnerships are successfu lly bridging the lending gap
in conventional credit markets. Bridging this gap requires financial
contributions from each partner -- wh ether launching a small business or
funding community development or affordable housing. For example, to
complete an affordable housing project from the ground up requires an average of
six financing partners. Palo Verde Gardens, a new senior citizens rental housing
development recently completed in N evada is a prime example of how the
public, private, and community sectors come together to bridge the lending gap.
The project targets senior citizens at 55 percent or less of the median income for
Clark County, N evada.
Palo Verde Gardens originated through the efforts of three public/private partners
which serve as owners/sponsors of the apartment complex. The H enderson
Association for Senior Citizens H ousing, a N evada nonprofit corporation whose
mission is to develop affordable housing for senior citizens, was the nonprofit
sponsor. Henderson Association also has partial own ership in the development
to ensure long-term maintenance and affordability. The for-profit sponsor was
CO M CAL Investments Ltd.. a California limited partnership, which provided
the development and construction expertise to formulate the project. Various
corporate and private investors served as limited partners to contribute substantial
equity dollars to the project in exchange for majority ownership and the tax credit
benefits.
The land purchase and building construction were made possible by the
contributions of six more public/private partners. The City of H enderson and
Clark County each contributed Community Development Block Grants (CDBCi)
funds toward one-half of the land acquisition. Bank of America Community
Development Bank (BACDB) was the construction lender while the Nevada
Community Reinvestment Corporation (NCRCL a 19-bank lending consortium,
was the long-term permanent mortgage lender. The Housing Authority of Clark
County is the Property Manager and Rental Agent and the Nevada State Hous­
ing Division administers the Low Income Housing Tax Credit program. This
innovative public/private partnership successfully bridged the lending gap to
build a 60-unit much-needed, affordable housing complex for Nevada senior
citizens.

8

formed their own community development

using flexible underwriting at below market

corporations (CDCs) or have joined multi ­

interest rates.

bank CDCs.

foundations, charitable organizations,

RLF funds come from

financial institutions, and other corporate
and individual donors which provide grant

RESPONDINCj TO THE NEED

monies or loans.

Community organizations are the backbone

For larger loans, UHF helps nonprofit

of successful community reinvestment. They

developers obtain below market rate perma­

are the grassroot link to identifying the

nent and interim loans from conventional

unmet credit needs of our Twelfth District

lenders by providing technical assistance in

communities. Along with contributing

packaging loans.

financing, some community organizations

risk while financing short- and medium-term

provide the specialized knowledge needed to

loans, UHF has brought institutions together

package these complex loans within safe and

to form multi-bank mortgage banking pools.

sound lending guidelines. The Low Income

Other creative financing strategies include a

Housing Fund (UHF) is one such organization

mortgage guarantee program and an

working to help at-risk communities in our

expiring use program to help tenant groups

District. Established in 1984, UHF is a non­

and non profits purchase government insured

profit, nongovernmental financial institution

properties.

To help institutions share

headquartered in San Francisco with branch
offices in Los Angeles and New York.

UHF has helped form public/private partner­
ships to tackle inner-city homelessness in

UHF's founding belief is that decent and

San Francisco, provide transitional housing

secure housing for all of our citizens is one

for women recovering from substance abuse

of the most basic human rights . UHF's mis ­

in Portland, and fund construction loans for

sion is to increase access to capital in low­

low-income home buyers in California and

income communities to provide adequate,

Arizona . UHF is one of many nonprofit

affordable housing for all Americans, particu­

community organizations in the Twelfth

larly those who have been greatly ignored in

District working to give our communities the

the past -- low-income families, the elderly

opportunity to grow.

living on fixed-incomes, the homeless, single
mothers, farmworkers , and peop le with
special housing needs.

LAY IN Cj TH E FOUNDATION

Through its direct lending program and as a

Small businesses form the economic fabric

loan packager, UHF has developed numerous

of our communities, creating new jo bs and

innovative financing strategies which bridge

income to help communities flo urish and

the lending gap to bring nonprofit deve lopers

become self-sufficient. Typically, banks do

and financial instit ut ions together. UHF's

not finance small business loa ns under

financing tools include a Revolving Loan

$50,000

Fund (R LF) which provides direct, short-term

the necessary collateral and investment

loans to nonprofit housing developers

capital to qualify for financi ng. Enter

and most start-up businesses lack

9

HOH£10 OW!)J

H

ome ownership is a key ingredient in breaking the poverty cycle
and revitalizing depressed areas. Often it lays the foundation for
economic self-sufficiency and growth, both for the home owners
and the community. Low-income families in Arizona are getting the chance
to experience this first-hand through the Home to Own program, a publici
private partnership that provides mortgage financing for low-income home
buyers. The two-year pilot program, which began accepting applications in
September 1993, is funded through an alliance of community and business
organizations along with the Federal National Mortgage Association
(FANNIE MAE) and First Interstate Bank of Arizona, the long-term
mortgage lender in the project. The Arizona Multi-bank Community
Development Corporation, another contributing partner, has invested
$500,000 in the project to help cover down payment and closing costs for
the low-income borrowers.
Home to Own bridges the lending gap by offering low-income working
families and special needs populations, who are unable to qualify under
conventional underwriting guidelines, a chance to break out of the poverty
cycle. Modeled after First Interstate's affordable housing program, Home to
Own plans to make the dream of home ownership a reality for 250 Arizona
families with its initial loan pool of $10 million. Housing counseling for
eligible borrowers covering all aspects of the loan process is an essential
element of Home ot Own to reach very low-income families.
Special populations served by the program include minority households,
single parent households, the elderly and disabled, along with other low­
income families. Once the pilot program is completed, the alliance hopes to
launch similar community-business partnerships throughout the Southwest.

10

microlending, an almost century old, little

peer-support, business assistance program

known practice of lending small, sometimes

where loan payments are collected and the

minuscule, amounts of money to help low­

new micro-entrepreneurs receive technical

income and other "nontraditional" borrowers

assistance. Another important goal of UMLF's

launch their entrepreneurial dreams.

program is to assist entrepreneurs in build­
ing their capacity to qualify for conventional

"Who wants to loan money to a single

financing as their businesses expand.

parent who has no job and is more than 45
years old?"

