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

DATE: FRIDAY, August 5, 1994                   TAG: 9408060014
SECTION: BUSINESS                    PAGE: A-7   EDITION: STATE 
SOURCE: Knight-Ridder Newspapers
DATELINE: WASHINGTON                                LENGTH: Medium

HOUSE CLEARS INTERSTATE BANK BRANCHING BILL

In its first piece of major banking legislation since 1991, the House on Thursday passed a measure removing restrictions on U.S. banks hoping to establish branches across state lines.

The measure now will be sent to the Senate, where it faces opposition from Sen. Phil Gramm, R-Texas, because of an unrelated amendment on home equity loans in Texas.

Gramm has threatened to block the bill, but lawmakers hope he will back down because of the strong demand, especially among Republicans, for an interstate branching bill.

The House voted for the measure in a voice vote, without any opposition.

``It's something Congress should have done many, many years ago,'' said Rep. Bill McCollum, R-Fla.

Congress has tried several times to pass an interstate branching bill, most recently in 1991, but always has stumbled.

If the Senate can overcome Gramm's opposition, the measure is expected to clear. The Treasury Department has said it backs a branching bill; so if the Senate passes the measure and sends it to the White House, President Clinton is almost sure to sign it.

The bill would allow adequately capitalized banks to acquire out-of-state banks within a year of enactment. While that already is allowed in the vast majority of states, the measure removes remaining state obstacles to acquisitions.

The bill also would allow banks to convert out-of-state subsidiaries into branches. That would allow banks with large multistate networks such as NationsBank Corp. and First Union Corp. to substantially streamline their operations. The combined effect of the two measures is also expected to speed the flow of bank takeovers as healthy banks look to establish larger regional networks. However, states would have the opportunity to opt out of some measures in the bill.

``The benefits of this legislation are clear,'' said Rep. Stephen Neal, D-N.C., a high-ranking Democrat on the House Banking Committee whose name will be carried on the measure.

The bill also would allow foreign banks to branch in the United States, although there is opposition to that in the Senate.

Memo: NOTE: Shorter version ran in Metro edition.

by CNB