ROANOKE TIMES

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, January 11, 1994                   TAG: 9401110052
SECTION: BUSINESS                    PAGE: B-5   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium


LOOPHOLE LETS BANK OPERATE IN 2 STATES

Clinton administration regulators used a legal loophole Monday to permit a Pennsylvania bank to operate in two states, getting a jump on Congress before it considers interstate banking legislation this year.

The Treasury Department's Office of the Comptroller of the Currency said it would allow First Fidelity Bank to have branch offices in Pennsylvania and New Jersey.

The decision, by Comptroller Eugene Ludwig, was made under a legal provision that allows a bank to move its main office to another location within 30 miles.

Interstate moves of main offices have previously been permitted. But according to the comptroller's office, this is the first time the relocating bank is being permitted to keep offices in two states.

First Fidelity Bancorporation, a holding company, owns separate banks, one based in Newark, N.J., and the other in Philadelphia. It will move both offices to Salem, N.J., and combine the operations of the two banks.

Analysts expect Monday's ruling to be the first of many that will put increasing pressure on Congress to approve interstate banking legislation proposed in November by Treasury Secretary Lloyd Bentsen.

NationsBank Corp., the country's fifth-largest bank holding company, has a similar application pending to consolidate its Washington, D.C.,-area operations by moving its D.C. bank's headquarters to Maryland.

Bank holding companies may operate across state lines only through separately chartered banks in each state, each with a separate board of directors and separate corporate officers.

Analysts estimate the industry could save as much as $10 billion a year by allowing the banks themselves, rather than just the holding companies, to have multistate branch networks.

However, small, community-based banks are criticizing the move as an infringement of states' rights.



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