The answer to this question

UMLF's willingness to take a chance on

posed by Marjorie Ball, a Utah

Marjorie Ball enabled her to finance some of

Microenterprise Loan Fund (UMLF) borrower,

the basic ingredients -- a copier, laser

is obvious -- no one. This single mother's

printer, and marketing catalog -- to

plight is a common theme among UMLF loan

successfully launch her craft pattern

applicants. They're all hardworking, capable

business. UMLF's loan also increased

individuals, unwilling to be victimized by

Marjorie's potential for expanding her six­

the ir circumstances, yet unable to obtain

person business. Whether launching a

conventional financing.

cottage industry such as Marjorie's or
advancing a line of credit for a fast -growing

UMLF is one of a growing number of Twelfth

start-up, multi-bank consortia such as UMLF

District multi-bank lending consortia

are successfully bridging the lending gap to

organized to fill this gap. Twenty-two

bring jobs back into our Twelfth District

financial institutions loaned $500,000 to

communities.

fund UMLF's initial loan pool. Other publici
private partners joined these institutions to

For most women participating in the Coali­

help finance a loan loss reserve fund . Fifty

tion for Womens' Economic Development

percent of each lender's share of a UMLF

(CWED) microlending program, the chance to

loan is guaranteed through the loan loss

pursue self-employment is a necessity, not

reserve fund to provide an additional risk

an option. CWED is a Twelfth District non­

buffer beyond the lender's participation in

profit community microlending program that

the loan pool.

targets low-income women. Founded in 1988
in response to the alarming increase in

Although UMLF does not require borrowers

poverty rates among women and children in

to have collateral, invest capital or even

the Los Angeles region, CWED's program

have a spotless credit history, they must be

provides business training, technical

able to demonstrate their abilities through a

assistance, and financ ing to low-income

well-conceived business plan. UMLF's credit

women who want to become self-sufficient

committee, composed primarily of bankers

through self-employment. CWED is modeled

and small business owners , reviews and

after successful microlending programs which

considers each loan application . Borrowers

have their roots in Latin America,

receive a maximum of $10 ,000.

Bangladesh, and India where self-employ­
ment programs have substantially

A central element of UMLF's program is

empowered women and increased their

mandatory attendance by each borrower in a

incomes. While women are the primary
11

participants in the program, CWED began

Loan Fund, by providing technical assistance

offering assistance to men in 1992 .

and training on credit management and
small business development to program

CWED's technical assistance programs -­

parti cipants, and through volunteering on

offered in Spanish and English -- include

CWED's advisory committee.

"hands-on" micro -business workshops
focusing on fundamental business skills and

For CWED borrowers, a small loan can make

developing a business plan.

a big difference -- the prospect for a

Once cert ified

through attending workshops and operating

doubling of income with the purchase of a

a micro -business for six months, program

street vendor's cart approved by the county

participants may join a Solidarity Circle to

health department, the opportunity to

receive a loan from CWED's Revolving Loan

become a licensed family daycare provider or

Fund.

the chance to expand a catering service
based on a sound business plan.

CWED and

Solidarity Circles are peer-lending and

programs like it in the Twelfth District do not

support groups of five start-up entrepreneurs.

pretend to offer an easy solution to

Circles help engender success because of the

revitalizing our urban and rural communities.

way they are organized. Loans are extended

Although not the answer for all women,

within the group two at a time, with group

self-employment can offer a hand up from

consensus determining the order of the loan

poverty for those who have the motivation

recipients. If someone is late with a payment

and drive to try to beat the odds to achieve

or defaults on a loan, it is the responsibility

financial independence.

of the circle members to cover the late
payment and/or the full amount of the loan.
Circles also provide the entrepreneurs with
much-needed support and sharing of
expertise as they nurture their businesses.
When a circle loan is paid, many women opt
to apply for a second loan either through the
circle or through CWED's individual loan
program. Some of the business owners
move on to become " bankable" in more
conventional credit markets to further expand
their businesses.
CWED's Revolving Loan Fund is capitalized
through grants and loans from various
private and public sou rces. Loans for start-up
microenterprises range from $500 to $5,000
while loans for existing microbusinesses
range from $5 ,001 to $25,000. Banks can
contribute to CWED in a number of ways -­
through direct contributions to the Revolv ing

The Role of the Federal Reserve and Community Affairs
"To exclude segments of our society from fundamental economic opportunities, such as
business or home ownership, is to rob our institutions and our economy of growth
potentia1."
-lohn P. LaWare, member, Federal Reserve Board of Governors

Community Affairs Staff, headed by
Assistant Vice President Kelly Walsh.
Seated, C. Jane Shock and Kelly Walsh.
Standing, from left, John Byrd,
H. Fred M endez and June Yambao.

The Federal Reserve is charged with examin­

increased dramatically with the heightened

ing state banks, that are members of the

public interest in CRA resulting from the

Federa l Reserve System, for compliance with

public disclosure of CRA evaluations.

CRA. CRA also mandates the Federal

Demand for guidance also has grown

Reserve to "encourage" institutions to meet

markedly as the scarcity of public funding for

the local credit needs of all segments of

community development has put increasing

their communities .

pressure on financial institutions to meet
these needs.

In 1981, to fulfill this role, the Federal
Reserve's Board of Governors established a

The Twelfth District's Community Affairs

Community Affairs Department in each of the

Department sponsors numerous conferences

12 Reserve Banks to provide financial

and regional seminars, including an annual

institutions with guidance and information on

CRA conference, to help educate bankers

CRA-related issues. This advisory role

and community development profess ionals.

13

Another workshop targeting bank directors

Act (FHA) . To provide technical assistance in

and executive offi cers provides guidance and

th is area, our Community Affairs Depart ment

training on the top-down approach to manag­

sponsors fair lending workshops throughout

ing a CRA program .

the Dist rict. The w orkshops cove r th e ten
recommended guidelines for fair lend ing th at

CRA is one of four interrelated fair lending

are incl uded in the Federal Reserve

laws. To comply wit h CRA, banks often must

pu blicat ion, "Clo sing the Gap."

also meet the requirem ents of the other fair

atten dees also hear from bankers who have

lendi ng laws w hich include: the Home Mort­

esta blished successful fair len ding programs.

Seminar

gage Disclosure Act (HMDA), the Equal Credit
Opportunity Act (ECOA), and the Fair Housing

El ~~'~~:

Tk~'~~ '7)~
J.~~

--",- - ,,,,",",,,,,,,--,,,,,--=

T

he Ca liforn ia Community Reinvestment Corporation (CCRC) has helped
El Sueno lmposible -- decent affordable housing -- become a reality for
hundreds of very low-income families across California. Th e driving force
behind this monumental effort is the Civic Center Barrio Housing Corporation, a
San ta Ana-based nonprofit community housing organization which rose up in
response to the displacement of 400 of these families from a Santa Ana barrio.
Founded in 1977, the organization has grown from developing a few dozen hous­
ing units concentrated in southern California to over 1200 affordable housin g
locations across the state since its partnership with CCRC in 1989.
CCRC strong ly believes in the soundness of Civic Center's grassroots organizing
approach which empowers residents, giving them a vested interest in their new
homes an d communities. This empow erment has a spill-over effect, launching
education, employm ent, childcare, and other revitalization endeavors. Along with
contributing permanent, long-term mort gage financing for affordable apartment
complexes, CCRC has helped Civic Center form partnerships with housing devel­
opers and investors to provide financial backing for economic development projects
such as childcare facilities and job training. Civic Center hasn't stopped dreaming.
Future plans include forming an economic developm ent corporation to launch
small businesses in very low-income communities across the state.
14

Providing this kind of training is critical in

agencies, the Twelfth District also publishes

light of recent HMDA amendments that

a newsletter to fulfill this important role.

