Gov. Henry Bellmon Thursday signed into law a bill allowing banks to
be acquired as branch facilities by other banks without first being
declared insolvent by the Federal Deposit Insurance Corp., while
concerns were voiced by Oklahoma Banking Commissioner Wayne Osborn
that an amendment placed in another measure by the Oklahoma House of
Representatives Banking Committee Thursday might circumvent the new
House Bill 1679, authored by Rep. Steve Lewis, D-Shawnee, was
signed by the governor late Wednesday. Provisions of the measure go
into effect immediately.
House Bill 1679 would allow a bank to be acquired by other bank
for branching purposes before that bank is declared insolvent.
State law had required that banks have to be closed by the
Federal Deposit Insurance Corp. before they could be acquired by
other banks for branching purposes.
"Principally, this law will be a major step toward the orderly
consolidation of banks in Oklahoma," Bellmon was quoted as saying in
a press release issued Thursday.
"It does not permit the opening of new branches of existing
banks, rather it encourages purchase of banks as branches of existing
banks. In other words, the branches will be created by acquisition
"In this sense, it is protective of our banking system," Bellmon
While Bellmon was commending the merits of House Bill 1679 and
its potential effect on Oklahoma's banking community, the House
Banking and Finance Committee was approving an amendment to a
housecleaning bill for the banking commission, which Osborn fears
might circumvent the new law.
The amendment to Senate Bill 501 provides that a bank may
appoint and authorize other banks as its agents in order for
customers to make deposits, withdrawals and transfers between
accounts, if 50 percent of more of the outstanding stock of such
banks is owned by the same stockholders.
Meanwhile, Osborn said that although the new branching law
probably will not put an end to bank closings, it may prevent a few
closings from occurring in the near future.
"This may start off slow; mostly what we'll see will be banks
obtaining smaller banks controlled by the same holding company," he
"I don't think it will put a stop to bank closings in Oklahoma
but I think it will prevent some from happening two or three years
down the road," Osborn added. "The new law is important because it
will help reduce the overhead costs that cause problems for many