Magazine article American Banker

Nationwide Interstate Bill Proposed in Massachusetts

Magazine article American Banker

Nationwide Interstate Bill Proposed in Massachusetts

Article excerpt

As the U.S. Supreme Court continues to consider whether it will hear a challenge of Massachusetts' regional interstate banking law, a nationwide interstate banking bill has been proposed in that state's legislature.

State Sen. John A. Brennan, the architect of the Massachusetts regional statute, has proposed a bill that would permit banks from anywhere in the nation to acquire Massachusetts banks as long as the home states of the buyers permit similar entry to Massachusetts banks.

"This is a reasonable next step," said Mr. Brennan in a telephone interview. He added that the decision by the Comptroller of the Currency to lift the moratorium on limited-service interstate banks was a major factor in his decision to propose a nationwide interstate banking bill now.

Under present law, Massachusetts banks can be acquired only by banks from other New England states with interstate banking laws -- Connecticut, Maine, and Rhode Island.

Mr. Brennan's proposal for Massachusetts is similar to New York State's interstate banking law. Maine and Alaska also permit nationwide entry, but they do not require reciprocity from the buyer's home state.

The New England law is being challenged by Citicorp and Northeast Bancorp Inc. of New Haven, Conn., through an appeal to the Supreme Court of a lower court ruling that regional interstate banking laws are constitutional.

Citicorp and Northeast, which are actually challenging Federal Reserve Board orders approving a number of New England bank mergers, argue that the Massachusetts law and a similar statute in Connecticut violate the Commerce, Compact, and Equal Protection clauses of the U. …

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