require lenders to report the gender, race,

Distributed quarterly, "Community

and income level of all home mortgage

Investments" serves as an information

applicants. Previously, lenders were only

network for showcasing premier community

required to report the number, dollar

reinvestment projects that have been

amount, and location of mortgage loans they

implemented through local public/private

made each year. As reported widely by the

partnerships. Bankers and community

news media, HMDA disclosures often have

groups often use these premier projects as

shown disparate lending patterns along racial

models for their own CRA partnership efforts.

lines. These disclosures have triggered

"Community Investments" also provides

strong responses from community groups -­

updated information and training on CRA

and by the banking industry itself -- seeking

and fair lending-related issues .

ways to eliminate disparate lending patterns.
To help banks identify prospective
To encourage economic development, the

community investment opportunities and

Twelfth District's Community Affairs

local community groups to work with, Com­

Department cosponsors workshops with

munity Affairs publishes Community Needs

community development groups to target

Assessment profiles of cities and

specific communities and populations. One

communities within the Twelfth District. The

such workshop, "Increasing Lending on

profiles provide a review and analysis of the

Indian Reservations Through the Use of

economic conditions and demographic

Credit Enhancements," is organized in

characteristics of the profiled community.

conjunction with the Institute for American

They also contain a detailed description of

Indian Entrepreneurial Education and the

affordable housing and economic develop­

Federal Reserve Bank of Kansas City. This

ment organizations and public sector

hands-on workshop is designed to help

agencies that are available for lender

institutions address unmet credit needs on

participation in meeting CRA obligations and

reservations. Historically, even though viable

community credit needs. To date, Community

investment opportunities exist , reservations

Needs Assessment profiles have been

have had limited access to capital due to the

produced for ten major cities within the

scarcity of local financial institutions. Banks

Twelfth District. The profile for the South

also have been reluctant to provide small

Central Los Angeles

business and affordable housing financing to

direct response to the civil disturbances that

reservations because of unfamiliarity with

occurred in the area in 1992.

region was compiled in

tribal laws and court systems.
One of our Community Affairs Department's
most important roles is serving as a catalyst

BANKINCj ON OVR
COMMVNITIES

in the formation of partnerships. While
Community Affairs conferences provide many

The concept of public/private participation at

opportunities for bankers to meet with

the local level is an inherent element of the

community organizations and government

regional structure of the Federal Reserve
15

WHAT 15 THE DEVELOPMENT FliND'

T

he Development Fund is a San Francisco-based national leader in the develop­
ment of innovative model financing programs to support affordable housing and
community economic development for low- and moderate- income communities.
Founded in 1963, the Development Fund is one of the oldest nonprofit affordable
housing and community development support organizations in the nation.

The Development Fund's pioneering model programs include the concept of the com­
munity reinvestment corporation (CRC), a large-scale financing program for affordable
housing development, and the Reverse Annuity Mortgage Program (RAM), which is
designed to help low- and moderate- income older adults borrow against the equity in
their homes. The Development Fund works with various public/private partners and
financial institutions to design and create the model programs and to demonstrate their
effectiveness. Once established, the programs are then transferred to other nonprofit
organizations for long-term management.
The Development Fund's RAM model program has been extensively replicated in
many states. This home equity conversion program allows older adults -- who often
struggle to meet expenses while living on fixed incomes -- to increase their monthly
income by borrowing against the equity in their homes.
John Trauth, Executive Director of the Development Fund, originally conceived the
CRC concept as a practical strategy to address both the critical need for affordable hous­
ing and the limitations banks face in financing these types of complex projects. A CRC
is a nonprofit multi-bank lending consortium specifically formulated to provide long­
term mortgage financing for multi-family affordable housing developments. Joining a
CRC allows banks to pool funds and share risk so they can safely participate in financ­
ing affordable housing projects and meet their Community Reinvestment Act (CRA)
obligations at the same time. Many banks are unable to independently underwrite
long-term mortgage loans due to their higher degree of interest rate risk.
Beginning in 1989, the Development Fund worked in partnership with the Federal
Reserve Bank of San Francisco to create the California Community Reinvestment
Corporation (CCRC) which has served as a model to establish CRCs in four other
Twelfth District states -- Hawaii (1990), Washington (1991), Nevada (199£), and
Idaho (1993). Two CRCs have been created in Rorida based on the CCRC prototype.
To meet the critical need for financing community and small business development, the
Development Fund and 5£ California banks are creating the Community Economic
Development Lending Initiative (CEDLI) which is being launched in partnership with
the Federal Reserve Bank of San Francisco. CEDLI also may serve as a model for other
states striving to expand the role of private capital in community development activities.

16

System and the unique role played by each

and moderate- income families.

Federal Reserve Banks' boards of directors.
As with all Federal Reserve Banks, the

The Twelfth District's Community Affairs

composition of the Twelfth District Bank 's

Department plays a role in building local

five boards of directors -- at its San Francisco

CRA partnerships through its active

head office and four branches -- extends

participation in the formation of statewide

beyond banking to include representation

multi-bank lending consortia. In 1989, our

from the business, agricultural, and

Community Affairs Department joined forces

community sectors. Directors playa key role

with The Development Fund to form the

in the formulation of monetary policy by

California Community Reinvestment

providing an assessment of the current

Corporation (CCRC). CCRC, a nonprofit

economic and financial conditions shaping

mortgage banking corporation, is a

our region.

consortium of 58 California banks which pool

Board member representives

from community economic development

funds to provide permanent, fixed rate, long­

organizations also help keep our Bank's

term loans for affordable, low-income, multi­

executive and community affairs staff

family rental housing projects throughout the

apprised of community development issues.

state of California. To date, CCRe's revolving
loan pool of over $200 million has enabled

Currently, there are three Twelfth District

community developers to finance 44 housing

board members rep resenting commun ity

projects throughout California. Thirty-two of

economic development corporations. Anita E.

the 44 CCRC loans have either been sold or

Landecker, Regional Vice President, Local

are in the process of being sold on the

Initiatives Support Corporation (L1SC), chairs

secondary mortgage market to allow CCRC to

our Los Angeles Branch Board.

replenish its pool and provide a revolving

L1SC is a

national nonprofit community development

source of funding for new projects.

support corporation -- the largest in the
nation -- that provides financing, training,

During 1993, our Community Affairs

and technical assistance to community-based

Department worked with The Development

developers undertaking affordable housing

Fund to plan the Community Economic

and economic development projects to revi­

Development Lending Initiative (CEDLI). Stil l

talize their neighborhoods. Cynthia A.

in its formative stages, CEDLI is targeted to

Parker, a member of our San Francisco Head

be a mu lti-bank lending consortium which

Office Board, is the Executive Director of

will provide loans to small businesses,

Anchorage Neighborhood Housing Services

minority-owned firms, and microbusiness

Inc. (NHS). Constance G. Hogland, Executive

enterprises in California communities that are

Director of Boise NHS, sits on our Salt Lake

unable to obtain credit in the traditional

City Branch Board. The Anchorage and Boise

credit market. CEDLI also will provide tech­

NHSs are locally-based community develop­

nical assistance to help borrowers success­

ment corporations (CDCs) that are affiliates

fully manage their businesses and meet their

of the NeighborWorks national network.

