Banking Chief In Texas Urges Interstate Bill
Pushes for Legislation As Bank Losses Mount
Faced with mounting losses by energy lenders in his state, Texas Banking Commissioner James Sexton has asked Gov. Mark White to consider interstate banking legislation at a special session of the state's Legislature that will open the first week of August.
Mr. Sexton said Thursday that he is seeking interstate legislation in the hopes of injecting new capital into the state's troubled banking industry, which has been hit hard by falling oil prices.
"It would be helpful to have sources of capital other than local sources,' Mr. Sexton said in a telephone interview. "Those earnings losses and various other things--the LTV bankruptcy and the forecasted decline in oil prices--have meant that Texas bank shares are selling fairly low.'
Gov. White did not make any commitments to consider banking legislation during his half-hour meeting with Mr. Sexton. The governor initially called the unusual special legislative session to address a $2.3 billion state budget shortfall caused by sliding oil prices. Oil taxes account for a major shares of Texas government revenue.
On Thursday, Meg Wilson, Gov. White's banking aide, said the would consider the Sexton bill, and may sponsor it in the upcoming special session.
"The possibility of an emergency concerns us,' Ms. Wilson said. "If, in fact, it is a situation that needs immediate remedy, we may have the opportunity to fix it in our special session.'
That's a departure from the governor's previous position that the special session should be devoted exclusively to the state's budget problems.
Ms. Wilson said the governor was open to three options: "full interstate banking, joining a regional compact, and doing nothing.'
During the second quarter, Texas banks continued to suffer from low oil prices. BancTexas Group Inc. this week announced a loss of $8.6 million for the second quarter.
Mr. Sexton said "it is hard to assess' the impact on the banking industry of LTV Corp.'s decision last week to reorganize under Chapter 11 of the Bankruptcy Code. But he said, "It's one more piece of bad news.'
The failure last …