Tennessee Governor Backs Plan for Regional Interstate Banking
NASHVILLE -- Tennessee Gov. Lamar Alexander has presented a broad plan for dealing with changes in the banking industry, including a recommendation to the state legislature to adopt regional interstate banking "as soon as possible."
Gov. Alexander on Wednesday announced a three-pronged agenda covering the next four years, with interstate banking his top priority. Also scheduled for quick attention are removal of the consumer interest rate ceiling -- now set at 5% above the prime rate -- updating of state banking laws and encouraging foreign banking agencies to locate in the state.
Scheduled for later attention is a strengthening of what Gov. Alexander called community banks or the smaller independents. He suggested that the state legislature consider giving the community banks more powers to make them competitive with their larger cousins.
The governor also proposed merging two of his cabinet-level positions -- banking and commerce and insurance -- into one agency in two years. And he asked the legislature to delay acting on holding company regulations until the U.S. Congress has the opportunity to address the issue next year.
The sweepting proposals have already stirred the Tennessee banking community, and Gov. Alexander made it clear he was prepared to take the fight out of the bank lobby and into the living rooms of Tennesseans.
"The views of bankers alone should not decide the availability of financial services in Tennessee," Gov. Alexander said. "The most important interests are the interests of those hundreds of thousands of Tennesseans who need money, credit, and other financial services to create, get, and keep jobs."
The governor's interstate banking proposal would allow interstate banking on a reciprocal basis with the eight states bordering Tennessee. They are Kentucky, Virginia, North Carolina, Georgia, Alabama, Mississippi, Arkansas and Missouri.
Four southern states -- Florida, Georgia, North Carolina and South Carolina -- have already passed reciprocal interstate banking laws applying to other states in the region.
Gov. Alexander stopped short of endorsing a "national trigger," which would allow reciprocation with any state. However, he said the national trend makes interstate banking a near certainty in the future, and he noted the presence of 325 out-of-state bank offices in Tennessee.
"These recommendations will be controversial, especially among bankers," Gov. …