debt ob ligations. CEDLI's task force, which

These two CDCs form partners hips with

consists of California bankers and comm unity

financial institutions and are involved in the
production of affordable housing for low-

leaders, plans to work over the next year to
create and implement the lending program.
17

Management Committee
(From left)
Patrick K. Barron, First Vice President and Chief Operating Officer
Michael J. Murray, Senior Vice President, Administration
Robert T. Parry, President and Chief Executive Officer
Thomas D. Thomson, Executive Vice President, Central Bank Functions

18

of information to permit quick identi fication
of checks that must be returned unpaid.
This reduces the risk of loss to the deposit­
ing bank and its customers . The District also

OPERATIONS AND FINANCIAL
SERVICES

introduced a new check "truncation" service,
whereby our five offices wil l ret ain a paying
institution's checks and provide photocopies

Bank consolidation and regulatory change are

of any of its items on request. This service

altering the face of the financial services

eliminates check transportation and reduces

industry in the Twelfth Federal Reserve

check processing requirements considerably.

District and along w ith it, the kinds of
payments services financial institutions need .

To extend the benefits of electronic present­

In 1993 the Twelfth Dist rict met the challenge

ment to checks that paying institutions

to provide innovative and highly automated

receive directly from collecting institutions,

services by upgrading the automation infra­

our District developed a group of "present­

structure of our ope rations, int roducing

ment point" services . With the implementa­

several new services, and continuing to

tion of the Same-Day Settlement provisions

improve service quality, reliability and

of Regulation CC in January 1994, paying

efficiency.

banks are likely to see a significant increase
in the number of direct presentments
because "same-day settlement" gives collect­

CHECK SERVICES

ing banks the right to present checks directly
and receive payment the same day. Our

The changing needs of financial institutions

new " presentment po in t" services are

have had a tremendous impact on check

designed to help paying institutions manage

clearing services. Increasingly, institutions

this increase in direct presentments and

are demanding electronic services that speed

continue to take advantage of our payor

the flow of payment information and mini­

bank services by designating one of our

mize the number of times a check must be

Federal Reserve offices as an alternative

processed.

presentment point.

To promote the electron ic collection of checks

The Twelfth District also introduced an

and to meet this growing demand for elec­

electronic adjustment service in 1993. This

tronic services, the District added several new

service accelerates the resolution of errors by

products to its line of electronic "Payor

enabling institutions to initiate and track

Bank" services, including MICR-Link Plus.

adjustment cases electronically. The new

This electronic presentment service enables

service is available via direct computer

the paying financial institution to post

interface or Fedline -- an integrated, personal

cleared checks to its customers' accounts

computer-based software package that

directly from t ransm itted files contain ing the

provides access to a variety of Federal

payment information from the checks' "MICR"

Reserve services.

line. It decreases the amount of processing
the institution must do and speeds the flow
19

To support our product and service enhance­

depositing and receiving work. This new

ments and provide for more effective cost

system sets the stage for the eventual

control, we upgraded our check processing

System-wide consolidation and centralization

automation infrastructure. Also , our District

of ACH processing.

piloted a prototype medium -speed check
imaging system to explore ways to speed

During the year, all ACH support and pro­

collection and meet future check processing

cessing functions were consolidated at our

requirements through the capture, storage

San Francisco head office to increase produc­

and retrieval of digitized images of checks.

tivity and cost control. At the same time,
the District maintained very high levels of
customer service, including an on-time

ELECTRONIC PAYMENTS

delivery rate of 100 percent for both the
number and dollar value of ACH items.

A major initiative in electronic payments was
the successful transfer of computer process­

1993 also marked the conversion to the all­

ing for the Fedwire large-dollar funds transfer

electronic commercial ACH, which provides

system and the Book-Entry securities transfer

for faster and more reliable delivery of items.

system to a consolidated processing site in

To speed the return of unpaid items, more­

Richmond, VA. The move was the culmination

over, our District instituted a new automated

of months of tes ting -- to ensure that con­

voice response system which enables smaller

trols and performance would be acceptable

institutions to send information via touch­

in the new environment and that disaster

tone telephone. This voice response system

recovery capabilities were adequate.

significantly reduces costs and potential
errors for the institutions that had been

This effort was part of the first phase of a

using the paper-based return service .

Federal Reserve System plan to consolidate
all mainframe computer processing at three
sites -- East Rutherford, New Jersey; Rich­

FUNDS TRANSFER

mond, Virginia; and Dallas, Texas. Consolida­
tion will centralize the computer processing

For the seventh straight year, both full-day

operations of the Federal Reserve System 's

and critical hours availability for the Fedwire

key electronic payments services (including,
eventually, the ACH service), thereby improv­

service -- at 99.99 percent and 100 percent,
respectively -- exceeded service quality

ing reliability, expanding customer service

standards established for the Federal

capabilities and promoting greater efficiency.

Reserve System.
During the year our District continued to

A UTOMATED CLEAR/N Ci H OUSE

work closely with financial institutions to
improve their disaster recovery capabilities,

During the year, we implemented Fed ACH

including the security aspects of t hei r

'93, a new processing system that offers
financial institutions and their customers
greater flexibility and expanded hours for

contingency arrangements. To assist finan­

20

cial institutions during crises, we developed
a database conta ining each institution's

recovery plans and worked with them to test

CASH SERVICES

their capabilities.
As part of a multi-year plan to upgrade Cash
Services automation, our District undertook

SECURITIES AND FISCAL SERVICES

three major initiatives in 1993.

Successful

implementation of the Cash Automation
A major milestone for Securities Services in

System, an advanced system to integrate

1993 was the successFul implementation

cash ordering, operating and accounting

of TMPS, the new Treasury securities

functions, was a key part of this plan.

automated auction processing system for

This system automates all aspects of cash

primary government securities dealers. By

operations, including balancing and

combining on-line, automated access to the

reporting, to provide for more effective

auction process with back-end processing of

control and more efficient operations.

orders, this new system speeds the auction
process while reducing errors and improving

Along with the implementation of the Cash

monitoring capabilities.

