A proposal to repeal the 1987 full interstate banking provision in
Oklahoma's new interstate banking law will be consid ered by the
Community Bankers Association of Oklahoma at a meeting next month,
said executive manager James P. McKeown.
And Robert E. Harris, executive vice president of the Oklahoma
Bankers Association, said he was "shocked and appalled" by McKeown's
"It was the Community Bankers Association who, during the
arguments on interstate, wanted an immediate implementation date,"
Harris said. "The large banks were arguing for 1989 or later, with
exception of First Oklahoma (Bancorporation Inc.) who wanted an
McKeown said: "I think the questions we'll be asking are, do we
need a 1987 trigger for full interstate banking, and should we
possibly put a threshold of $100 million on (interstate acquisition
of) failed or failing banks," he said.
Noting the interstate law was passed to avert a crisis situation,
McKeown said out-of-state bidders have been noticeably absent in two
of three predicted bank failures which were given as reasons for its
passage. He declined comment on the third projected failure, which
has not occurred.
Tulsa's Bank of Commerce and Trust Co. failed May 8, and the First
National Bank and Trust Co. in Tulsa bought its deposits and some
assets for a branch. On May 29, the First National Bank and Trust
Co. in Norman failed, and basically the same arrangement was made by
Liberty National Bank and Trust Co. of Oklahoma City for a branch.
Both First Tulsa and Liberty are subsidiaries of Banks of
Mid-America, the largest holding company in Oklahoma.
Bank companies from Kansas and Texas attended a bidders' meeting
held by the Federal Deposit Insurance Corp. for the Norman bank, but
McKeown said the out-of-state bankers were more interested in seeing
how Oklahoma's bidding process works than buying its merchandise.
Since out-of-state banks "did not react to our need and crisis,"
McKeown said there is no need for wide-open interstate banking that
will go into effect just as Oklahoma are getting on their feet again.
The law signed by Gov. George Nigh in May provides for immediate
acquisition of failed or failing banks by interstate buyers if no
Oklahoma buyer is found, with full interstate banking effective July
An entering bank will be prohibited from expanding in the state
unless its state of origin has passed an interstate law which
includes Oklahoma. Absent such legislation, the entering bank would
beable to expand after four years.
A threshold would mean the emergency interstate failed or failing
legislation could not be used on a bank with assets under $100
Federal law provides for the emergency interstate takeover of
banks with assets of $500 million or more, and Congress is expected
to modify that amount to $250 million this year.
McKeown said he believes the expanded branching law signed by Nigh
this year should take care of the smaller banks' problems, without
making them vulnerable to an unwelcome interstate purchase.
The branching bill allows unlimited acquisition of failed or
failing Oklahoma banks by other in-state banks, regardless of
"It was the branching legislation that allowed Banks of
Mid-America to purchase First of Norman," McKeown said. "It might
behoove us to consider a threshold to keep interstate banking out of
the small bank market. That way, they couldn't make entry in the
state by buying a very small bank and capitalizing on our branching
laws to expand."
Harris, of the Oklahoma Bankers Association, said McKeown was
"seriously misreading" the attitudes of the small bankers in
Oklahoma, who would resent being excluded from the opportunities
afforded large banks.
For instance, Harris said bankers in Guymon strongly opposed the
earlier position taken by the Oklahoma Bankers Association for a $100
million threshold. …