With the future of Missouri's branching and deposit concentration laws on the line, the state's banks have balkanized into three opposing camps.

And with the debate heading into its second year, the rhetoric is only increasing.

"Big money breeds big power, and it's a dangerous situation when you allow these banks to get as big as they're growing with nothing to stop their growth," said Jerry Sage, executive director of the Missouri Independent Bankers Association.

But his organization's efforts to get Missouri to opt out of the federal interstate branching law and maintain a 13% state deposit cap face continued challenges from a group organized last year to increase the cap to 30% and opt in early on branching.

The issues should be back in full force in next year's legislative session, said Mr. Sage, whose group will consider its impact this week at its annual conference in Lake Ozark, Mo. This year's state legislature took no action on either matter.

The Missouri Independent Bankers supported a bill to opt out of interstate branching. Finding its membership divided, the Missouri Bankers Association remained neutral on the issue.

And a group called Concerned Bankers for Missouri's Future introduced legislation to opt in early on branching. The measure got nowhere in the 1995 session, and the group doesn't plan to try again next year, said its leader, said Norman J. Tice, executive vice president, Boatmen's National Bank of St. Louis.

Under federal law, Missouri will have to permit interstate branching in 1997 anyway unless it passes opt-out legislation beforehand, Mr. Tice said. His group will opposed any opt-out legislation, he said.

Concerned Bankers also wants to raise the state's deposit concentration cap to make it consistent with national regulations.

"It would be helpful if everybody was playing by the same rules, particularly in our case, where we have seven states that touch us," he said.

Mr. Tice said the battle is not big banks versus small ones. One hundred banks support Concerned Bankers, he said, and most of them are community banks.

Both of the state's main trade groups opposed increasing the limit this year.

Mr. Sage points to situations in nearby states to support his stance. In neighboring Kansas, Fourth Financial, the largest bank, lobbied for a deposit cap increase to 15% from 12% that became effective in 1993.

"Fourth had said they wanted to be the big bank in Kansas and would be around forever," he said. "And they're acquired. The $7.5 billion-asset Wichita-based company last month announced a deal to be purchased, ironically, by a Missouri bank, Boatmen's Bancshares.

In Colorado, which has a 25% cap, "the five biggest banks control some 70% of deposits," Mr. Sage said. "That's what results when you have that high a cap," he said - most deposits wind up in the hands of out-of-state holding companies.

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