Equal Footing Needed for Bidders under Interstate Banking Law / Says Comptroller
Paschal, Jan, THE JOURNAL RECORD
Federal regulators would be more inclined to use Oklahoma's new interstate banking law, if it put out-of-state buyers and in-state bidders on equal footing, according to Robert Clarke, the U.S. Comptroller of the Currency.
"It's good to have the state law available," Clarke said, "but I would prefer to see everyone bid on an equal basis."
The new law, signed May 7, gives Oklahoma banks a chance to match bids by out-of-state financial institutions in the purchase of a failed or failing Oklahoma bank.
"An out-of-state financial institution has quite an investment involved in making a bid, so it's only natural that they are reluctant to do that, if someone else can come along and beat it," Clarketold The Journal Record.
That's why federal regulators used the federal interstate banking law, which originally expired at midnight July 14, to close the $1.6 billion First National Bank & Trust Co. of Oklahoma City and arrange its sale to First Interstate Bancorp. of Los Angeles.
That transaction ruled out the expected first big test of Oklahoma's new interstate banking law.
The state law has yet to be put to the test - despite a string of six Oklahoma bank failures, including three in the past three weeks.
The Oklahoma Legislature rushed to get the interstate banking law passed May 7 - in hopes it could be used to prevent the failure of the Bank of Commerce in Tulsa.
The next morning, Bank of Commerce was closed at 9:30 a.m. because of a run on deposits.
Oklahoma Banking Commissioner Robert Y. Empie blamed the news media for causing the run. That touched off a debate on what responsibilities banking regulators and the media have with regard to informing the public about a bank's true condition.
Oklahoma's liberalized branch-banking law - also passed this year - was used to reopen the failed Bank of Commerce on May 9 as a branch of the First National Bank & Trust Co. of Tulsa, a subsidiaryof Banks of Mid-America, the state's largest multi-bank holding company with about $3.4 billion in assets on June 30.
The broader branch-banking statute also has been used in three other bank acquisitions since early May, including two purchases in the past three weeks:
- The First National Bank & Trust Co. of Norman, closed May 19 by the comptroller's office, was acquired as a branch by Liberty National Bank & Trust Co. of Oklahoma City.
- The First National Bank & Trust Co. of El Reno, declared insolvent Aug. 7, was reopened Aug. 11 as a branch of American National Bank of Lawton.
- Citizens National Bank & Trust Co. of Oklahoma City, closed Aug. 14 by the comptroller's office, was reopened Aug. 18 as a branch of Liberty National Bank.
The First National Bank of Cordell - the third Oklahoma bank to fail in a three-week period - has been liquidated. . .
- Holliday Mortgage Corp., a Tulsa-based mortgage banking firm, has surpassed a loan servicing volume of $200 million. …