Senators oppose interstate banking bill


September 16, 1991|By Robert M. Garsson | Robert M. Garsson,American Banker

WASHINGTON -- As many as 24 Senators are joining a campaign to blunt the Bush administration's efforts to permit full-blown interstate branching by banks.

Leading the coalition of senators from Midwest and rural states is Sen. Wendell Ford, D-Ky., who aims to help the states retain substantial control over out-of-state banks operating within their borders.

A spokesman for Mr. Ford said the senator is working closely with the Kentucky Bankers Association on his plan.

"We have 12 or 13 states supporting our position now," said the spokesman. That would give Mr. Ford, a senior Democrat who chairs the Rules and Administration Committee, a starting base of nearly a quarter of the Senate.

Mr. Ford's campaign is noteworthy because, until now, interstate branching had been regarded as the one new bank power almost certain to be included in any banking bill that emerges from this Congress.

When the House Banking Committee considered the administration package earlier this year, opponents of interstate authority were defeated by wide margins on key votes.

Once the banking bill moves to the Senate floor, probably next month, opponents of interstate branching may have more clout than they will in the House. Because each state has two senators, regardless of size, rural interests enjoy disproportionate influence in that body.

Moreover, a number of state banking associations have begun campaigning against the interstate provisions, and several state legislatures, from New York to Texas, have gone on record expressing concerns.

"Our feeling is that the tide is shifting in our direction," said Jim Watt, president of the Conference of State Bank Supervisors. "There are real concerns out there. As the election approaches, people are beginning to worry about the numbers of job losses" from bank mergers.

Mr. Watt said that state legislators are worried not only about job losses that would come as banks merge and lay off employees, but from a reduction in funds available to small businesses as local banks are acquired by larger institutions.

Mr. Watt said that at least 18 state bank associations, most of them in the Midwest, are strongly opposed to interstate banking. "If you draw a line from Kentucky west, and another line from Oklahoma east, just about all the states in between are part of that group," he said.

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