Page 2
The Banker’s Advocate
State Bank Department
Hot
70
Topic
60
61
Continued from Page 1
50
requiring the acquisition
banks
40
of an existing bank in the
“target” state – or a por-
er
of
30
tion of the bank’s assets –
20
to do so.
N
u
m
b
De novo interstate
10
13
branching both into and
5
from Arkansas is prohib-
0
Favor Oppose Neutral
ited by state law, and a
sizable majority of state- Position of state-chartered banks
chartered banks want to
keep it that way.
on de novo interstate branching in Arkansas
Of 79 state-chartered
banks responding to an
informal survey con-
Source: Survey of Arkansas state-chartered banks dated July 16, 2009
ducted by the Bank De-
partment, 61 stated that
nation of the remaining
ing across their borders or through acquisition of
they oppose de novo in-
restrictions on interstate
to impose a minimum another bank. States were
terstate branching in Ar-
branching by national and
requirement on the age of allowed to “opt in” to – or
kansas. This represents
state banks,” the plan
in-state banks that can be “opt out” of – the inter-
77.22 percent of all banks
states. “Interstate banking
acquired by an out-of- state branching provisions
responding.
and branching is good for
state banking firm. of Riegle-Neal by its effec-
Thirteen banks, or
consumers, good for
The Obama administra- tive date, June 1, 1997.
16.46 percent of those
banks, and good for the
tion has drafted legisla- States retained the au-
responding to the survey,
broader economy.”
tion, but this proposal had thority over de novo
favor de novo interstate
According to the plan,
not been included in regu- branching into other
branching. The remaining
permitting banks to ex-
latory reform legislation states. About half the
five banks that responded
pand across state lines:
introduced in Congress as states now allow de novo
are neutral on the issue.
of September 21. This interstate branching, most
 Improves their geo-
The survey instrument,
graphical diversification
includes H.R. 3310, intro- of them on a reciprocal
dated July 16, 2009, was
and, consequently, their
duced by U.S. Representa- basis.
mailed to the 101 state-
ability to withstand local
tive Spencer Bachus of Federal thrifts have
chartered banks with main
economic shocks.
Alabama on July 23. This been able to branch into
offices in Arkansas. The
bill has been referred to other states for many
 Makes the banking
response rate was 78.22
system more efficient
numerous committees. years. This is due to pre-
percent.
through competition.
House Financial Ser- emptive authority – in the
Responding to the fi-
vices Committee chairman law establishing the thrift
 Improves the access
nancial crisis, the admini-
of consumers and busi-
Barney Frank of Massa- charter – that was in-
stration on June 17 un-
nesses to banking services
chusetts was working on tended to foster a national
veiled its comprehensive
in under-served markets.
legislation similar to the market for home mort-
plan, “Financial Regula-
administration’s plan. gages.
 Increases convenience
tory Reform A New
for customers who live or
The Riegle-Neal Inter- A branch office can be
Foundation: Rebuilding
work near state borders.
state Banking and Branch- established in Arkansas by
Financial Supervision and
The plan proposes that
ing Efficiency Act of 1994 an out-of-state bank only
Regulation.”
states not be allowed to
allowed all FDIC-insured pursuant to an interstate
“We propose the elimi-
prevent de novo branch-
banks to operate branches
across state lines, but only
See HOT TOPIC, Page 3
September 30, 2009
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