A second look at Oklahoma's new interstate banking law is needed, members of the Community Bankers Association o f Oklahoma said this week.
Citing the full interstate trigger which is effective July 1, 1987, and the law's reciprocity provision, association President Pat Flanagan said his group would meet with state legislators and regulators.
He also said the community bankers question the "failed and failing" provision and "right of first refusal" by Oklahoma banks.
"We want to visit with our regulators, and work with the Oklahoma legislative study committee, to work out solutions for the benefits of our customers, all banks in the state and banking regulators," he said.
The community bankers, whose membership consists of some 205 Oklahoma banks, discussed the issue at a summer planning conference in Vail, Colo., Flanagan said. About 70 members and guest speakers were in attendance.
Flanagan's remarks followed comments this week by Oklahoma Bank Commissioner Robert Y. Empie that the law is unusable in troubled bank situations where out-of-state bidders would be desirable.
Empie said the preferential bidding process discourages serious out-of-state buyers because they know Oklahoma banks will be given the opportunity to match a bid and top it.
Flanagan, who is also executive vice president at American Exchange Bank in Collinsville, said the interstate bill was passed "very hurriedly." He declined to give specific changes favored by the community bankers "until we know specifically what the goals of the legislators and regulators are."
He did say the association opposes allowing an out-of-state banking company to acquire an Oklahoma bank unless there is a reciprocal law which includes Oklahoma in that banking company's home state.
As it stands, the law allows emergency interstate acquisition of a failed or failing Oklahoma bank. If the acquiring bank's state does not have reciprocal legislation including Oklahoma, that banking company may not expand in Oklahoma for four years.
After the four-year moratorium, the bank could branch or acquire other institutions just the same as in-state banks.
Sources have speculated that nationwide interstate banking would be in effect before this provision would ever come into play.
But that limitation on expansion was intended to hasten reciprocity legislation by other states, said Laura Pringle, vice president and general counsel of the Oklahoma Bankers Association.
"The reason we have limitations on expansion is to encourage reciprociy," stressed Pringle, who had a hand in drafting the interstate bill. "What we want to do is retain the protections we have inplace, both dealing with in-state acquirers and with expansion by out-of-state acquirers."
Both Pringle and Robert E. Harris, executive vice president of the Oklahoma Bankers Association, have said the association opposes any modifications in the law.
Harris questioned the wisdom of working to change the law during the 1987 legislative session, since the full interstate trigger becomes effective in July.
Once the trigger is activated, the preferential bidding process for Oklahoma banking companies will be eliminated and they will be in open competition with out-of-state banks.
"If (Harris) is going to say there's not time, he's talking out of both sides of his mouth," Flanagan said. "They passed the original bill in a week. How does he explain the first one?"
The community …