Hawkins Point Visitors Center Massena, NY

Hawkins Point Visitors Center
Massena, NY
Headquartered in DeWitt, New York
Founded in 1866
Wholly‐owned banking subsidiary of Community Bank System, Inc. (CBSI). In Pennsylvania, Community Bank, N.A. operates as First Liberty Bank and Trust
The U.S. banking environment is very unique when compared to systems in Canada and most other countries.
Some of the factors which make the U.S. banking environment unique 1. Large number of depository financial institutions
7,350 commercial banks
1,265 thrift institutions (formerly known as savings and loans or mutual savings banks
over 8,000 credit unions 2. Lack of nationwide branching
about 10 years since banks were allowed to expand no banks that have a presence in all 50 states
a significant impact on large retailers
3. Significant usage of checks and mail‐
based payments.
In 2005 there were approximately 33 billion checks cleared in the U.S. for total value of $37.7 trillion
Table with breakout of transactions by volume and amount is provided below.
% of Total Types of Number % of Total $ Value (billions)
Non‐
Transactions (billions) Non‐Card
Card
Checks
33,070
71.8 %
$37,729,100
4.0 %
ACH
Wire
TOTAL NON‐
CARD
Card
12,796
204
TOTAL
27.8 %
0.4 %
$28,544,700
$868,417,300
46,070
$934,691,100
42,949
$2,645,500
89,019
$937,336,600
3.1 %
92.9 %
4. Restrictions on corporate checking accounts
It’s against current Federal Reserve regulations for banks to pay interest on corporate checking accounts or for banks to offer accounts denominated in currencies other than the dollar.
5. Unbundled pricing of banking service
Where each and every service or transaction is billed to the customer and reported in sometimes excruciating detail in an Account Analysis Statement.
6. Arms‐length relationships between banks and customers
limits on how much a bank can lend to any one customer
7. Involvement of a central bank (the Federal Reserve) in the processing of payments.
The Federal Reserve clears the majority of checks, owns and operates the major wire transfer system (FedWire), and acts as the operator for most of the ACH (Automated Clearing House) system
In an effort to increase the efficiency and effectiveness of the U.S. check clearing system, there have been some key developments in recent years, including:
1.Increasing efforts to convert checks to electronic payments (check conversion)
2.Development of standards for the creation and exchange of check images
3.Prevention techniques to reduce the high level of check fraud.
Small number of large banks that branch across the entire country Company will typically have only one primary banking relationship
The six largest Canadian banks are about three times larger than the six largest banks in the U.S.
 The six largest Canadian banks also represent about 90 percent of total bank assets versus only 51 percent for the U.S. banks
Canadian Banks
(6 largest – 2006)
Royal Bank of Canada
Assets 2006
(USD billions)
478
U.S. Banks
(6 largest – 2006)
Assets 2006
(USD billions)
Citibank
1,883
Toronto Dominion (TD) 350
Bank of America
1,460
Scotiabank
337
JPM Chase
1,352
Bank of Montreal
279
Wachovia
707
CIBC
271
Wells Fargo
482
National Bank of Canada 100
Washington Mutual
347
Total Assets
1,816
Total Assets
6,230
Total Bank Assets – All Banks
2,052
Total Bank Assets – All Banks 12,261
and Thrifts
% of Assets Held by Top 88.5 %
6 Banks
% of Assets Held by Top 6 Banks
50.8 %
Canadian GDP
1,161
U.S. GDP
13,153
Ratio of Assets to GDP
1.56
Ratio of Assets to GDP
0.47
Key Area
United States
Canada
Number of Banks
Over 8,500
Approx. 70
Nationwide Branching
Effectively Limited to Regions Full Nationwide
Interest Paid on Corporate NO
Checking Accounts
YES
Foreign Currency Accounts NO
YES
Number of Bank Many
Relationships per Company
One
Check Usage
Very High
Medium
Check Clearing Times
1‐3 Days
Same Day
Check Conversion Initiatives YES
Government Operation of Very High
Clearing System
“Unbundling of Banking YES
Services”
NO – Not Needed
Low
YES