Merits and Models: Atlanta Speakers Debate Regional Reciprocal Banking

By Kutler, Jeffrey | American Banker, November 21, 1984 | Go to article overview

Merits and Models: Atlanta Speakers Debate Regional Reciprocal Banking


Kutler, Jeffrey, American Banker


ATLANTA -- It was fitting that the Federal Reserve Bank of Atlanta should sponsor this week's major conference on interstate banking. The Southeast region that it serves is one of the hotbeds of reciprocal interstate banking.

Yet most of the 20 speakers mentioned that there was noting new about the topic under study.

"Interstate banking is a reality in everything but name," stated David D. Whitehead, an Atlanta Fed researcher. He has compiled information on the thousands of interstate offices of various kinds that banks and holding companies have been able to operate legally and through exploitation of the now celebrated "nonbank bank" loophole.

"There is no question that interstate banking has arrived and arrived in a big way," said Hugh L. McColl Jr., chairman of NCNB Corp. in Charlotte, N.C., which through its acquistion of several Florida banks helped establish the Southeastern banking zone.

"The cat's out of the bag," stated Richard W. Nelson, an economist and strategic planner for Chemical BAnk, New York. "We are not any longer talking about interstate banking, but interstate branching, which you may prefer to call bank holding company expansion."

"The interstate banking issue is as old as the nation itself," added John T. Collins, general counsel of the Senate Banking Committee. He noted that an aversion to corporate expansiveness and concentration of economic power led Congress in the 19th century not to renew the charters of the two Banks of the United States. Ever since, Congress has delegated to the states authority over the extent of branch banking -- which is one reason for the crazy quilt of laws currently on the books in the 50 states.

So it seems all the more remarkable that this regional Federal Reserve Bank, historically not known as a great commercial promoter, could make a success of its meeting. During a holiday week, more than 350 people attended. Each paid $350, yielding a gross gate in excess of $100,000.

The Atlanta Fed has build a sizable business out of seminars and ancillary products. Following a formula it devised in 1981 with conferences on the future of the financial services industry and the future of payment systems, the bank showcases a list of nationally prominent speakers to attract interest from beyond the Sixth Federal Reserve District.

These are one-time rather than annual meetings, and are repeated only if events warrant. The program is strictly business, with working lunches and no lavish evening receptions.

The bank advertises its conferences by direct mail and through advertising in its monthly Economci Review, which is one of the more readable and attractive regional Federal Reserve publications.

Like any enterprising trade association, the Atlanta Fed sells cassette tapes of conference sessions. After the meeting, it reports highlights in the Economic Review. This piques interest in the official proceedings, which come in the form of clothbound books. This one, entitled "Interstate Banking: Strategies for a New Era," will be available in mid-1985 at a $35 cover price.

Robert P. Forrestal, who inherited the seminar business a year ago when he succeeded William Ford as the Atlanta Fed's president, opened the meeting by welcoming "those of you gally, to attend this conference."

It signaled a new trend -- interstate banking humor -- that will be one of this meeting's major contributions to discourse.

John D. Hawker Jr., an authority on interstate banking laws who is partner in the Washington firm of Arnold & Porter, said he advises community bankers not to worry about interstate incursions by money center banks.

"I just tell them about the Mann Act," he said, "which prohibits transportation across state lines for immoral purpose."

Mr. McColl of NCNB Corp., a supporter of regional as opposed to national interstate banking, was asked after his luncheon speech on Monday, "If statewide banking like you have in North Carolina is such a good deal for the consumer, why not just extend it nationwide? …

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