Week in Review by Mark Sievewright Posted by AVCU on 9:49 AM

2010 bank failures reach 81 - Year-to-date bank failures rose to 81 last week with the closure of 3 institutions:

• TierOne Bank, Lincoln, Nebraska - $2.8 billion in assets
• First National Bank, Rosedale, Mississippi - $60 million in assets
• Arcola Homestead Savings Bank, Arcola, Illinois - $17 million in assets

G20 Fails to Agree on a Bank Tax, Calls for Joint 'Principles' - 20 nations failed to agree on a proposal to impose a global tax on banks that was aimed at making the financial industry shoulder the cost of bailouts, settling instead for a common set of guidelines. G-20 finance ministers and central bank governors said that governments will take account of each nation's "circumstances and options." The result allows nations such as Canada, China and Brazil - whose banks suffered less during the global financial crisis - to skip introducing a tax. European countries and the U.S. have advocated the levy.

Citigroup unit being revamped - Citigroup announced plans to close 330 branches of its consumer finance business as part of an overhaul aimed at finding a buyer for the unit. The branch closings at CitiFinancial will result in the Citigroup unit being split into two parts: one unit will offer personal, home equity and refinancing loans; the other will handle loan modifications and restructuring. CitiFinancial will be renamed after the reorganization is complete.
$5 billion credit union merger announced - The boards of the $3.5 billion Kinecta FCU and $1.2 billion NuVision FCU have announced their intent to merge into an institution that will serve 300,000 members in two Southern California counties. Kinecta will be the surviving institution. Although the two credit unions are just now beginning due diligence and have yet to file formal merger documents with NCUA, NuVision shares CEO Roger Ballard with Kinecta. Ballard took executive control of both institutions last week.

Credit unions join interchange battle - With the number of responses to the Credit Union National Association's (CUNA) call for grassroots interchange advocacy totaling over 150,000 as of Thursday night, credit unions and credit union leagues also are working to urge their federal lawmakers to block interchange language from the financial regulatory reform package. The House and Senate are currently working toward resolving differences between their respective versions of financial regulatory reform bills. The Senate bill proposes to allow government intervention in setting interchange fees, while the House bill has no interchange language.

Pending Sales of Existing U.S. Homes Climbed in April - The index of pending home sales rose 6% in April following a revised 7.1% gain in March, the National Association of Realtors reported last week. However, the plunge seen in mortgage applications in recent weeks signals a likely softening in subsequent months following the April 30 deadline to sign contracts and obtain as much as $8,000 in government assistance.

Car sales top forecasts - New-vehicle sales rose more than expected in May, as every major automaker except Toyota Motor reported increases of at least 17.5%. In contrast, Toyota's sales were up just 6.7%, another sign that the company was still struggling to overcome its recalls of more than eight million vehicles.

Services grow for fifth straight month - Service industries in the U.S. expanded for a fifth month and factory orders rose, pointing to a broadening economic recovery that's generating more jobs. The Institute for Supply Management's Index of non- manufacturing businesses, which makes up almost 90% of the economy, held at 55.4 for a third month in May. Readings above 50 signal expansion. Bookings at factories rose 1.2% in April, according to a Commerce Department report released last week.

Retail sales show slower growth - Sales at U.S. retailers grew in May at the slowest pace of the year, pointing to a deceleration in demand that may further restrain employment. Purchases increased 0.2% following a 0.4% April gain.