The Maryland General Assembly has enthusiastically embraced the Riegle- Neal Interstate Banking and Branching Act, making the state the fifth in the nation to opt-in early.
The legislature last week voted unanimously in favor of early opt-in, and if signed by Gov. Parris Glendening, the legislation would go into effect Sept. 29.
The federal law takes effect automatically in 1997, unless a state votes to opt out before then.
The laws in Maryland and Virginia, which voted to opt in two months ago, would be the least restrictive among the early opt-in states. Out-of-state banks would be able to acquire single bank branches in Maryland, as well as start branches in the state from scratch.
Idaho, Oregon, and Utah, the other states that have opted in this year, all have placed some restrictions on the sort of branching to be allowed. Opt-in bills are pending in 11 other states.
"Those that prepare for the future will be rewarded," said John B. Bowers, executive vice president of the Maryland Bankers Association. "This will create a more favorable environment in the state and provide incentives for banks to remain here or for others to consider moving here."
The sentiment among bankers in the state was overwhelmingly in favor of the bill, Mr. Bowers said. There were about four or five banks - all community banks - out of 90 in all that opposed opting in early, he added.
The bill includes a reciprocity provision, which means that states that have banks branching into Maryland must in turn allow Maryland banks to branch there. The surrounding states are at varying stages of considering opt-in bills. Pennsylvania appears the most likely to opt in this year, observers said.
Margie Muller, the Maryland bank commissioner, said the immediate effect would be the conversion of out-of-state banks' Maryland subsidiaries into branches.
"I don't know how much new activity we'll see in terms of acquisitions," she said. "It will probably happen gradually. We'll be much happier when the surrounding states opt in."
