Illinois Committee Approves Reciprocal Interstate Proposal

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CHICAGO -- The Illinois House financial institutions committee has approved a proposal allowing reciprocal interstate banking. The House may vote on it next week.

Another House committee, however, has delayed from further consideration a proposal barring a Missouri-based bank holding company from acquiring any more banks in Illinois. General Bancshares Corp. of St. Louis so far has acquired eight Illinois banks under a grandfather clause in the Bank Holding Company Act.

The House rules committee this week kept the General Bancshares proposal in committee, thereby lessening the chances of its coming up for a floor vote in the full House.

The proposal, introduced by the Independent Community Banks in Illinois, is similar to one the association introduced in the last legislative session. That proposal was killed in the Senate banking committee.

This year's version also calls for establishing a legislative committee to study interstate banking. Interstate banking is "too big an issue, too important an issue not to be addressed by all interested parties," said Robert Wingert, executive director of the Illinois independent bankers group.

The Illinois Bankes Association, the largest banking trade association in the state, opposed the General Bancshares proposal on two grounds, said a spokesman. First, the Illinois BA has a self-imposed moratorium, in effect throughout this year, on issues dealing with bank structure. Second, the association prefers that bankers, not lawmakers, decide the interstate banking issue. Reciprocal Bill Allowed by 10-6 Vote

The reciprocal interstate banking proposal was approved by the House financial institutions committee on a 10-to-6 vote. …