Newspaper article THE JOURNAL RECORD

Bill Proposes Changes in State Banking Laws/including Interstate Bids

Newspaper article THE JOURNAL RECORD

Bill Proposes Changes in State Banking Laws/including Interstate Bids

Article excerpt

A bill amending Oklahoma's interstate banking law - by ending the preference for Oklahoma bidders over out-of-state bidders on failed and failing banks - was passed Tuesday without debate by the Senate Finance Committee.

Senate Bill 117, authored by Sen. Roy Boatner, D-Calera, also proposes three other major changes in state banking regulations:

- A "Delaware law" provision would enable a bank's shareholders to reduce or eliminate liability for outside bank directors.

- State-chartered banks could own "other real estate," generally collateral acquired through foreclosure, for up to 10 years, with the state banking commissioner's permission, in order to avoid being forced to sell that real estate at a time when the market already was crowded.

- Oklahoma County banks could acquire branches within five miles of their home offices.

Bill Crutcher, lobbyist for the Oklahoma Bankers Association, explained why the amendment to the interstate banking law was needed.

"The in-state banks had learned how to operate under this," he said.

Crutcher, a former state senator, was referring to the provision in the 1986 law that let Oklahoma banks match or beat bids previously submitted by out-of-state banks on failing financial institutions.

"They just laid back and didn't make a bid," he said. "They let out-of-state banks spend literally thousands of dollars sending a battery of CPAs and attorneys in to examine a bank, and then make their bid.

"Well, out-of-state banks were saying, `No thank you. We're not interested in Oklahoma' because of this."

The Oklahoma Bankers Association expressed its support for such an amendment during public hearings last fall.

The need for such a change is urgent, with 16 Oklahoma bank failures last year and seven so far this year, according to Crutcher.

The two-tiered bidding system, which favors Oklahoma bidders, will become obsolete on July 1, if this amendment becomes law.

It was originally the intent to let that two-tiered bidding system for failed and failing banks expire on July 1, 1987, when the interstate banking act was passed in May 1986, said Robert E. Harris, executive vice president of the statewide banking group .

But that language did not get into the final version of the interstate banking legislation, which was rushed into passage and signed by the governor within 24 hours last May - in an attempt to prevent the imminent failure of a large commercial bank in Tulsa. …

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