Automation System, we also enhanced the
cash services module of Fedline to include

1993 also marked the beginning phases of

deposit notification and updated cash order­

the transfer of the Twelfth District's Savings

ing functions. For institutions that do not

Bond operations to the Federal Reserve Bank

have Fedline access, the District introduced

of Kansas City, one of five new regional

FedFone, an automated voice response

Savings Bond processing sites.

system that enables them to order cash and

The eventual

transfer of all Federal Reserve Savings Bond

send inFormation quickly and efficiently.

operations to one of these sites will reduce
costs and enhance operating efficiencies in

The Material Handling System, an automated

the System's fiscal agency services .

storage and retrieval system for container­
ized valuables, that will be installed in our

Providing high-quality customer service

two largest offices -- Los Angeles and San

continued to be a priority in 1993. To

Francisco -- in 1994, also was completed

expedite our response to requests and

during the year. This system will improve

questions from depository institutions and

operating efficiency by interfacing with the

the public, we established a special customer

Cash Automation System and providing

service unit in our San Francisco office.

state-of-the-art inventory management,

Equipped with computerized databases and

automated vault operations, and expanded

automated processing systems, this new unit

vault capacity.

is capable of quickly handling and tracking
any aspect of financial institutions' and the

Finally, as part of a System-wide, multi-year

public's fiscal agency transactions.

plan to upgrade currency processing equip­
ment, the District began installing new,
second-generation machines during 1993.
These machines will increase currency
throughput, enhance counterfeit detection
capabilities, and, because they will be linked
21

to the Cash Automation System, provide for

this year, including programs on the func­

more effective monitoring of deposit quality.

tions of the National Information Center
banking database, new Daylight Overdraft
requirements, and an educational program

PUBLIC INFORMATION

about money for grade school audiences.

Media outreach efforts focused on expanding

A record number of eight Money and Bank­

awareness and understanding of the Federal

ing workshops were held for teachers,

Reserve System and banking and economic

including the first ever held in Alaska and

developments in our region.

Hawaii.

A comprehen­

Educational programs and products

sive media visitation program -- including

were strengthened through the introduction

newspapers, business journals, wire services,

of a newsletter for teachers produced in

and television and radio stations -- was

cooperation with state councils on econom­

conducted in Idaho, Oregon and western

ics education in our District. "What is

Washington . Bank senior management held

Money?" a computer-animated video and

news briefings with editors and reporters

high school curriculum unit, was completed

from various newspapers. The Bank

for free distribution to schools nat ionwide.

president held briefings and provided

New Monetary and Fiscal Policy computer

economic analyses following speeches in

simulations and teacher materials also were

Boise, San Diego, Portland and Salt Lake

completed during 1993 for free distribution.

City.
Community reinvestment was spotlighted in

ECONOMIC RESEARCH

the Los Angeles region through the branch's
role in organizing press and media coverage

Economic Research focused on important

for the newly formed Southern California

topics relevant to Federal Reserve monetary,

Business Development Corporation -- the

regulatory, and regional policy analyses

first multibank community development

during 1993 and in the years ahead. For

corporation established in L.A. Coverage

example, macroeconomic studies examined

also heightened overall awareness of

issues such as the effectiveness of various

Community Reinvestment Act (CRA) programs

Monetary Policy indicators, business cycle

and requirements.

behavior in the U.s., and output losses
associated with the Fed's efforts to reduce

In December 1993, Fed-in-Print, the index to

inflation. Banking studies looked at deposit

Federal Reserve System economic publica­

insurance reform , bank capital regulatory

tions became available on the Internet. This

issues, fair lending laws, problem real estate

is the result of efforts by the Research Library

loans, and the role of banks in short-term

working together with other Reserve Bank

lending. Regional analyses focused on water

libraries to enhance public access to Federal

policies and income dispersion in the U.S.

Reserve economic research.

while research on our District economy took
a look at western mining, the defense and

The Audiovisual staff produced several major
System, District and other agency projects

22

aerospace industries, and the spill-over

western states.

SVPERV ISIO N , REqVLATION,
AND CREDIT

Our Center for Pacific Basin Monetary and

During the year, Reserve Bank examiners

Economic Studies continued its role in pro ­

conducted a total of 63 examinations of

moting central bank cooperation across the

commercial banks. Weakening fi nancial

Pacific Basin and enha ncing pub lic awareness

conditions prompted for mal superviso ry

of t he region' s mo netary and econom ic po licy

acti ons against four ban ks, informal actions

issues through its net work of internat ional

against six banks, and the assessment of

researchers, international conferences, sta ff

civil money penalties against one bank .

research, and pub lications. 1993 Pacific

Supervisory acti ons est ablis hed against two

Basin research included studies wh ich exam­

banks in previo us years were li ft ed while

ined monetary and exchange rate po li cies in

another action was upgraded from a fo rmal

Japan, Korea, Taiwan, and Australia. The

to an informal action because of significantly

Center's research is published in t he Pacific

improved conditions.

effects of the California economy on other

Basin Research Abstracts and the Center
Working Paper Series. Other international

The San Francisco Reserve Bank continued

research focused on international capital

to actively counter the impact of the weak­

mobility and current account imbalances.

ened Ca lifornia economy on the Twelfth
District banking industry as a whole. All

Public awareness of relevant policy issues

bank holding com panies (BHCs) in the

and economic developments was heightened

Dist rict were mo nit ored regu larly and any

through the dissemination of current Re­

deteriorating trends were prompt ly reviewed

search publications incl uding the Week ly

with supervisory action t aken, if necessary.

Letter which analyzes topical economic issues

Eighty-eight corrective action plans, of

and is widely distributed among the general

varying degrees of severity, were issued to

public as well as business and academic

holdin g companies in 1993 -- an increase of

readers.

30 since year-end 1992. The substantial

Regional data and information

covering economic developments in the

increase in this area largely reflects the

Twe lfth District states was conveyed through

diffi culties faced by some California holding

Western Economic Developments, published

companies, particularly in the southern

twice quarterly.

Fedviews, a monthly video

portion of the state whe re econ omic

program, updated current issues and the

conditions have been mo re adverse and

economic outlook using an interview format.

prolonged.

Public outreach efforts also included 68

At year-end, domestic app lication fi lings

speeches t o community and business

totaled 211 -- an increase of almost 50

groups within the District. Add itio nally, staff

percent fro m the 143 fil ings durin g 1992.

economists contribute d their expertise at

Appli cat ions to form bank holding companies

Money and Banking Wor kshops held for

and for membership in the Federal Reserve

educators t hroughout t he Dist rict.

System accoun ted for a majo r port ion of the
increase. As a result of applications

23

approved, we extended our supervisory

examination tools to determine whether or

purview over 20 new banks and three

not banks are meeting their fair lending

nonbanking companies .

obligations. Of particular note was the San
Francisco Compliance Unit's role in spear­

There were 148 agencies and branches of

heading a three-day Interagency Lending

foreign banks, 23 Edge corporation offices,

Discrimination Seminar for examiners from all

and 45 representative offices in our District

four federal regulatory agencies. This

by year-end 1993. Of these , the International

seminar will be used as a model for

Unit examined 94 agencies and branches, l6

developing discrimination analysis training

Edge Act offices and all 45 representative

for compliance examiners throughout the

offices. Supervisory actions were levied

Federal Reserve System.

against 8 institutions which included one
written agreement and one cease and desist

During 1993, 62 depository institutions

order. International applications totaled eight

borrowed from the discount window

in 1993 compared to 19 filings during 1992.

compared to 78 institutions during 1992. A

The substantial difference resulted from the

total of 470 loans were extended du ring th e

passage of the Foreign Bank Supervision

year compared to 910 in 1992, with most

Enhancement Act of 1991 which prompted a

institutions borrowing on an overnight basis

large number of filings immediately following

for temporary adjustment needs.

its passage.

held $27 .9 billion in collateral accounts at

Our Bank

year-end . Credit staff continue to be
Our Compliance exam iners continue to

extens ively involved in a wide range of risk

operate in an expanding, dynamic regulatory

managment programs designed to quickly

environment.

identify and alleviate our Bank's exposure to

Significant accomplishments

included the development of a new training
guide designed to assist examiners in
monitoring banks for compliance with REG
DD, the new regulation which imp lements the
Truth in Savings Act. Fair lending practices,
especially related to the Home Mortgage
Disclosure Act (HMDA) and the Community
Reinvestment Act (CRA) , remain a major focus
of compliance efforts. To active ly address
these areas, compliance examiners
participated in numerous fair lending training
programs and developed enhanced

24

excessive risk and potential loss.

