In the latest sign of how banking consolidation could change the structure of regional associations, First Interstate Bancorp has decided to drop its memberships in several automated clearing houses.

Despite having operations spread across 13 states, First Interstate said it will focus its relevant funds transfer energies in Western Payments Alliance, the ACH association based in the company's home state of California.

First Interstate officials expect to cut dues and other redundant costs by severing ties with five regional associations: the Rocky Mountain ACH group in Denver, the Southwest group in Dallas, the Upper Midwest group in Minneapolis, the Northwest group in Seattle, and the Oregon group in Portland.

To take effect by yearend, First Interstate's consolidation move is similar to, but farther-reaching than, steps previously taken by other superregional holding companies to streamline their ACH activities.

The same pressures, driven by the expansion of companies like NationsBank and First Union, are forcing a rethinking of regional automated teller machine networks and of any trade groups deemed to have common missions or overlapping memberships.

"Over the last three years, we have aggressively eliminated duplication and reduced staff and costs to stay competitive," said Randy Kahn, senior vice president of First Interstate. "It is fair to expect no less of our industry associations."

Saying the idea of "dozens of independent associations" has outlived its usefulness, he called for "a leaner organization" and a greater reliance on the National Automated Clearing House Association, the Herndon, Va., rulemaking and coordinating body for the regional groups.

With 1,100 branches in the West, First Interstate's bank subsidiaries have been members of seven of the 26 regionals classified by Nacha as "staffed associations." These organizations mainly provide education and marketing support for direct payroll deposits and other ACH payment programs. Most operating and processing responsibilities fall to the Federal Reserve banks and their principal competitor, Visa U.S.A.

Aside from Western Payments Alliance, or Wespay, which is based in San Bruno, Calif., First Interstate will retain its membership in the Arizona Clearing House Association, which offers another of the private-sector processing alternatives to the Fed.

First Interstate will also hold on to its "captive" association, the First Interstate Automated Clearing House, one of 10 single-company entities that are direct members of the national association.

Bill Bley, executive director of the Northwest association in Seattle, said First Interstate's announcement came as a surprise. "Hopefully Nacha is not of the belief that all the local associations have no value," Mr. Bley said.

"First Interstate has every right to drop out," he added. "But if I'm marketing in Washington (State), I'm in fact supporting them in one of their larger markets."

Mr. Bley said Wespay had proposed merging with Northwest, but the regional board demurred, saying it could do a better marketing and support job by staying independent. The Oregon ACH, another of the 12th Federal Reserve district "satellites" of Wespay, reached the opposite conclusion, and a merger is pending.

Also recently completed was a merger in the Midwest of Indiana Exchange Inc. into Mid-America Payment Exchange of Kansas City.

Andrew Higgins, Nacha's chairman and a senior vice president of Barnett Banks Inc. in Florida, has seen firsthand the effects of declining numbers of members trying to squeeze costs. NationsBank and First Union, members with Barnett in Payment Systems Network of Maitland, Fla., have withdrawn from some smaller ACH groups.

"I think this trend will continue, and I think all the local associations will have to take a hard look at what the future holds," Mr. Higgins said.

Although he sees some "positives" in the fact that fewer associations mean more efficient rulemaking, Nacha "definitely needs and wants the local representation," he said. "We have to be careful as this thing evolves to make sure that we get the representation of all the institutions."

Holly Merrill, president of the Arizona Clearing House Association, called First Interstate's withdrawals a "sign of the times. In every industry, associations will be a dying breed unless they can produce very valuable products and services that are beneficial to the users."

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