Newspaper article THE JOURNAL RECORD

State Bank Branch Bill Introduction Next Week

Newspaper article THE JOURNAL RECORD

State Bank Branch Bill Introduction Next Week

Article excerpt

A bill that would enable Oklahoma banks to acquire failing banks as branches, regardless of statewide location, will be introduced early next week, it was reported Wednesday by Rep. Benny F. Vanatta, D-Sapulpa.

The bill also would extend current state law to permit acquiring a healthy bank as a branch if it is within 50 miles of the home bank, with an unlimited number of branches.

Currently, Oklahoma law allows a bank to set up only two branches within the town's city limits, or within 25 miles away if the branch would be in a community without a bank.

Proponents of liberalizing the law hope to prevent liquidation of insolvent banks by increasing the number of eligible bidders. A branch bank does not have to be capitalized like a newly-charteredinstitution, so that option could be more attractive to potential buyers.

The bill to be introduced by Vanatta, who authored the state's multibank holding company and branching law passed in 1983, would strike a middle ground between wishes of the Oklahoma Bankers Association and the Community Bankers Association of Oklahoma.

In a November meeting, the Oklahoma Bankers Association members voted to support legislation to waive the geographic rules on branch banking only in the case of a failed institution.

Executive vice president Robert E. Harris said that when presented the proposal of unlimited acquisition of branches within 50 miles of a home bank, members voted it down.

The Community Bankers, however, would favor stretching the limit 100 miles for the western Oklahoma counties of Cimarron, Texas, Beaver, Harper, Ellis, Woods, Woodward, Dewey, Alfalfa and Major, said James P. McKeown, executive manager.

Harris and Oklahoma Bankers Association President Murlin Derebery met with Vanatta, who chairs the House Committee on Banking and Finance, Tuesday. Calling the meeting "satisfactory," Harris said:

"We are not in an adversarial position with him. The position proposed by the Oklahoma Bankers Association is one of many sources of input he gets."

Nevertheless, Harris said he is not in a position to speak pro or con on the bill without an additional meeting of the association's membership - probably during the third week of February.

"We operate under a resolution that gives us no choice but to go back to our members," he said. "I'm not concerned. The legislative process works slowly."

The Community Bankers' proposal for a 100 mile limit in 10 western Oklahoma counties has some support, because a 50-mile extension may not be enough for that sparsely-populated area, said Rep. Walter E. …

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