Michigan's community bankers are ready to take on all comers as the nation moves toward interstate branching.
Big and small banks alike are backing a proposal by the Michigan Bankers Association to push for early opt-in on interstate branching.
"I don't have a problem opting in early," said Richard Edgar, president and chief executive of $78 million-asset Kent City State Bank. "I don't really think that our biggest competition is from the big banks in New York and California and other states. Our biggest competition is credit unions and Merrill Lynch and those companies."
The trade group, which represents all of Michigan's banks, voted to opt in early to attract new main offices to the state, as well as to give banks already headquartered there another incentive to not move to another state with a better banking climate, said Robert Carr, president and chief executive of $85 million-asset Capitol National Bank, Lansing.
Michigan's financial institutions bureau has distributed an opt-in bill for comment, which could be introduced in the legislature this spring, said Mike DeFors, a vice president for government affairs at the trade group.
States that opt in early would move up the June 1997 effective date of the branching component of the Reigle-Neal Interstate Banking and Branching Act depending upon when they enact legislation.
Michigan community bankers say they already are accustomed to stiff local big-bank competition, including Comerica, NBD Bancorp, First of America Bank Corp., and Old Kent Financial Corp.
"It doesn't matter where you are in the state, you compete with them," said Mr. Carr, also the current president of the Michigan Bankers Association. "We've had strong competition from the larger financial institutions and we've been able to compete."
Things may not be as smooth in North Dakota, where bankers still are wrestling with the interstate issue.
They want to avoid a repeat of 1991, when the state's two bank trade groups fought over state interstate legislation.
"It was a bloodbath," said Arlene Melarvie, executive director of the Independent Community Bankers Association of North Dakota. "I don't want to go through that again."
The trade group has introduced four interstate-related bills, including one to opt out to buy time, since the state doesn't yet have intrastate branching ability.
Ms. Melarvie's group and the North Dakota Bankers Association had planned to support opt-out legislation, since they had little time to deal with interstate this year, have no 1996 legislative session, and were unsure if the 1997 session could deal with it in time.
But if the legislature, which meets for only 60 days every two years, waits until 1997 to address interstate, it would not be able to implement ensuing laws until after the federal's law's effective date, said James Schlosser, executive vice president of the North Dakota Bankers Association.
Thus, bankers now await a decision from the state's attorney general on whether legislators in 1997 could use a majority vote on an emergency measure to push up the effective date on interstate legislation. Emergency measures usually require a two-thirds vote.
If the 1997 vote change is authorized, the independent bankers group will abandon its opt-out bill this year, Ms. Melarvie said. However, "If there's doubt on this action, we're going to go back to fighting for the opt out," she said.
North Dakota community bankers also face a bill backed by First Bank System to opt in early with no restrictions.