Interstate Banking Won't Kill Little Guys

Article excerpt

The big-bank bogeyman, personified by Nicholas Biddle in the last century and A.P. Giannini in this century, is fast fading from the American scene.

The interstate-banking bill that Congress passed this month was a long time in coming, but it wasn't even controversial in the end. What opposition there was came from the Independent Bankers Association of America, but many small-bank presidents who belong to that group say they don't see nationwide banking as much of a threat.

Whichever way they had voted, our senators and representatives probably wouldn't have heard from very many constituents who didn't work for banks.

It wasn't always thus.

The bigness of banks was a major election issue in 1832, when President Andrew Jackson yanked the charter of Biddle's Bank of the United States. And when Giannini's Bank of America was gobbling up banks in the 1920s, rival bankers and politicians in the East got scared and passed laws restricting interstate banking.

Why don't the names of Hugh McColl Jr. and John B. McCoy conjure up the same kind of emotion as those of Biddle and Giannini? McColl, chairman of NationsBank Corp. in Charlotte, N.C., and McCoy, chairman of Banc One Corp. in Columbus, Ohio, are among the early favorites in the race to build a truly national banking empire.

Part of the answer is that both men still benefit from their companies' origins in medium-size cities. Despite the size and success of Banc One and NationsBank, Americans still can cheer for them as underdogs winning the race against big New York, Chicago and California banks.

The other reason that interstate banking finally became inevitable lies in banking's recent history. Banks are not as powerful as they once were: Investment firms have taken over much of their role in corporate finance, and individuals have gotten used to getting a car loan from Ford, a money-market account from Fidelity and maybe even a credit card from AT&T or General Electric. …