Magazine article American Banker

Continental's Woes Spark Support for Reciprocal Measure in Illinois

Magazine article American Banker

Continental's Woes Spark Support for Reciprocal Measure in Illinois

Article excerpt

CHICAGO -- Continental Illinois Corp.'s ongoing problems have sparked additional support in the Illinois legislature for a reciprocal interstate banking bill, the proposal's sponsor said.

Continental's woes have "renewed interest in the bill," said its sponsor, Rep. Daniel Pierce. The troubles of Illinois' largest bank, he added, "may create some new converts for the bill."

But Rep. Pierce said he is uncertain whether there are enough votes to get the proposal passed. And there isn't much time left. The proposal must be voted on by the House this week, or it will be tabled until next year.

The reciprocal banking bill, which would allow out-of-state bank holding companies to acquire a bank in Illinois if the other state's law allows Illinois banks to do the same, would expand the number of potential merger partners for Continental Illinoils National Bank & Trust Co. of Chicago. The bank is the largest subsidiary of Continental Illinois Corp.

The nation's largest 11 bank holding companies have been mentioned as possible suitors for Continental Illinois, but under Illinois law, only one, First Chicago Corp., would be legally allowed to take over Continental.

First Chicago, parent of First National Bank of Chicago, is the only Illinois bank hilding company, aside from Continental, among the nation's 11 largest.

First Chicago is considered by many likely to make a bid for Continental. A spokesman said Monday that it is still "much too early" to say whether the bank would bid for Continental.

Citicorp, which is also widely suspected of having an interest in acquiring Continental, would benefit if the reciprocal bill were passed by Illinois lawmakers. It has been a strong backer of the Illinois bill.

New York, Citicorp's home state, is one of two states that permit full-scale reciprocal interstate banking. …

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