Banks in Georgia have now found another way to get around their state's restrictive intrastate branching laws.
Embry National Bank of Atlanta last week received approval from federal regulators to move its main office across a county line, using the controversial "30-mile rule."
"It was one of the most watched transactions that I've seen in some time," said Joe Brannen, president of the Georgia Bankers Association. "A lot of bankers are talking about it."
The approval last week by the Office of the Comptroller of the Currency, which was expected, is important because it could motivate state-chartered banks in Georgia and other restrictive states to convert to national charters in order to branch across county lines.
It could also bolster efforts under way to have Georgia's branching laws reformed.
Georgia and six other states still prohibit statewide branching except by acquiring a bank and then converting it into a branch.
The Comptroller's approval came over the formal protest of the Community Bankers Association of Georgia, which argued that federal law does not apply to intrastate moves and that Embry's plan would violate state laws.
Julian Hester, executive director of the Community Bankers Association, said it is "quite concerned" about the Comptroller's decision and is looking into the possibility of an appeal.
To get around the restrictive laws, other Georgia state banks in recent years have converted to thrift charters, which have nearly unlimited branching rights. A handful of other banks in Georgia have threatened to do this unless persuaded otherwise by state action on a branching.
A that would have allowed contiguous-county branching was shelved this year until the next General Assembly session, which begins in January.
"There is so much in the air over this that I think a lot of banks are taking a wait-and-see approach to get an idea of what sort of playing field everyone is going to be on," said J. Daniel Speight Jr., chief executive of Citizens Bank in Vienna.