Community banks aren't yet taking advantage of new laws in at least 10 states allowing them to act as agents for one another in taking out-of- state deposits and loan payments.

Although applicable to institutions of all sizes, the agent powers would be particularly helpful to community banks trying to serve distant markets or follow customers as they move out of the region, bankers and regulators say.

"A lot of our independent banks serve small, fairly isolated markets," said H. Donald DeMatteis, Maine superintendent of banking. "This would allow them to affiliate with banks in other markets to allow customers more access to statewide services."

"It's a good opportunity for the independent banks in our state that don't have a wide branch network to affiliate with another bank for deposit gathering or loan collection," said Jim Pishue, executive director of the Washington Independent Community Bankers Association.

"It just gives them more access to conveniences for their customers," he added.

The powers would also eliminate the need to go through the more expensive procedure of branching or actually merging two institutions under a holding company roof to achieve the same goal.

"It's a way for community banks to give their customers geographic capabilities that they don't have now," said William H. Chadwick, president and chief executive of Banknorth Group, Burlington, Vt., whose multiple subsidiaries have been using the power for two years. "Time will tell how useful it will be."

Some of the new laws were inspired by a provision in the federal interstate branching law that permits national banks owned by holding companies to act as agents for one another across state lines in a variety of functions, including deposit gathering and loan collection.

The laws in 21 states extend the same powers to state-chartered institutions. Ten states went one step further and permitted independent banks - institutions not owned by holding companies - to form such agency relationships. In those jurisdictions, state banks actually have a leg up over institutions with federal charters.

Laws permitting such relationships have already been passed in California, Idaho, South Dakota, Minnesota, Wisconsin, Michigan, Tennessee, Alabama, Louisiana, and Vermont.

Other states, including Maine and Washington State, are considering similar provisions.

One state regulator said the new laws only made common sense.

"There certainly doesn't seem to be any serious public policy reason not to allow that kind of activity," said John Bley, director of financial institutions in Washington State. "That seems to help the consuming public. Why should we stand in the way of that?"

Mr. Bley said the agency powers offer community banks a way to "retain their high touch, but also provide those people with the opportunity to have their nonlocal banking needs filled."

Despite the promise of the new powers, few institutions have applied for permission or notified state officials of their intent to use the laws. And state regulators suspect that's because most of them either don't know enough about them or are still studying the best way to take advantage of them.

"Many of the banks are trying to decide the most efficient delivery system for their customers - and this is one possibility under consideration," said Walt Mix, chief deputy superintendent of the California banking department. "It's one of those things that sounds like a good idea to those people. It makes available to them an additional option going forward."

Also, some community bankers might still fear competition from an agency affiliate, said Michael J. Mach, division administrator for supervision and regulation in the Wisconsin banking commissioner's office.

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