Once Again, Illinois State Banks Must Publish Their Call Reports

Bested in a battle with the press, Illinois' state-chartered banks must go back to running their call reports in local publications - even though their national counterparts no longer have to.

"So much for parity," said Richard Luft, Illinois bank commissioner.

Last September Mr. Luft decided not to enforce a state law requiring banks to publish the reports. He acted days after President Clinton's signing of the interstate banking law freed national banks from a similar requirement.

But this week Mr. Luft reversed himself, after the Illinois Press Association and the Chicago Daily Law Bulletin, in which most Chicago-area banks publish their reports, sued him to enforce the law.

He said he would notify the 700-plus state banks that they again must publish call reports.

Since Illinois, like many other states, has a "wild card" statute establishing regulatory parity between state and national banks, community bankers thought their days of ponying up money for the advertisements were over.

Though the cost is relatively small, banks have argued that placing the ads offers little benefit to anyone.

Merle Schweineke, chief executive officer of $15 million-asset State Bank of Allerton, spends about $460 a year to publish call reports. It's not much, but "it's another expense," he said. "I feel we should be treated the same as national banks."

William J. Hocter, executive vice president of the Illinois Bankers Association, said one of its fundamental policies is "that we like to seek parity between the two different types of charters." He added that thrifts and credit unions also don't publish statements of condition.

Legislative efforts to repeal the requirement in the state law failed this year. A bill passed the state Senate but never was voted on in the House, in part because of opposition from the Illinois Press Association.

In May, Attorney General Jim Ryan issued an opinion that the commissioner did not have the authority to relieve state banks of duties imposed by statute.

"I intend to comply with the law," Mr. Luft said this week. "We thought, based on the wild card, that we had the authority to do otherwise."

It's upsetting, he added, when "the reason for not having parity is to satisfy the financial purse of one or two publications."

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