A national bank in Georgia has caused a ruckus with its plan for using the controversial "30-mile rule" not to branch into another state, as in previous cases, but simply to get across the county line.

Though 21 banks across the country have received federal regulators' approval in the past year and a half to branch into other states through the loophole, no bank has used it to branch within its home state.

And branching across county lines is a big deal in Georgia.

"We are long overdue," said Jack Embry, chairman of the bank that wants to make the move, $68 million-asset Embry National Bank. "It's been 25 years since anything has been done on branching here."

The application has caused dissension in the state's community bankers association. In fact Elton Collins, who was in line to be its president next year, has withdrawn his nomination - apparently over this issue - just six weeks before he was to be elected and sworn in.

What may be at stake is the future of intrastate branching in Georgia, one of only seven states that still prohibit statewide branching.

Branching into other Georgia counties requires acquiring a whole bank there and converting it into a branch.

What's more, bankers in the other states where statewide branching is still limited will probably take notice of the Georgia application. If the Office of the Comptroller of the Currency approves it, as expected, state- chartered banks may consider converting to national charters.

According to the American Bankers Association, Kentucky, Alabama, Minnesota, and Arkansas also forbid statewide branching, except through acquisition. Arkansas, however, will allow branching beginning in December 1998. Montana and Nebraska forbid statewide branching in any form.

Mr. Embry said he wants to move his main office from DeKalb County into neighboring Gwinnett County, where he has no offices, because 45% of his customers are from there. Also, it is a growing county, he said - and a much more attractive market.

The OCC's approval, which is expected any day now, would provide national banks in Georgia with a clear advantage over state banks. As a result, the fiery debate in the General Assembly nearly every year on the issue would probably tilt toward advocates of allowing contiguous-county branching.

Last year's bill to allow branching into neighboring counties passed the state Senate by a comfortable margin but was shelved by the Georgia House. If passed in next year's session, which begins in January, it would take effect in July 1997.

"There's no question at all that this will have an effect on the way people look at" branching, said Edward D. "Jack" Dunn, the state's bank commissioner. "I would think that state banks would want to have the same privilege. Anyone interested in expanding is watching this."

Mr. Dunn said already about a dozen state banks in Georgia have threatened to convert to a federal thrift charter in order to rid themselves of the restrictions on state banks. If Embry National succeeds, the national charter would become another avenue to branch out of county, he said.

The Community Bankers Association of Georgia, however, has protested Embry National's application. Its main point concerns the bank's intentions to turn its original headquarters in DeKalb County into a branch, after moving its main office to Gwinnett County.

The association is arguing that the federal law does not apply to intrastate moves. Also, state law forbids a bank from retaining its offices in a county from which it has moved.

"A state bank can move 30 miles if it gives up its original office," said Julian Hester, executive director of the association. "But that's not what they want to do."

Mr. Hester denied that Mr. Collins, who had been president-elect of the association for next year, withdrew his nomination because of the Embry case.

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