Branch Operations
Seated, E. Ronald Liggett,
Senior V ice President,
Northern Region
Standing, from left,
O ordon R.(j. W erkema,
Senior Vice President, Seattle,
and A ndrea P. Wolcott,
Vice President, Salt Lake City.
John F. M oore, Senior Vice
President, Los A ngeles, was
not ava ilable for the photogra ph.

Volume (in thousands)

1991

199 2

1993

3,599,575
436,226

3,758 ,533
604,544

4, 069,9 35
65 1.348

2,902
216
686

3.0 24
150
766

3,02 6
113
702

3, 027,6 85
78,0 13
33,221

2,97 8 ,582
7 6 ,7 81
33.49 6

2,994,5 7 2
73,64 8
3 2. 709

18.245
345 ,458

19.4 16
380 ,44 8

19,9 62
406. 220

866
97

9 10
78

48 3
64

Custody Services
Cash Services
Currency notes paid into circulation
Food stamp coupons processed
Securities Services
Savings Bonds original issues
Other Treasury original issues
Book-Entry securit ies processed

Payments Services
Check Services
Commercial checks collected
Government checks processed
Return items processed
Electronic payments services
Wire transfers processed
Automated clearinghouse transactions processed

Discounts and Advances
Total discounts and advances*
Number of financial institutions accommodated*
* Whole number (not in tho usands)

25

F~~t-WW~g~~~ S~F~
g~~lJ~1)~M
Chairman of the Board and
Federal Reserve Agent
James A. Vohs
Chairman and CEO (Retired)
Kaiser Foundation
Health Plan, Inc. and
Kaiser Foundation Hospitals
Oakland, California

Carl J. Schmitt
Chairman and CEO
Vniversity National
Bank & Trust Company
Palo Alto, California

William E. B. Siart
President
First Interstate Bancorp
Los Angeles, California

Deputy Chair
Judith M. Runstad
Partner
Foster, Pepper s Shefelman
Seattle, Washington

E. Kay Stepp
Fonner President and
Chief Operating Officer
Portland General Electric
Portland, Oregon

Gary (j. Michael

Chainnan and CEO
Albertson's, Inc.
Boise, Idaho

William L. Tooley
Chairman

Tooley & Company,
Investment Builders
Los Angeles, California

Richard L. Mount
Chairman. President and CEO
Saratoga Bancorp
Saratoga, California

***
. Cynthia A. Parker
Executive Director
Anchorage Neighborhood
Housing Services, Inc.
Anchorage, Alaska

26

Federal Advisory Council
President and Twelfth
District Member
Richard M. Rosenberg
Chairman and CEO
Bank of America
San Francisco, California

fA,4A~g~

gi)~ i)~ 1)~M
Chair of the Board
Anita E. Landecker
Western Regional
Vice President
Local Initiatives
Support Corporation
Los Angeles, California

William S. Randall
CEO, Southwest Region
First Interstate Bank
Phoenix, Arizona

Anne L. Evans
Chairman
Evans Hotels
San Diego, California

Steven R. Sensenbach
President and CEO
Vineyard National Bank
Rancho Cucamonga,
California

Antonia Hernandez
President
and General Counsel
Mexican American
Legal Defenseand
Educational Fund
Los Angeles, California

Thomas L. Stevens, Jr.
President
Los Angeles Trade­
Technical College
Los Angeles, California

David L. Moore
President
Western Growers Assn .
Irvine, California

27

p~~, .g~

gI1Mi.fJ~ 7)~M
Chairman of the Board
William A, Hilliard
Editor
The Oregonian
Portland, Oregon

. (jerry B, Cameron
• Vice Chairman and CEO
. v.s. Bancorp
Portland, Oregon

Stuart H . Compton
Chairman
PioneerTrust Bank, N.A.
Salem, Oregon

Cecil W. Drinkward
President and CEO
Hoffman Corporation
Portland, Oregon

28

Elizabeth K. Johnson
President
TransWestem, Inc.
. Scappoose, Oregon

Ross R. Runkel
Professor of Law
Willamelte Vniversity
Salem, Oregon

Carol A . Whipple
Owner/Manager
Rocking C Ranch
Elkton, Oregon

SJ:t~C~E~
El1~;~1)~M
Chairman of the Board
Gerald R. Sherratt
President
Southern Utah University
Cedar City, Utah

Nancy Mortensen
Vice President-Marketing
Zions Cooperative
Mercantile Institution
Salt Lake City, Vtah

Richard E. Davis
President and CEO
Salt Lake Convention
s Visitors Bureau
Salt Lake City, Vtah

Daniel R. Nelson
Chairman and CEO
West One Bancorp
Boise, Idaho

Constance Ct. H ogland
Executive Director
Boise N eighborhood Housing
Services, Inc.
Boise, Idaho

Roy C. Nelson
President
Bank of Utah
Ogden, Utah

June M. Morris
Chief Executive Officer
Morris Air Corporation
Salt Lake City, Utah

/
,

.;

:/
..
~

29

Seatle, g~

« <

<

gl1~ 11~ 1)~M
Chairman of the Board
George F. Russell, Jr.
Chairman
Frank Russell Company
Tacoma, Washington

IG_~:--' Emilie A. Adams
President and CEO
Better Business Bureau
Foundation
Seattle, Washington

Thomas E. Cleveland
Chairman and CEO
Enterprise Bank of Bellevue
Bellevue, Washington

Tomio Moriguchi
President
Vwajimaya, Inc.
Seattle, Washington

30

Constance L. Proctor
Partner
Alston, Courtnage, MacAulay
& Proctor
Seattle, Washington

John V Rindlaub
Chairman and CEO
Seafirst Corporation
Seattle, Washington

William R. Wiley
Senior Vice President,
Battelle Memorial Institute; Director
Battelle/Pacific Northwest Division;
and Director, V.s . Department of
Energy, Pacific Northwest Laboratory
Richland, Washington

