After a decade of opposition from the state's small banks, the contentious issue of statewide branching is being brought to a head in the Georgia legislature.

A bill allowing banks to branch anywhere in the state by 1998 passed by a 116-to-56 vote in the state's House of Representatives Thursday. It will now go to the Senate.

The bill, supported by the Georgia Bankers Association, would allow a state bank to branch into three counties a year for two years, starting in July. The three counties wouldn't have to be contiguous to one another. It would permit full statewide branching as of July 1998

The bill, similar to one that the Senate passed last year, now goes back there unless a representative moves today that the House reconsider it, as Georgia procedures permit.

"We are very much encouraged," said Kenneth "Jack" Hunnicutt, president and chief executive officer of $340 million-asset ABC Bancorp, Moultrie, who also is chairman of the Georgia Bankers Association.

"I'm a free-enterprise individual," Mr. Moultrie said, and the "invisible barriers" of county lines restrict competition.

"And I'm a community banker," he added. His group's members include large and small banks.

Georgia is now one of a handful of states that still restrict statewide branching. A bank there may branch only by acquiring an existing bank that's at least five years old and then converting it to a branch.

"We believe the system that is in place now has served our state well," said Danny Brinks, president of the Community Bankers Association of Georgia, who is also president of $110 million-asset Bank of Upson, Thomaston.

Last year's bill was tabled in the House because the issue had become so divisive among bankers.

The community bankers group had planned to introduce yet another piece of branching legislation if the House defeated the current bill. The group's substitute would let a bank branch once every five years by moving its headquarters across a county line within 30 miles and keeping the original office as a branch, Mr. Brinks said.

It also would let banks buy the operations in a county of another bank completely vacating that county, he said.

In the last year, Georgia's intrastate branching battle has taken many twists and turns.

Both bank associations supported the 30-mile idea last summer, after a national bank announced plans to use a similar national rule to cross Georgia county lines.

But the trade groups' cooperation ended in October, when the Georgia Bankers Association said it would lobby for full statewide branching by 1998.

By last month, both groups were promoting seemingly contradictory polls. Each purported to show widespread support among bankers for its sponsor's position.

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