Bankers Favor Statewide Branching by Acquisition / Proposed through House Bill; Only Issue Voted On

Article excerpt

Statewide branching through acquisition of banks has been given priority by the Oklahoma Bankers Association in its 1988 legislative agenda, which was released Tuesday.

Statewide branching by acquisition, proposed through House Bill 1679 in the Oklahoma Legislature, was the only issue voted upon by the association members. It received widespread support, said Laura N. Pringle, attorney for the association.

The bill, authored by Rep. Steve Lewis, D-Shawnee, was passed by the Oklahoma House Banking and Finance Committee last week and will next be considered by the full House.

The Oklahoma Bankers Association also sponsored Senate Bill 501, which would provide parity in powers of Oklahoma state-chartered banks with national banks.

That bill, which was approved by the Senate Finance Committee Tuesday, has been labeled a housecleaning measure, because its primary purpose is to clarify provisions of the law or correct deficiencies in Oklahoma banking statutes.

Positions on legislative issues, anticipated to be addressed during the current session of the Oklahoma Legislature, were developed by the Oklahoma Bankers Association's Government Relations Council and reviewed by the board of directors.

Revisions were made within Senate Bill 501 to provide state banks equal footing competitively with national banks, said Pringle.

The bill would restrict financial services vendors who are entering or branching in new market areas to use similar names as the banks already operating in the area.

"This is an industry initiative to address concerns about new competitors," Pringle said.

In light of the possibility that branching powers will expand in the future and with interstate banking, bankers are concerned that customers know who they are doing business with and that a procedure for approval of branch names be created, she said.

Some of the other functions of Senate Bill 501, as described by the bankers association, would be to:

- Limit the absolute liability of state bank directors for lending limit violations.

- Clarify that reports of examination under the Oklahoma Bank Department may not be used for discovery in litigation.

- Allow the Federal Deposit Insurance Corp. to serve as the only necessary party in litigation involving a state bank liquidation, rather than jointly with the state banking department.

- Provide that qualifying shares of stock for directors be permissive only and not required.

The Oklahoma Bankers Association is also a sponsor of House Bill 1159 involving unclaimed property disposition. The bill would amend the law on abandoned property and clarify the powers and duties of the Oklahoma Tax Commission relating to the disposition of unclaimed property.

The issue, Pringle said, is to protect customers' privacy and comply with banking law requirements while also complying with state escheat law.

The association holds the position that banking regulatory agencies can fully examine and enforce compliance with unclaimed property laws and avoid the violation of customer privacy rights that would result from Oklahoma Tax Commission audits of the bank customer's financial records.

The Oklahoma Bankers Association is a party in at least one case involving Oklahoma Tax Commission audits of banks for unclaimed property. A permanent injunction issued by the Oklahoma County District Court against the tax commission is pending on appeal with the Oklahoma Supreme Court.

Another piece of bank-related legislation sponsored by the Oklahoma Bankers Association involves homestead and other debtor property exemptions.

House Bill 1658 provides for a limitation on homestead exemptions of $100,000, based on the fair value of the home. …