Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, July 24, 1993 TAG: 9307240021
SECTION: BUSINESS PAGE: A-4 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
DATELINE: LENGTH: Medium
Specifically, it will look at sections that limit bank mergers to the Southeast and require 80 percent of member banks' deposits stay in the region.
Walter Ayers, executive director of the association, said the study should be completed before the next session of the Virginia General Assembly in January.
The association expects to take a stand before the next assembly, particularly if a bill should be introduced "from some other source," he said.
Virginia is the only state in the compact that has not changed its law since its adoption, another reason to study it now, he said.
Although the association has no position on changes, some of Virginia's larger banks would like to break out of the compact's restrictions.
Ayers said the study will determine whether the association should favor the changes regardless of who originates proposed legislation with the General Assembly.
The compact is a series of reciprocal agreements passed by each state in the region. Designed in the mid-1980s to bar entry of big New York banks into the Southeast, it limits banking across state lines to the nine-state region from Maryland to Florida.
The North Carolina legislature voted last month to abolish the 80 percent limit and to allow full interstate branching by 1996. Two North Carolina banks with Virginia operations - NationsBank Corp. and First Union Corp. - testified on behalf of the changes.
Now they are pushing the idea in Virginia, Florida, Georgia and other states.
NationsBank has branches in Texas acquired through purchase of a federal seizure. It is rumored to be looking at potential acquisitions as far away as California.
NationsBank spokesman Ellison Cleary said it would act in Virginia and other states "in concert with other banks." He said NationsBank would like to see the compact laws altered to allow "Southeast banks to compete nationwide."
The compact, Cleary said, was "good for its time" because it allowed Southeast banks time to grow large enough to compete outside the region. Now that they have reached that size, he said, they should be allowed to compete on the national level.
NationsBank is the fifth-largest bank in the United States. First Union ranks ninth.
"We would advocate breaking down some of the barriers" to interstate banking, said David Scanzoni, spokesman for First Union.
Changes in the law, he said, would mean "all banks can compete on an equal footing."
Scanzoni said a change in federal law to permit nationwide banking would be easier to put into effect. But banks are looking to each state because Congress has not acted on the matter.
Kyra Newman, spokeswoman for Signet Bank, said the Richmond-based company supports interstate banking and branching.
But she said Signet will not take a direct position on amendments to the compact until completion of the study by the association. She said Signet wants to see what the committee's research shows.
by CNB