Academic journal article ABA Banking Journal

Interstate Branching: Who's Opting in, Who's Opting out, Who's Looking at the Options

Academic journal article ABA Banking Journal

Interstate Branching: Who's Opting in, Who's Opting out, Who's Looking at the Options

Article excerpt

Under 1994's Interstate Banking Efficiency Act nationwide branching will generally be permitted after June 1, 1997. As of that date, interstate banking organizations can convert bank networks into branch networks. They can also purchase banks in other states and turn them into branches. However, the legislation provided states with three options:

1. They can opt-in early.

2. They can opt-out by May 31, 1997. That is, they would prohibit interstate branching in their state but also bar banks in their state from branching into other states or acquiring banks across state lines (except for deals already done).

3. They can do nothing, leaving the timing to the federal law. Also, states are permitted to authorize de novo branching into their states and acquisitions of individual branches in their states. Unless the state authorizes these actions, these practices are barred under the federal law and branching, where not opted-out of, can only be accomplished by buying a bank and turning it into a branch or branches.

Here's she situation as of Aug. 4, based on information compiled by the Conference of State Bank Supervisors:

* Seventeen states have taken final action explicitly on interstate branching ability, with various effective dates applying.

* One state--Texas--has opted-out.

* Sixteen states have opted-in in some national fashion. They include:

Alabama, Connecticut, Delaware, Idaho, [11inois, Maryland, Nevada, New Hampshire, North Carolina, North Dakota, Oregon, Pennsylvania, Rhode Island, Tennessee, Utah, and Virginia. (In an eighteenth state, Colorado, the law does not expressly authorize interstate branching, but sets requirements and restrictions on interstate branch operations and expressly bars de novo branching. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.