Magazine article American Banker

Thrifts Push Iowa for Charter in Case Uncle Sam Pulls Plug

Magazine article American Banker

Thrifts Push Iowa for Charter in Case Uncle Sam Pulls Plug

Article excerpt

The national debate over the thrift charter is being echoed in Iowa.

With Congress threatening to abolish the federal thrift charter, savings and loans in the Hawkeye state are urging lawmakers to create a new state savings bank charter.

If the plan were enacted, Iowa's 30 thrifts could convert to the new charter and retain liberal branching rights. Iowa is one of a handful of states that forbids commercial banks from branching into communities where another bank already operates.

Commercial banks could also use the new charter to better compete with brokerage firms, credit unions, and other financial services companies, said Richard L. Goodson Jr., president of Iowa's Community Bankers, a thrift trade group.

"In the past we believed that our biggest competitor was our friend who owned the bank across town or even in the next town," Mr. Goodson wrote in an open letter to the state's banks and thrifts last month. Branching restrictions, he continued, would "tie us down while ... other financial intermediaries gnaw away at our business as surely as termites eat away at a house."

Most of the Northeast states have had state savings bank charters for years and Missouri, Illinois, Michigan, Indiana, and Ohio have created thrift charters in recent years.

"More states are developing a savings bank charter because they want the additional flexibility," said Robert R. Davis, government relations director with America's Community Bankers.

Bankers oppose the bill. Larry Burch, acting chief executive officer with the Iowa Independent Bankers, said Congress ought to eliminate the thrift charter entirely. …

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