OCC Enters New Battle with Texas Involving Use of the 30-Mile Rule

The Office of the Comptroller of the Currency has entered another legal battle over branching rights with the Texas Banking Department.

The OCC on Friday approved an application by Sun World, a subsidiary of NationsBank Corp., to move its main office from El Paso to Santa Teresa, N.M., while retaining its two Texas offices as branches.

On June 18, the Texas Banking Department sued to prevent this action by the $134 million-asset institution. The Texas Legislature voted last year to prevent banks from branching across the state line until 1999.

In its approval order, the OCC said it will join Sun World in its fight against Texas regulators.

The OCC and the Texas Banking Department are currently involved in another lawsuit. On May 22, a U.S. district court overturned an OCC decision authorizing Commercial National Bank of Texarkana to move its headquarters into Texas while retaining its Arkansas operations as branches. The OCC appealed the decision on July 1; a court hearing has not yet been scheduled.

Both cases involve a controversial rule allowing a national bank to move its headquarters anywhere within a 30-mile radius.