Most states in the Middle Atlantic region have flung open their doors to interstate branching, and the District of Columbia is apparently about to do the same.
An opt-in bill to be introduced in the D.C. Council would allow all forms of bank branching.
The bill will be considered in the council's next session, which begins in September. If no opposition arises - and none seems likely - the measure could take effect before yearend.
"It's coming," said J. Anthony Romero 3d, the district's acting superintendent of banking and financial institutions, who took office two weeks ago. "There's no doubt about that. It's on top of the agenda. We want to expand our horizons."
Branching under the Riegle-Neal Interstate Banking and Branching Act began last month in D.C.'s neighbor to the south, Virginia, and will take effect in the state to the north, Maryland, by the end of September.
The district bill would erase some archaic banking statutes.
One of them forbids state-charted banks from outside the district to do business within it. With one grandfathered exception, only national banks are allowed to bank in the district.
The Maryland bank commissioner's office, on behalf of its state- chartered banks interested in acquiring operations in the district, has been pestering district Committee on Economic Development about this law for the past year.
"There's no advantage to it," said David M. Porter, Maryland's deputy bank commissioner. "It just discourages state banks from doing business there. There's no gain by having that, and we have suggested language to amend it."
Washington's opt-in bill would eliminate this prohibition. In its preliminary form, the bill embraces nearly all possibilities under the Riegle-Neal act. It would allow de novo branching by out-of-state banks and has no limitations on how old a bank or branch must be before it can be acquired.
The bill includes a reciprocity provision, meaning that the home state of a bank that wants to branch into Washington must, in turn, allow Washington-based banks to branch there. Virginia also has this provision, so D.C. banks cannot branch there until D.C.'s law goes into effect.
"We're generally in favor of it," said Webb C. Hayes 4th, chief executive of Washington-based Palmer National Bank. "A lot of our customers live in Maryland or Virginia, so we've been looking at all sorts of options."
One of those other options is to branch under the so-called 30-mile rule, which, pending approval by the Office of the Comptroller of the Currency, allows a nationally chartered bank to move its headquarters up to 30 miles, even if that means going across state lines. The original office can then be turned into a branch.
NationsBank Corp. did this last spring to combine its banks in Maryland, Virginia, and the District of Columbia, and it is the first bank in the country to apply to merge its operations in two states, Virginia and North Carolina, under Riegle-Neal. The result will be a seamless bank operation in these three states and the district.
As for the Washington-based banks, two have moved their headquarters out of the district into Maryland this year, one by using the 30-mile rule and the other by buying a thrift.
To date, 17 states have opted into Riegle-Neal, and one state, Texas, has opted out. States can either opt in early or opt out until June 1997, when the federal legislation automatically takes effect.