To the Editor:

The Conference of State Bank Supervisors would like to expand upon its earlier comments on the OCC's approvals of "30-mile loophole" transactions over the objections of the states involved.

The March 13 edition of the American Banker reports three additional approvals over the objections of the state supervisors in Maryland, Texas, and Wisconsin. We found these approvals extremely disturbing in their disregard of states' interests and state law.

The Riegle-Neal Act was designed with great care to balance the interests of the federal government against the interests of the states. It achieves this balance by allowing the states to decide whether to "opt in" or "opt out" of interstate branching.

The Comptroller's actions in approving Bank Midwest's move over Kansas Commissioner Dunnick's objections, and now in approving these three additional moves, may well stifle state consideration of their options and upset the balance created by Riegle-Neal.

Further "30-mile loophole" approvals that override explicit state regulatory and statutory objections may reduce the options available to states that choose to allow interstate branching before June 1, 1997 and invalidate state decisions to opt out of interstate branching.

In enacting Riegle-Neal, Congress paid considerable deference to states' authority over their own banking structure. The OCC should do no less, implementing Riegle-Neal not only in letter, but also in spirit.

State bank supervisors understand that, whether states opt out or opt in, we are reinventing the structure of the banking industry in the United States. We share the Comptroller's goal of promoting a safe and sound banking system that is competitive and responsive to the communities it serves.

Riegle-Neal gives each state the opportunity to decide whether interstate banking or interstate branching is the most effective system for meeting this goal, and to opt into or out of interstate branching accordingly.

The Comptroller can respect this process by consulting with the states concerned before approving further moves under the 30-mile loophole. We look forward to working with the OCC and all the federal agencies to adapt our dual banking system to this new environment.

James A. Hansen

Chairman, Conference

of State Bank Supervisors

Washington

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