Court Lifts Cloud over Regional Interstate Laws; Federal Appellate Ruling Holds Them to Be Constitutional; Supporters Cheer, but Losers Hint the Fight Isn't Over

By Fraust, Bart | American Banker, August 3, 1984 | Go to article overview

Court Lifts Cloud over Regional Interstate Laws; Federal Appellate Ruling Holds Them to Be Constitutional; Supporters Cheer, but Losers Hint the Fight Isn't Over


Fraust, Bart, American Banker


NEW YORK -- A cloud of uncertainty has been removed regarding the constitutionality of state laws restricting interstate banking to a particular region, proponents of regional banking said Thursday.

They were referring to a ruling this week by a federal appeals court in New York that affirmed recent Federal Reserve Board decisions approving mergers of Connecticut and Massachusetts banks.

"This ruling is constructive for the New England region and for all other states considering some form of regional compact," said James Moynihan, senior vice president of the Boston-based investment banking firm of Moseley, Hallgarten, Estabrook & Weeden Inc.

"It's a very sweet victory," said Britan J. Woolf, Connecticut banking commissioner.

The court decision -- handed down by the United States Court of Appeals for the Second Circuit in New York -- came in connection with appeals of the Fed rulings filed by Citicorp and Northeast Bancorp Inc. of New Haven, Conn.

Backers of regional banking were encouraged that the court dealt head-on with the constitutional questions raised by Citicorp and Northeast. And they expect the ruling to spark merger deals in New England and the Southeast, where a number of states have enacted regional interstate banking laws, and to encourage other regions of the country to go ahead with regional interstate plans.

"This is an important precedent for regional banking," said Joel R. Wells Jr., chairman and chief executive officer of Sun Banks Inc. of Orlando, Fla. Sun recently agreed to merge with the Trust Company of Georgia, Atlanta. Florida and Georgia have enacted legislation that will permit interstate bank mergers next year among a band of states in the Southeast. 'A Welcome Decision'

"This is a very clear decision that regional interstate banking is within the purview of state action," he added.

"It's a welcome decision that helps lift the cloud over regional banking," said Paul D. Hill, executive vice president of First Atlanta Corp. "A number of companies, including ourselves, had concern about the decision. The resolution of the issue on a positive basis will make companies more willing to move ahead."

However, one opponent of regional interstate banking vowed that "this is just the beginning of the war," saying that Citicorp and Northeast will take their fight to the United States Supreme Court.

Spokemen for Citicorp and Northeast were not saying publicly Thursday whether a decision to appeal had definitely been reached.

"We are exploring our options of appeal," said Daniel Glassberg, counsel for Northeast. "We haven't made a definite decision on method."

He added that there are other options besides an appeal to the Supreme Court, though he declined to disclose them. Northeast has accepted a merger offer from the Bank of New York Co.

A source close to Northeast said the Connecticut bank probably first will ask the appeals court for a rehearing before it makes the appeal to the Supreme Court.

Citicorp and Northeast are challenging Federal Reserve Board rulings allowing the following deals:

* The Bank of New England Corp., Boston, and CBT Corp. of Hartford, Conn.

* Hartford National Corp. of Connecticut and Arltru Bancorp Inc. of Lawrence, Mass.

* The Bank of Boston corp. of Massachusetts and Colonial Bancorp Inc. of Waterbury, Conn.

Under the court ruling, the mergers cannot be completed before Aug. 22. Citicorp and Northeast will probably seek to halt completion of the mergers pending the appeal to the Supreme Court. Constitutional Violations Charged

In addition, the Bank of Boston has agreed to acquire RIHT Financial Corp. of Providence, R.I., and the combined Bank of New England-CBT would buy Maine National Corp. of Portland.

In their court challenges, Citicorp and Northeast argued that the Connecticut and Massachusetts laws violate several sections of the United States Constitution, including the Commerce Clause, the Compact Clause, and The Equal Protection clause. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Court Lifts Cloud over Regional Interstate Laws; Federal Appellate Ruling Holds Them to Be Constitutional; Supporters Cheer, but Losers Hint the Fight Isn't Over
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.