Defying a history of legislative clashes, North Dakota's two main bank trade groups have compromised on interstate branching to fight one of the state's biggest banks.
Both the Independent Community Bankers Association of North Dakota and the North Dakota Bankers Association will abandon legislation to opt out of interstate branching, but they will fight a bill introduced by First Bank North Dakota that would opt in early.
The groups have amended four state Senate bills. Their version would would let the branching component of the Riegle-Neal Interstate Banking and Branching Act take effect in North Dakota in June 1997 for national banks. That's the earliest the new federal law would permit.
The trade groups's bills would also permit banks already in North Dakota to start branching statewide in August 1996.
First Bank's state House bill includes opting in early on interstate branching - including de novo branching. It would make intrastate branching effective in August 1995 and raise the state's deposit concentration limit to 30%, from 19%.
Because the state Legislative Assembly meets for just 60 days every two years, North Dakota will be one of the first states in the nation to tackle interstate issues before its 1995 session ends next month.
A task force of the bank associations had previously supported legislation to opt out of interstate branching with the likelihood of opting back in later, perhaps in 1999.
But the concern of legislative and other state leaders that opting out would hurt North Dakota business prompted the groups to amend their bills and maintain a united front.
The trade groups have a history of legislative battles, including a 1991 "bloodbath" over interstate banking legislation, said Arlene Melarvie, executive director of the independent bankers group.
"In order to get the North Dakota Bankers (Association), we made the decision to let the opt-out go," Ms. Melarvie said. "It's us and the North Dakota Bankers against corporate arrogance."
The compromise still gives bankers time to prepare for the changes, said Pat Fisher, president and chief executive of Stutsman County State Bank, Jamestown, and current ICBND president.
"I think it's a good compromise," said Jerry Willer, president of the North Dakota Bankers Association and of Kirkwood Bank and Trust, Bismarck. "It should be satisfactory with most of our members."
However, it has caused some friction with First Bank, a subsidiary of Minneapolis-based First Bank System Inc., and with other institutions that support the big bank's bill, said Pat Corrigan, Fargo market president for First Bank North Dakota.
While he was glad to see the other bills' opt-out stance dropped, Mr. Corrigan said that First Bank's bill is the best way to put the state's banks on a level playing field with those in other states and to help banks in border cities such as Fargo.
Coincidentally, First Bank North Dakota is switching to a savings bank charter this week, which will let it branch in-state and in several nearby states, he said.
