Despite opposition from many of the state's banks, Oklahoma lawmakers voted this week not to extend the state's strict branching laws.
A measure to continue the current law past June 30 failed in a state House committee and in the full state Senate. The expiring law forbids any state-chartered bank or thrift or any national bank from setting up more than three branches, though it can buy more.
The state's two older banking trade groups supported a bill that would have extended those restrictions for at least another year.
But a dissident group of 60 banks sought to end branching limits.
The legislative session closes at the end of May, and no alternative bills are known to be in the works.
"We got drubbed, big-time," said Roger M. Beverage, president and chief executive officer of the Oklahoma Bankers Association. "We have succeeded in alienating legislators because we made them choose between bankers in their districts."
Mr. Beverage said he hopes the industry will move past the branching issue quickly and come together on other legislative matters, such as defeating an effort to ban ATM surcharges.
"De novo branching has been an emotional issue forever," he said. "There are going to be some hard feelings, but hopefully we can reunite."