Magazine article American Banker

States Urged to Update Their Laws in Light of Interstate Branching

Magazine article American Banker

States Urged to Update Their Laws in Light of Interstate Branching

Article excerpt

WASHINGTON -- In order for state-chartered banks to remain competitive as interstate banking and branching laws take effect, states will have to change some laws, the Conference of State Bank Supervisors said Thursday.

The recently passed branching law gives states until June 1, 1997, to decide how they want to participate in the system. They can participate early by, passing their own law, opt out of interstate entirely, or pass a law granting their own institutions parity with national banks.

If they eto nothing, the national law becomes effective.

Among a laundry list of other suggestions, the group recommended that, in order to avoid being left at a competitive disadvantage, a state choosing to allow interstate branching should at least opt for parity S9 that state,Chartered banks have the same authority to branch in other states. as national banks.

"If a state does nothing, national banks will be able to operate branches across state lines after June 1, 1997, but state banks will not," said James A. Hansen, director of the Nebraska Department of Banking and Finance.

"Therefore, if states do not want to put their own state-chartered banks at a disadvantage, all states must take some action before June 1, 1997. Change is coming, and state banking departments must manage it." said Mr. Hansen, who is also chairman-elect of the CSBS.

The trade group highlighted a long list of laws to be changed and issues to be addressed by states before the new interstate laws take effect. …

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