Legislation updating Ohio's banking laws is expected to be signed by Gov. George V. Voinovich on June 27.
Called the banking recodification bill, the measure modernizes the state charter and provides state banks with some regulatory relief.
"This modernized banking code will give banks the flexibility to remain competitive in today's market and will help them better serve the needs of customers," Gov. Voinovich said after the legislature approved the bill May 28.
The Ohio House passed the bill on a 95-1 vote; the Senate approved it 33-1.
Donna Owens, director of Ohio's Department of Commerce, said, "In analyzing and rewriting the law, we tried to be as flexible as possible to accommodate new technology while maintaining the safety and soundness of the institutions."
The new law will allow competing banks to team up to serve each other's customers. Mike Van Buskirk, executive vice president of the Ohio Bankers Association, said this provision will make it easier for customers to get banking services.
The new law also will allow banks to open new ATMs with a simple notification to state regulators, rather than the formal branch application process now in use. Additionally, banks will be able to set up temporary service locations in mobile homes near places like nursing homes or events like the Ohio State Fair.
Trust companies, too, will gain the freedom to choose where they want to conduct business. "The new law eliminates a lot of barriers in the trust laws that did not make sense," Mr. Van Buskirk said.
The state's banking code is outdated, he said.
There are "1,001 different obsolete things," according to Mr. Van Buskirk. "It was becoming increasingly arcane and we wanted to modernize it."
Mr. Van Buskirk noted that the state's rules require banks to keep paper copies of documents because they were written before the creation of imaging devices. Under the new law, banks will be able to cut storage costs by using new technologies.
Separate interstate branching legislation passed last month allows state banks, savings and loans, and savings banks to buy out-of-state institutions.
Mr. Olaya is an intern with the Institute on Political Journalism, a program of the Fund for American Studies.
