Senate approves branching bill allowing states more time to decide to participate.

WASHINGTON -- Nations-Bank lauded a Senate vote on Tuesday in favor of interstate branching, but consumer groups blasted the measure as one that would drain credit from low-income communities.

Between those extremes, once staunch opponents of interstate like the Conference of State Bank Supervisors praised lawmakers for amending the bill to give the states more time to decide whether to participate.

Under the Senate bill, branching will not be mandated until June 1, 1997. The House bill would permit banks to make acquisitions across state lines one year after enactment and to convert out-of-state banks into into branches six months later.

The two bills must now be reconciled into a single measure, probably by a House-Senate conference committee.

"The 1997 date will give assets much-needed time to adjust their banking and tax laws to the new structures of interstate branching," the state supervisors said in a statement. "The original two-year time frame would not have been adequate, particularly in those states where the legislatures do not meet every year."

Aslo approving of the measure was the American Bankers Association, which expressed relief that lawmakers had resisted the temptation to address unrelated issues in the bill.

National Data Only

In approving the branching measure, the Senate okayed an amendment that requires the General Accounting Office to report on data collection needs under interstate branching.

The provision was a watered-down version of a measure sponsored by Sen. Russell Feingold, D-Wis., that would have required banks to continue to report on 16 types of lending state by state. Under branching, interstate organizations will only have to provide national data.

"The problem is, the logical place to deal with the loss of data from branching is in the bill, not nine months later" when the GAO report is finished, said Deepak Bhargava, a lobbyist for the Association of Consumer Organizations for Reform Now.

NationsBank Corp., Charlotte, N.C., said the Senate bill "will make the U.S. banking system stronger and more convenient for all customers."

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