Interstate banking has South Carolina's community bankers in the throes of a heated debate.

The bankers are arguing over a draft bill being pushed by NationsBank Corp. that would open South Carolina to nationwide. reciprocal interstate banking on July 1. 1996.

It also would reduce the amount of deposits a bank like NationsBank must keep in the Southeast compact to 5 1 % from 80%. according to the draft.

"I can't yet see where it [interstate banking] has done anybody any good," said Howard Elkins, chief executive of the Bank of Clarendon, Manning, S.C. "I want to see something that is good for South Carolina. I want to make sure it is good for the banking industry. They, haven't convinced me of that yet."

|Not a Big Issue'

Other community bankers don't care one way or the other whether interstate banking becomes a reality.

"It's not a big issue with us," said R. Thornwell Dunlap Jr., chief executive of the County Bank, Greenwood.

"We virtually have interstate banking already," said Leon Patterson, chief executive of Palmetto Bank, Laurens. "We have all of the players here. I don't know how, it could be more competitive."

NationsBank's Clout Doubted

Mr. Patterson added that NationsBank has no more clout in South Carolina than a bank from the West Coast.

"They have to compete with us right there on the corner of the square." he said.

South Carolina's General Assembly convenes in January. Sometime during that session it is expected to take up the interstate banking issue.

Earlier this year North Carolina's legislature voted to open the state's borders to nationwide reciprocal banking in July 1996.

Making the Case

Peter Davis, manager of state and local government relations with NationsBank, said the Charlotte, N.C.-based company is working with banking associations to help their members understand the issue.

"We think most community banks will ultimately see no problem with it," he said. "The focus is to expand the compact nationwide as 35 states have already done."

South Carolina's banking associations have been trying to figure out where they stand.

"We are still studying it," said Sally Tibshrany, a lobbyist with the South Carolina Bankers Association. "It is definitely a concern of many of our members."

Implications Studied

This week about 60 members of the Independent Banks of South Carolina met to study the specifics of the issue.

Kelly, Smith, executive director of the Independent Banks, said it will take weeks before the association finalizes its position.

Several weeks ago, Mr. Elkins attended a meeting held by the South Carolina Bankers Association where an official from NationsBank laid out the specifics of the bill. When it came time to argue against the legislation, nobody stood up, so Mr. Elkins took the floor and presented his side of the case.

Mr. Elkins doesn't think it's an ominous sign that bankers were mum.

"I think the majority of independent banks are against this bill," he said.

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