Lawmakers should include foreign-owned banks in a bill that would make it easier for state banks to branch across state lines, the Institute of International Bankers said last week.

In a May 9 letter to House Banking Committee Chairman Jim Leach, executive director Lawrence R. Uhlick said state-licensed branches of foreign banks must be allowed to follow the same rules as domestic banks.

The bill would let state banks exercise powers allowed by their home state regulators when they branch into other states. However, these activities would be limited to those also permitted for national banks.

"Just as multistate branches of a state-chartered bank have a compelling need to be subject to the same home state authorization," he said, "so too do state-licensed branches of an international bank."

The legislation, sponsored by Rep. Marge Roukema, R-N.J., was approved by House Banking's financial institutions subcommittee on May 7.

The bill is supported by the Conference of State Bank Supervisors, which argues that state banks would increasingly switch to national charters to avoid the hassle of conflicting state laws after the Riegle-Neal interstate branching law takes full effect June 1.

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