Texas Trade Group Fires the First Shot in Battle to Stymie New Branching Law
O'Hara, Terrence, American Banker
AUSTIN - Community bankers in Texas have kicked off a campaign to scuttle interstate branching - and the movement could soon spread to other states.
The Independent Bankers Association of Texas resolved last week that the state should opt out of the new federal interstate law. That law, signed by President Clinton last week, gives each state such an option.
The campaign will pit Texas' community banks against such behemoths as BankAmerica Corp., Norwest Corp. and NationsBank Corp., each of which has banks in Texas. Charlotte, N.C.-based NationsBank has already launched a Texas advertising blitz in support of interstate branching.
Texas, whose legislature is likely to take up an opt-out proposal early next year, is the first big banking state to tackle the issue.
Many other states will be watching "to see which way the wind is blowing," said Christopher Williston, chief executive of the Texas group.
The leadership of the Independent Bankers Association of America flew into Texas last week to advise the state group, which was holding its annual convention in Austin. The IBAA officials warned that an opt-out campaign would require substantial resources.
"Everybody realized it was going to be a fight," said Cleve Breedlove, incoming chairman of the Texas group. "When you make a commitment to this you're going up against some big forces."
Big banking companies with operations in a number of states have pushed hard for interstate branching, which would allow subsidiary banks to be run as branches. But smaller banks have fretted that interstate organizations would siphon deposits out of communities.
With the new campaign, the Independent Bankers Association of Texas could clash with the Texas Bankers Association. …