Eey on the States: State Banks Bid to Lift Mass. Law that Keeps Them

Seeking to remove what they see as an outdated restriction, Massachusetts bankers are pushing ahead with a legislative effort to lift the state ban on Sunday banking.

Legislation to allow state-chartered banks to open both stand-alone and supermarket branches on Sundays has passed the state Senate and is awaiting a vote on the floor of the House of Representatives.

"There's been a tremendous shift away from prohibitions against doing business on Sundays," said Kevin Kiley, executive vice president of the Massachusetts Bankers Association. "It's all based on mobility of consumers. They want access to conducting regular activities on Sunday."

The move in Massachusetts, one of the few states that still prohibits banks from operating on Sundays, is being driven by a desire to compete with national banks.

Under federal regulatory rulings, national banks are allowed to open on Sundays, and many national banks in Massachusetts have opened supermarket or mall branches that operate on any day the supermarket or mall is open. But the state banks have not been allowed to follow suit. Some have opened supermarket branches, only to find to their frustration that they can't keep them open every day.

"Certainly what's driving a lot of the discussion is the growth of branches in supermarkets and the need for those branches to be open to accommodate the market demand for them," said Mathew H. Street, associate general counsel for the American Bankers Association.

"What this bill would do is attempt to provide parity with national banks for Sunday openings," Mr. Kiley said.

The move follows passage a few years ago in Massachusetts of a ballot question that authorized retailers to open on Sundays. That vote didn't apply to banks, however, because they're governed under a different code.

Many states used to have prohibitions against bank openings on Sunday, but most have since removed them. At least two states - Utah and Alabama - still have such laws on the books.

Under Alabama's parity law, however, the state banking department may grant a power to a state bank if national banks have it. The department hasn't yet received such a request from any state institution.

"Essentially what the legislatures are doing is accommodating market forces," Mr. Street said.

But Tom Hidell, senior vice president of International Banking Technologies in Norcross, Ga., said he didn't think that supermarket banking was a driving factor in changing the laws in other states.

However, he noted that since there are so many supermarket sites in Massachusetts, and 16% of supermarket shopping is conducted on Sundays, "you sure want to be capitalizing on that opportunity."

"Anybody that has a vested interest in doing business on Sunday would obviously have a reason to want to change a blue law," Mr. Hidell said.

Although the change might not please traditionalists who object to business being conducted on Sundays, no such concerns have surfaced.

Industry officials agree that some of the smaller community banks would rather not work on the day of rest. And they'd rather not open up another day, when they'd have to work more and pay employees just to compete with someone who is bent on opening on Sunday.

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