Chairman
Donald Butler
Chairman
Agrolink Corp.
Tucson, Arizona
Vice Chairman
David Nimkin
Executive Director
Utah Small Business
Development Center
Salt Lake City, Utah
Bailey S. Barnard
President
Heller First Capital Corp.
San Francisco, California
Barry Baszile
President
Baszile Metals Service
Los Angeles, California
Karla S. Chambers
Vice President
Stahlbush Island Farms, Inc.
Corvallis, Oregon
Robert D. Fay
Vice President and
Operations Manager
M s R Enterprise
Grandview, Washington

Nancy y. Learned
President
Learned-Mahn, Inc.
Boise, Idaho
Peter H. Parra
Executive Director
Employers' Training Resource
Bakersfield, California
Walter F. Payne, Jr.
President and Chief Executive Officer
Blue Diamond Growers
Sacramento, California
Leslie Tang Schilling
President
L.TD.D., Inc.
San Francisco, California
Peter H . van Oppen
President and Chief Executive Officer
Interpoint
Redmond, Washington
Henry J. Voss
Secretary
California Department of
Food and Agriculture
Sacramento, California

31

c~~£- ~ ~~ · A~~
(Thousands of Dollars)
Assets

Decembe r 31,
1993

199 2

Gold certifi cat e account
Special draw in g right s cert ficat e account...
Ot her cash

.
.
.

1,39 2,000
9 04. 000
60. 625

1.299.000
9 0 4.000
97,7 68

Loans to depository insti t utions

.

0

69,000

Federal Agency obligations

.

54 1.5 12

616.150

Unit ed States Government securiti es:
Bills
Notes
Bonds

.
.
.

18.7 22.081
15.419,200
4. 619.77 5

16,141• 240
13.45 2,997
3.988 .47 8

Total Unit ed States Governme nt securit ies
Tot al loa ns and secur itie s

.
.

38,7 61,056
39.3 02,5 68

33. 582 ,7 15
34. 267 .86 5

Item s in pro cess of collect io n
Bank premises
Ope rati ng equi pment.

.
.
.

1,554,9 0 4
150•87 6
31.7 4 6

1.349. 22 6
14 6. 243
30.845

Other asset s:
Denom in at ed in foreign curre ncies
All ot her

.
.

3,295,07 2
862,84 4

2,7 2 3. 618
63 6, 3 2 5

Int erdist rict sett lement accou nt

.

(12.121.6 51)

2,133,707

Tota l assets

.

35.43 2 .9 8 4

43,5 88.597

Federal Reserve Not es

.

26,322,759

35,878 .38 4

Depo sit s:
Total depo sit ory in stitu tion s-reserve accounts
Foreign
Oth er deposi ts
Tota l deposits

.
.
.
.

6.7 9 0, 73 0
20.5 0 3
21.320
6.8 3 2.55 3

5.4 66, 39 2
17,597
5,866
5.4 89. 85 5

Deferred credit items
Other lia bil iti es

..
.

1.016.233
27 1•68 9

1.107,5 31
212,237

Tot al liabiliti es

..

34.443 ,234

4 2 •688.0 07

Liabilities

Capital Accounts
Capita l paid i n
Surplus

.
..

45 0•295
45 0•295

Total liabilit ies and capital accou nts

..

43,5 88,597

32

E~~ E~
(Thousands of Dollars)

December 31,

Current Earnings
Discounts and advances
United States Government securities
Foreign currencies
Income from services
All other

1993
.
..
.
.
.

Total current earnings

834
1,943,930
182,225
86,37 0
622

199 2
682

1,916,003
269,109
91,162
1,126
2,278,082

.

Current Expenses
Total current expenses
Less: reimbursement for certain fiscal agency
and other expenses
Net expenses
Cost of earnings credits
Current net earnings

..

190.474

182,321

..
.

15,584
174,890

15,121
167,200

.

19,800

21,243

..

2,0 19,29 1

2,089,639

Profit and Loss
Additions to current net earnings
Profit on prior period adjustments
Profit on sales of United States Government
securities (net)
Profit on foreign exchange transactions (net)
All other
Total additions

.
.
.
.

4,5 0 3
39,161
8,198
51,862

13,353

Deductions from current net earnings
Loss on sales of United States Government
securities (net)
Loss on foreign exchange transactions (net)
All other
Total deductions

.
..
.
.

0
61,817
61,817

136,565
283
136,848

Net additions (+) or deductions (-)

..

0,955)

(123.495)

Cost of unreimbursed Treasury services

..

(4,260)

(4,099)

(20,69 2)
(44,506)

(16.4 23)
(36,604)

Assessments by Board of Governors
Board expenditures
Federal Reserve currency costs
Net earnings before payments to the
United States Treasury
Dividends paid
Payments to the United States Treasury
(interest on Federal Reserve Notes)
Transferred to surplus
Surplus, January 1.
Surplus, December 31

.

.
.

5

.
.

1,939,87 8
28,75 8

1,909,018
23,04 2

.

1,866,540

1,77 1,329

.

44,580
450,295
494,875

114,647
335,648
45 0,295

..

..

33

Robert T. Parry
Presid ent and
Chie f Execut ive Offi cer
Pat rick K. Barro n
First Vice Preside nt
and
Chie f Opera t ing Office r

Centra l Ba nk Fu ncti o n s
Thom as D. Thomson
Executive Vice President
Cent ral Bank Funct ions

Eco n omi c Rese ar ch
Jack H. Beebe
Senior Vice President
and Director of Research
John P. Judd
Vice Presid en t and
Asso ciat e Directo r of
Resea rch
Frede rick T. Furlo ng
Vice Preside nt
Banki ng an d Regio nal
Studies
Reuven Glick
Assist ant Vice Preside nt
Internat io nal Stud ies
Adr ian W. Throop
Research Offi cer
Dom estic Macroeco nomi c
Studies
Bharat Treha n
Research Offi cer
Domest ic Macroeconomic
Studi es
Mark Levon ian
Research Office r
Banking and Regional
St udi es

Supervisio n , Regulation
an d Credi t
Euge ne A. Thom as
Senio r Vice President
Sup ervision, Regulation and
Credit
Merle S. Bor chert
Vice President
Ban k Exami nations

34

Terry S. Schwa kopf
Vice President
Banking Supervisio n
W. Gord o n Smit h
Vice Preside nt
Credit and Consumer
Affairs
Kenn eth R. Binni ng
Director
BHC and International
Regulation
Harold H. Blum
Dir ector
Banking and Trust
Supervision
Donald R. Lieb
Director
Cred it and Risk
Manage ment
Way ne L. Rickar ds
Director
Banki ng and Consu mer
Regulat io n
James M. Barn es
Assist ant Vice Preside nt
Multin ational, Regional
and Community Bank
Supervisi on , S.F.
Richard S. Campos
Assistant Vice Preside nt
BHC Supervis ion
Rober t e. Johnson
Assistant Vice President
Regional and Commun ity
Bank Supe rvisio n, L.A.
Thomas P. McGrath
Assistant Vice President
Regional and Commun ity
Ban k Supervision , S.L.e.
Phi lip M. Ryan
Assista nt Vice Preside nt
Inte rnational Supe rvision
W. Starr Seegm ille r
Assistant Vice Presid ent
Trust
Kelly K. Walsh
Assi stant Vice President
Community Affairs
David M. Vandre
Assistant Vice President
District Compliance and
Special Exam inat ions

