Business briefs

Web posted November 13, 1998

Associated Press

State Farm bluring line between banking and insurance

WASHINGTON -- In a new erosion of the line between banking and insurance, regulators on Thursday gave insurance giant State Farm permission to operate a federal savings and loan after it mollified concerns about lending discrimination.

The move had been contested by several community groups, which expressed fears that State Farm might discriminate against low-income borrowers. The company in the past had been accused of discriminating against inner-city homeowners in underwriting insurance policies.

State Farm is the ninth insurance company to be granted a federal thrift charter in the past year or so. Approval by the federal Office of Thrift Supervision had been held up for a year partially because of the opposition from the community groups.

Privatizing Social Security faces hurdles

WASHINGTON -- Deciding what Social Security should look like may be the easy part: Actually setting up a new retirement system that includes personal accounts for all workers, as many lawmakers want, could take years and cost a bundle, according to a study.

``Privatizing Social Security even partially faces serious logistical hurdles,'' said Dallas Salisbury, president of the Employee Benefit Research Institute, which released the report Thursday.

Supporters of personal investment accounts say they're still the best option, however, and the problems can be overcome. The question of whether to let Americans invest for themselves some of the taxes they now contribute to Social Security will be a key sticking point as lawmakers discuss changes to strengthen the retirement program for millions of aging baby boomers.

Mortgage rates rise

WASHINGTON -- The average interest rate on 30-year fixed-rate mortgages rose for the third consecutive week to a three-month high of 6.93 percent this week, Freddie Mac, the mortgage company, said Thursday.

Five weeks ago, the average dipped to 6.49 percent, a 31-year low, as investors scared by global financial turmoil shifted money into the United States.

Still, the average has remained below 7 percent for 22 consecutive weeks. It reached 7.22 percent in late April, its peak for the year so far.

British Columbia is first Canadian province to sue tobacco companies

VANCOUVER, British Columbia -- British Columbia on Thursday became the first Canadian province to follow the example of U.S. states by suing tobacco companies to recover costs of health care related to smoking.

Provincial authorities did not specify the amount they would seek, but Attorney General Ujjal Dosanjh said it could run into the billions of dollars. The suit was filed against RJR-Macdonald, Imperial Tobacco and Rothmans, Benson and Hedges, which account for nearly all of the cigarettes produced in Canada.

The province paved the way for the lawsuit by implementing a package of new anti-smoking laws that authorize the government to recover tobacco-related health care costs. A spokesman for the association that represents the tobacco companies said the industry was taking legal action of its own challenging the legislation.

Euro will not take the dollar's place

NEW YORK -- Europe's new central bank won't try to contest the dollar's international dominance with its new euro currency, the bank's president said Thursday.

``There will be no deliberate policy of challenging the U.S. dollar,'' Wim Duisenberg said in the text of a speech to the Economic Club of New York.

The new central bank, he said, ``will accept the international role of the euro as it develops through market forces.'' Still, Duisenberg said the euro, which will be launched Jan. 1 in 11 of the 15 European Union nations, will be a major world currency.

Dow closes slightl higher

Oil stocks barely kept the Dow aloft Thursday, while the broad market sagged for a fourth straight day as Wall Street awaited next week's Federal Reserve meeting. The Dow Jones industrial average bobbed higher just before the close, ending a three-day losing streak but rising only 5.92 to 8,829.74.

Metal futures prices rise, coffee declines

Gold, silver, platinum and palladium futures prices rose sharply, while coffee futures continued to give back gains made as Hurricane Mitch battered Central America.