Georgia's longtime banking commissioner has weighed in on the state's controversial intrastate branching fight - though grudgingly.
At a pre-legislative session with the state's Senate and House banking committees this month, Edward D. "Jack" Dunn, who has headed the state's Banking Department for the past 24 years, said he supports full statewide branching.
Mr. Dunn, who had not previously taken a public stand on the issue that has divided the state's bankers for years, reportedly made his remarks only after repeated prompting from a legislator. It is very rare for a state regulator to take a position on a pending policy change, especially one so divisive.
Nevertheless, opponents of the state's restrictive in-state branching laws - which prohibit a bank from branching into other counties except by acquiring a whole bank and then converting it into a branch - are hailing the development.
"I think it's very significant," said Kenneth "Jack" Hunnicutt, chairman of the Georgia Bankers Association and chief executive of ABC Bancorp in Moultrie. "It was a very positive statement on his part that fits in with my mentality and with that of the majority of our members."
Those who oppose full statewide branching are downplaying Mr. Dunn's words.
"That was a nonevent," said Julian Hester, president of the Community Bankers Association of Georgia. "He always told me that we had the best system going and that he didn't think we should change it. But they kept pushing him and eventually jogged him into saying it."
Mr. Dunn could not be reached for comment.
The statement, whatever the context, is another recent development that appears to be shifting momentum toward eliminating, or at least reforming, the state's branching laws. Georgia's Chamber of Commerce and a Savannah newspaper have also come out in favor of statewide branching.
The Georgia banking industry's stand on the issue remains unclear.
The Community Bankers commissioned a survey showing that 71% of respondents did not want statewide branching. But the Georgia Bankers Association said its discussions with more than half of the state's bankers showed a majority support it.
The two banking trade groups, which have tried but failed to reach a consensus, are preparing bills for the state's upcoming legislative session beginning in January.
"I don't think either association has a clear read on what the banks in the state want to do," said T. Ken Driskell, chief executive of $75 million-asset First Colony Bank of Alpharetta. "But the complex thing about this is that if you call a bank and ask its position, the chairman, president, and largest shareholder could all give you different answers."
Mr. Driskell supports statewide branching and would turn a loan production office in a neighboring county into a full-service branch if a reform bill is passed.
Others suggested that though it is important for the state's legislature to gauge the views of the bankers, the good of the state and of its citizens should be paramount.
Full statewide branching would translate into more competition, lower rates, and more convenience for customers, supporters said. Opponents respond that statewide branching would mean more consolidation, and consequently, less competition, not more.
But community banks today are competing not just against each other, but against the Merrill Lynches and Charles Schwabs, companies not subject to restrictions on where they can do business, branching supporters said.
"The whole marketplace has changed, and that's what has put this on the table again," said Walt Moeling, a lawyer with Powell, Goldstein, Frazier & Murphy in Atlanta. "There are no services of commercial banks that aren't also provided by nonbank competitors."
Many predict that at least some reform of the branching laws will be enacted in the next session, with a possible trigger date in the next two or three years for statewide branching. The state is also expected to opt into the federal interstate branching legislation to go into effect in 1997.
Only six other states in the country still restrict statewide branching in some manner.
