House panel wants branch vote; but Gonzalez doubts move to full committee in '92.

WASHINGTON - A key House Banking subcommittee chairman is trying to bring interstate branching to a vote before his panel after hearing from regional banks that favor the measure.

"He is polling his members, and the initial response is overwhelming that they want to go to a markup," said an aide to Rep. Frank Annunzio, D-Ill., chairman of the financial institutions subcommittee.

However, the chairman of the full committee, Rep. Henry B. Gonzalez, D-Tex., has expressed serious doubts about whether interstate branching can be dealt with this year, and most observers doubt he will permit it to proceed.

"I don't see it happening this year," he said last week.

Major Disagreements

The financial institutions sub-committee heard Thursday from the industry's most enthusiastic boosters of interstate branching, including Nations-Bank chairman Hugh L. McColl. But even in that group, there were significant differences of opinion about the bill the panel is expected to take up.

Mr. McColl played down problems in the legislation.

"If it's in the bill, we support it," he responded at one point when asked about provisions in the bill that would limit the size of interstate institutions to no more than 30% of the deposits in any one state.

"We have agreed to live with everything in the bill, even if we don't like it," he added.

By contrast, Bank of America warned that the bill before the panel contained a number of flaws so serious that if they are not removed, "the bill could seriously interfere with interstate branching."

Fred J. Martin, senior vice president and director of government relations for Bank of America objected in particular to provisions that would subject national banks to laws and regulations of the host state.

"This is an unprecedented, absolute violation of the long-established principle that national banks, which are creations of federal law, are subject exclusively to federal regulation," he said.

Mr. Martin also voiced strong opposition to the proposed concentration limits and to provisions that would require interstate banks to maintain specific lending levels in local markets.

Annuity Products an Issue

"It is inappropriate to regulate the asset mix or lending practices of banks, other than on clear safety-and-soundness grounds," said Mr. Martin.

And while Mr. McColl said he was willing to leave with some restrictions on bank insurance activities as the price for interstate branching, at least one of his peers disagreed.

John F. Grundhofer, chairman of First Bank Systems Inc., said annuity products in particular are becoming important to his bank. Annuities are one of the products the insurance groups have sought to restrict in the interstate package.

The measure before the committee, which was sponsored by Rep. Bruce Vento, D-Minn., and Rep. Chalmers Wylie, R-Ohio, does not address insurance issues. However, congressional sources involved in the process said they expect a package of insurance restrictions would be considered by the sub-committee.

Rep. Annunzio and Rep. Wylie would be the likely sponsors.

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