National News

President nominates three to fill vacant Fed seats.Janet Yellen, president of the Federal Reserve Bank of San Francisco, has been nominated by President Obama to be vice chairman of the Federal Reserve Board. The president also nominated Sarah Bloom Raskin and Peter Diamond to open seats on the seven-person board. Raskin is the commissioner of financial regulation for Maryland, and Diamond is an economics professor at the Massachusetts Institute of Technology. Donald Kohn, the current vice chairman, previously announced he will step down June 23 after a 40-year career at the Fed. All three nominations are subject to Senate confirmation. In addition to Chairman Ben Bernanke, the other members of the board are: Elizabeth Duke, Kevin Warsh and Daniel Tarullo. .Reform legislation moving forward.Negotiations between Sen. Christopher Dodd (D-Conn.) and Sen. Richard Shelby (R-Ala.) led to an agreement to bring financial industry reform legislation to the Senate floor for debate. During the last week of April, Democrats came up short of the 60 votes needed to move the bill forward on three occasions. The bill requires large banks to pre-pay $50 billion to a fund that would cover the cost of winding down big banks that get into trouble. Some Republicans want the pre-funding requirement removed. Other contentious portions of the bill relate to the Consumer Financial Protection Agency, and the supervisory role of the Federal Reserve. The House passed financial industry reform legislation last December. A conference committee would be headed by Rep. Barney Frank (D-Mass.). .Bank brands suffering in customers' eyes.A survey by J.D. Powers and Associates finds the image of banks to be worse now than it was a year ago. The survey shows consumers think banks are more profit-driven than customer-driven, compared with 2009. In addition, the percentage of customers who say they "definitely will not" switch banks during the next 12 months has decreased to 34 percent, compared with 46 percent in the 2007 study. Customers of smaller banks were less likely to indicate a willingness to switch banks. Survey respondents said in-person service and personal attention are important factors in their level of satisfaction. Acquisition rates are improving at smaller banks, with new customers accounting for 8 percent of the customer base, compared with an industry average of 6 percent. Fees continue to have a major impact on loyalty, as 29 percent of customers who switched banks in the last year cited high fees as their reason for switching. .New $100 bill slated for release.The U.S. Treasury unveiled the new $100 bill on April 21. The first new bills will become available on Feb. 10, 2011. Currently, there are about 6.5 billion $100 bills in circulation, which will remain legal tender. The new bills feature a three-dimensional security ribbon, and a bell imprinted in the inkwell. These security features are intended to be easy for consumers and merchants to use to authenticate their currency. The new design for the $100 note retains three security features from the previous design: the portrait watermark of Benjamin Franklin, the security thread, and the color-shifting numeral 100. Although less than 1/100th of one percent of the value of all U.S. currency in circulation is reported counterfeit, the $100 note is the most widely circulated and most often counterfeited denomination outside the United States.