Oregon: State's Largest Commercial Bank Breaks with Trade Group over Interstate Banking Bill
State's Largest Commercial Bank Breaks With Trade Group Over Interstate Banking Bill
U.S. National Bank of Oregon has broken ranks with the state's banking industry over a plan calling for interstate banking beginning in 1986.
Earlier this month, the Oregon Bankers Association agreed to a detailed proposal that would allow most banks in the state to be purchased by banks from eight other western states. But U.S. Bank, the state's largest commercial bank, says it opposes major parts of the plan.
The trade group, which represents Oregon's commercial banks on regulatory matters, wants the plan introduced in the legislature early next year. "We are putting the plan into a draft bill form [and we] hope for an introduction early in the [legislative] session,' said Frank Brawner, executive director of the banking group which wants interstate banking to take effect in July 1986.
Usually the endorsement by the key trade group carries a great deal of weight when legislators review industry legislation, but U.S. Bank's opposition to major parts of the plan diminishes some of the industry's clout.
U.S. Bank supports interstate banking, but disagrees with two key aspects of the banking group's plan--its lack of a reciprocity condition and a provision permitting endangered Oregon banks to be acquired earlier than other institutions.
That plan, the result of a year's worth of discussions, would allow any bank based in the Federal Reserve System's 12th District to buy an Oregon bank. The district includes California, Washington, Idaho, Hawaii, Alaska, Arizona, Utah, and Nevada.
To be purchased by an outside bank, an Oregon bank would have to be at least three years old. The buyer, meanwhile, could not have moved into the western region prior to acquiring a bank in Oregon, but would have to have been founded in the district.
Currently, Oregon law forbids any commercial bank here from being sold to any bank based outside of the state. Until about a year ago, the state's bankers strongly backed such a restriction, but in August they decided to support some form of interstate banking largely to aid small and medium-sized banks, many of which have been buffeted in recent years by Oregon's weak economy.
Over the past four months, bankers have held a series of discussions on the subject. An agreement was reached, said Mr. Brawner, after "an unbelievable amount of compromise.'
But even this hard-won unanimity, Mr. Brawner conceded, could be upset by individual banks calling for changes in the industry plan. …