Like most states, Illinois bars the door to commercial banks headquartered elsewhere unless they buy an existing Illinois charter.

But banks in the state say this policy actually inhibits them from expanding into neighboring states, and they are now lobbying to change it.

Some other states already do what Illinois is considering: let those from elsewhere enter without buying charters if their home states do the same.

Though the plan, which the Illinois Senate is weighing, would obviously invite competition into a state some observers say is on the verge of becoming overbranched, David E. Manning, the vice president for government relations at the Community Bankers Association of Illinois, said it would also open doors for Illinois banks.

“The goal is to allow smaller banks to branch into new market areas across state lines,” Mr. Manning said.

The 1994 Riegle-Neal Interstate Banking and Branching Efficiency Act authorized nationwide branching but left regulating the process to the individual states.

To get into Illinois now, an out-of-state bank must buy one that has been in business there for at least 5 years.

(Riegle-Neal does not apply to federal thrifts, which can branch across state lines without regard to entry rules. This is how Washington Mutual Inc. of Seattle got into the Chicago market last year without making an acquisition).

Only 18 states let out-of-staters branch in without buying an existing charter, and 14 of those require reciprocity, according to the Conference of State Bank Supervisors. For example, Michigan allows Ohio banks to branch in there without obtaining a charter because Ohio does the same for Michigan banks.

A regulatory relief bill Congress is debating would remove all restrictions on interstate branching, though most industry observers say it has little chance of passing this year.

If the proposed Illinois law passes, the state’s banks could branch into Ohio, Michigan, Pennsylvania, and Tennessee. Border states such as Iowa, Kentucky, and Indiana would be off-limits, because all prohibit out-of-state banks from entering without acquiring a charter.

Still, though the measure is a top legislative priority for the Community Bankers Association of Illinois and the Illinois Bankers Association, Mr. Manning said bankers are reluctant to talk about it for fear of tipping off competitors to which markets they are eyeing.

A spokeswoman at the $30 billion-asset Harris Trust and Savings Bank of Chicago, a division of Bank of Montreal, refused to discuss the Senate bill but said lack of reciprocity is one reason it had to buy rather than build when it sought to expand into Florida and Arizona.

Joyce Nardulli, the senior vice president for government relations at the Illinois Bankers Association, said the two trade groups collaborated on the bill and she is optimistic about its chances.

The Senate Financial Institutions Committee passed the measure 9-0; it is now on the Senate floor.

It includes an amendment worked up by the Illinois Bankers Association that would let banks less than 5 years old sell themselves to out-of-state banks.

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