Thomas J. Backer
Exami ni ng Officer
BHC Inspectio ns, L.A.
Rack Fukuh ara
Managi ng Offi cer
Supervision, Regulat io n and
Credi t
Lelia M. Jones
Exam ini ng Officer
Consumer Compl iance
Gary P. Palmer
Financial Analysi s Officer
G. Ross Varoz
Examining Officer
BHC Inspe ct ions, S.L.e.
Dale L. Vaughn
Exami ning Officer
Int erna tion al Exam inat ions,
L.A.
David W. Walker
Exami ni ng Offi cer
International Exam inat ions,
S.F.
George T. Westerman
Applications Offi cer

Law
Robert D. Mu lford
Vice President
and General Counsel
Doug las R. Shaw
Vice President
and Counsel
Kenneth M. Kinoshita
Associate General Counsel

Pub lic In for ma ti o n
Robert L. Fienbe rg
Vice Presi de nt and
Direct or of
Pub li c Info rmat io n

Om b u d sm an
Jane M. Waterman
Ombudsman

Adm inistration
Michael J. Murray
Senio r Vice Preside nt
Adm inist ratio n
e. Kenn et h Arno ld
Vice Preside nt
Dist rict Security
Elizabet h K. Christe nsen
Vice Preside nt
Corporate Planning and
Financial Control
William K. Gint er
Vice President
Building and Property
Man agement
Sall ie H. Weissinger
Vice President
Corporate Personne l
Susan G. Port erfiel d
Directo r
Comp ensation and Benefi ts
Sylvia A. Cunningham
Assis tant Vice President
Financial Planni ng and
Cont rol
Deborah S. Jackson-Duke
Assistant Vice President
Automa tion and Pay roll
James J. Tenge
Assistant Vice President
Ad min ist rativ e Services
Thom as R. Thaanum
Assista nt Vice President
Acco unt ing

Bank and Treasury
Services
John W. Gleaso n
Senio r Vice Preside nt
Bank and Treasury Services
Daw n S. Block
Assista nt Vice Preside nt
Cash Services
Susan A. Sut herland
Assista nt Vice Preside nt
Securities Services

Com p ute r Services and
Elect ro nic Pay m ents
Laurence Washtien
Senior Vice President
Computer Services and
Electronic Payments
Patrick Tong
Vice President
Computer Operations,
Network Support
Services, Data Security,
and Contingency Planning
Nancy Emerson
Director
Applicat ions Systems
John Y. C. Lin
Director
Systems and
Communicatio nS/FinanciaI
Administration
Paige Birdsall
Assistant Vice President
Electronic Payments
John S. Hsaio
Assistant Vice President
Applications Systems,
Mainframe Consolidatio n

Paym ent s and Su pport
Servic es
Sara K. Garrison
Senior Vice President
Payments and Suppo rt
Services
Barbara J. Contini
Vice President
Electronic Access
Patricia A. Welch
Vice President
Stat istics
Eliot E. Giuili
Director
Statistical Reports and
Reserves Admini strati on
Stephen A. Kaufman
Assistant Vice President
Adj ustment and Support
Services
Douglas O. Knudsen
Assistant Vice President
Business Development

Ellsworth E. Lund
Assistant Vice President
Technical Resources
and CALL/BHC Rep orts
Ga il G. Quarles
Assistant Vice President
Elect ronic Access
Beverly-Ann Hawkins
Automation Resou rces
Officer
Elizabeth M. O'Shea
Payments Services Officer

Secretary's Office
Elizabeth R. Masten
Vice President and
Secretary of t he Board
Audit
Vacant
General Auditor
Bruce H. Thompson
Director/Ass istant
General Audito r
Charles O. Bowden
Assistant Vice President
Southern Region
S. Jean Hinrichs
Assistant Vice President
Audit
Gary G. Hoeth
Assistant Vice Presiden t
Northern Region
Peter K. C. Hsieh
Assistant Vice President
Audit

D. Kerry Webb
Vice President and
Assistant Branch Manager
Mark W. Fishback
Director
Materials Handling System
Project
David C. Albo
Assistant Vice President
Cash Operations (CVCS)
and Shipping and Receiving
Darcy J. Coulter
Assistant Vice President
Cash Administ ration,
Securities
Services, End User
Computi ng
Brent M. Duxbury
Assistant Vice President
Admini strative Services
Robin A. Rockwood
Assistant Vice President
Business Development and
Elect ronic Product Support
Rachel A. Romero
Assistant Vice Pres ident
Payments Services
Mary T. Rector
Administrativ e Officer
Pers0 nneI/FP&C

Salt Lake City Bran ch
Andrea P. Wolcott
Vice President in Charge
and District Business
Development Coordinator
Gerald R. Dalling
Assistant Vice President
Administrative, Cash and
Securities Services
A. Kenneth Ridd
Assistant Vice President
Business Development,
Technical Services and
Public Information, Dist rict
Business Development
Product Manager
Jed W. Bodily
Payments Services Officer

Seatt le Branch
Gordon Werkema
Senior Vice President
in Charge and District
Product Coordinator for
Checks
Gale P. Ansell
Assistant Vice President
Branch Services

Northern Regio n Bra nch

Jimmy F. Kamada
Assistant Vice Pres ident
Cu stody Services

E. Ronald Liggett
Senior Vice President
Northern Regio n
and District Quality
Cont rol Coordinato r

Kenneth L. Peterson
Assistant Vice President
Payments Services and
Chairman, Check Officers
Group

Po rtl an d Branch
Bran ch Ope rati o ns
Los Angel es Branch

Dean C. Gonnerman
Assistant Vice Pres ident
Business Development
and Public Information

John F. Moore
Senio r Vice President
in Cha rge and District
Product Coordinato r
for Cash

Robert D. Long
Assistant Vice President
Branch and Custody
Services

Sean J. Rodriguez
Vice President
Administration

Mary E. Monroe
Assistant Vice Pres ident
Payments Services

35

.­

San Francisco Office
P.O. Box 7702
San Francisco, California 94120

Salt Lake City Branch
P.O. Box 30780
Salt Lake City, Vtah 84125

Los Angeles Branch
P.O. Box 2077, Terminal Annex
Los Angeles, California 90051

Seattle Branch
P.O. Box 3567, Terminal Annex
Seattle, Washington 98124

Portland Branch
P.O. Box 3436
Portland, Oregon 97208

This Report was produced by Karen Flamme and written by Lynden Beale with
contributions from Barbara Bennett, Corporate Planning. Design and illustra­
tion by William Rosenthal. Color photography by Paul Schulz.

36

Federal Reserve Bank of San Francisco
P.O. Box 7702
San Francisco, California 94120

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