HARRISBURG, Pa. - Pennsylvania Gov. Tom Ridge signed legislation authorizing full interstate branching for the state's 290 financial institutions two years before the federal law takes effect.

The opt-in legislation, which took effect immediately, allows out-of- state banks to branch into Pennsylvania either by buying an existing bank and converting it into a branch or by setting up a new branch from scratch. The law requires reciprocity from the other state until June 1, 1997.

The law also allows the Keystone State's state-chartered banks the same rights as federally chartered banks to branch into other states that allow interstate branching.

The new law is authorized under the Riegle-Neal Interstate Banking and Branching Efficiency Act, which authorizes full interstate banking by Sept. 30, and interstate branching by June 1, 1997.

Under the federal law, states may pass legislation to opt-out of interstate branching or opt-in early, as Pennsylvania did. States must also pass legislation to allow their state-chartered institutions the same powers as federal institutions and to allow de novo branching across their borders.

So far, about 14 other states have opted-in to interstate branching, including Pennsylvania's neighbors Maryland and Delaware. Bills are pending in New Jersey and New York.

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