Magazine article American Banker

First Fidelity Gets OCC Approval to Operate Branches in 2 States

Magazine article American Banker

First Fidelity Gets OCC Approval to Operate Branches in 2 States

Article excerpt

WASHINGTON -- First Fidelity Bancorp., Lawrenceville, N.J., on Monday became the first banking company in the country to surmount interstate branching restrictions, winning approval to operate branches in two states.

Comptroller of the Currency Eugene A. Ludwig said he approved the move because, "as a matter of law, we're convinced they have a right to do it."

But Mr. Ludwig's decision riled Congress.

Gonzalez: 'What's the Hurry?'

"The fact that the OCC's action in the First Fidelity case is technically legal doesn't mean that it makes for good public policy," House Banking Committee Chairman Henry B. Gonzalez said. "It is unfortunate that First Fidelity is using a loophole ...to bypass the Congress."

The Texas Democrat noted that Congress is likely to take up an interstate branching bill in the next several months. "What's the OCC's hurry?" he asked.

Asked whether he is concerned about a congressional backlash, Mr. Ludwig said Congress is free to change current law.

"If Congress feels otherwise, they'll pass legislation, and we will honor that legislation," he said. "I don't want to make decisions based on politics."

The Comptroller's decision allows First Fidelity Bank Pennsylvania, which has been headquartered in Philadelphia, to relocate across the Delaware River to Salem, N.J. That bank is being merged into First Fidelity Bank New Jersey, which is moving from Newark to Salem.

Customers of either the Pennsylvania or New Jersey banks will be able to do business at any of the 625 branches in either state. …

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