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

DATE: WEDNESDAY, April 27, 1994                   TAG: 9404270085
SECTION: BUSINESS                    PAGE: B-7   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

SENATE SUPPORTS INTERSTATE BANKING

Banking would be more convenient for 60 million Americans living near state borders and expansion easier for the nation's largest banks under legislation the Senate adopted Tuesday.

In the most important change to the structure of the banking system since the Bank Holding Company Act of 1956, the Senate bill, adopted by voice vote, would lower barriers to interstate banking that date from 1927.

``The lives of bank customers nationwide will improve considerably for the better as a result of this legislation,'' said Sen. Christopher Dodd, D-Conn.

The 60 million people who live in border areas and the 4 million who commute to work across state lines would be able to establish bank accounts in their home states and make deposits and cash checks in branch offices in nearby states, he said.

Within a year of enactment, bank holding companies would be permitted to establish a bank in any state. Starting in June 1997, holding companies would be able to convert their individual state banks into branch offices of a single large bank.

State legislatures would be permitted to opt out of interstate branching, although few are expected to do so.

The second change, on branches, is considered by far the most significant and would enable the nation's biggest banks to save millions of dollars a year by eliminating the separate boards of directors and roster of corporate officers now required in each state in which they operate.

It's expected to quicken the already fast pace of mergers in the banking industry and help such giants as BankAmerica Corp. and NationsBank Corp. to extend their reach from coast to coast.

Every state, except Hawaii, already permits their banks to be owned by out-of-state holding companies. But the current system has been described by Treasury Secretary Lloyd Bentsen as a clumsy patchwork, with many states imposing conditions on out-of-state owners and banks forbidden to have multistate branch networks.

With the strong backing of the Clinton administration, the House on March 22 adopted similar legislation. The two versions are expected to be reconciled in a conference committee and returned to both chambers for final approval by late spring or early summer.

by CNB