WASHINGTON -- President Clinton signed the interstate branching bill into law Thursday, flanked by two bankers who praised him for attacking what they described as outmoded banking laws.
"You recognize that the world is changing and laws passed in the 1920s don't work anymore," said Norwest Corp. chairman Richard M. Kovacevich.
Chase Manhattan Corp. chairman Thomas Labrecque said the bill, along with legislation implemenling new trade treaties, "shows a sustained commitment to make. the United States more competitive and effective in the global economy."
For his part, the President highlighted the measure as part of his continuing effort "to reinvent government," and promised more banking legislation to come.
"Our work is far from over," he told a group of lobbyists, regulators, lawmakers, and congressional aides who assembled for the ceremony in the Department of Treasury's ornate Cash Room.
The interstate branching bill, represents a significant victory for the banking industry and particularly for the trade groups and big banks that kept the bill alive when it appeared hopeless.
Moreover, the bill was kept "clean" free of the restrictions banks feared tlley would be saddled with. Of particular concern was an amendment restricting bank insurance powers and a measure expanding Community Reinvestment Act requirements.
"We said all along that if the bill included any negatives, we would fight it," said Edward L. Yingling, chief lobbyist for the American Bankers Association.
Meanwhile, to improve the consistency of interstate bank regulation, Comptroller of the Currency Eugene A. Ludwig appointed a task force Thursday to find ways to improve the agency's structure and information systems. Steve Weiss, deputy comptroller for corporate activities, will chair the seven-member group.
One year from now, banks will be able to make acquisitions in other states, even in jurisdictions that now bar out-of-state institutions. The law does not give states the right to refuse to participate in interstate banking.
On July 1, 1997, interstate organizations will be able to consolidate their holdings into a single branch network -- the interstate branching part of the bill.
The law does give states the right to opt out of interstate branching before the new rules take effect in 1997 by passing new laws or regulations. However, institutions based in jurisdictions that opt out will not be able to branch into other states.
Though the law was widely hailed, it includes minor provisions most banks opposed like requiring regulators to consult with community organizations before permitting an interstate organization to close a branch in a low-income area.