Colorado's largest banks have backed off their pledge to resign from the state's main trade group.
The banks had threatened to resign if the Colorado Bankers Association did not reverse its "opt-out" position on interstate branching by Jan. 9. That was the day the Colorado legislature began debating a bill that would bar interstate branching in the state..
But those banks - Banc One, First Interstate, Norwest, Colorado National, and Key Bank - now say they will work with the trade group's like-minded independent banks in support of interstate branching and won't let the dispute rupture the organization.
Roy Whitehead, president of First Interstate Bank of Colorado, said the large banks will work from within to change the voting procedures that led the group to come out against interstate branching.
But the large banks continue to say they are willing to resign from the trade group if it does not support their interests.
"If those things are not accomplished by the next time we pay our dues, we'll have to look at (resigning) again," said Mr. Whitehead. Banks next pay membership dues to the trade group in June.
James Levine, an official with the group, said it had not yet been notified of the big banks' plans. He said the group's board had decided to explore the voting procedures that led to the split, but that "the vote on interstate branching will stand."
The problem began this summer after passage of the Riegle-Neal Interstate Banking and Branching Act, which permitted states to "opt out" and continue to prohibit banks chartered elsewhere from branching into the state.
The Colorado Bankers Association's executive board first met last fall to consider whether to support opting out or opting in, or to remain neutral. But small banks, which vastly outnumber the five largest banks but have a minority of banking assets in Colorado, pushed for a full vote of the membership to decide what position to support.
Though the five largest banks control more than 65% of the state's banking assets and provide the trade group with more than 50% of its revenue, the vote went against them. The association is supporting a bill that would have Colorado opt out of the Riegle-Neal law.
Though virtually all bank trade groups decide fundamental policy issues on a one-bank, one-vote basis, the large banks argue that this procedure is outdated and doesn't reflect the views of most of the banking industry.
But what happens between now and June could be even more contentious if small banks, wary of losing their voting power, balk. To change the voting structure would take another vote of the membership on a one-bank, one-vote basis.
"We are going forward representing the views of all banks," said Mr. Levine. "We would like to continue to have (the large banks') representation. Because the way things are all banks agree on 99% of the issues they face, so this thing has to be kept in perspective."
