invite more hostile takeover attempts such as Wells Fargo's bid for First Interstate. Banks with high Community Reinvestment Act ratings would be exempt from rules requiring them to notify federal regulators before acquiring another bank, assuming there were no antitrust implications or other problems. In addition, banks that must obtain regulatory approval for acquisitions could deal with just one agency; they now must deal with two. Both of these changes would expedite the merger process, according to Karen Shaw-Petrou, president at ISD/Shaw, a consulting firm here that tracks legislative and regulatory developments. The lifting of any restrictions could entice bankers to consider hostile takeovers, she said. "The cumbersome nature of bank holding company approvals provides a significant level of defense," Ms. Petrou wrote in a company policy briefing. "Pending legislation could reduce this burden and, therefore, this protection." James McLaughlin, director of regulatory affairs at the American Bankers Association, said hostile takeovers have become slightly more common recently anyway. But he said drastic increases in unwelcome buyouts aren't likely, even if the relief bill should pass. Antitrust issues, stockholder approval, and defensive maneuvers by the sought-after bank are likely to keep a lid on hostile takeovers, he said. "It's not like when you take away unique prior application and approval rules, you're opening the way for hostile takeovers," Mr. McLaughlin said. "You're just putting the industry a bit more on par with other industries." But Cynthia Glassman, a consultant with Furash & Associates, Washington, said the arduous approval process sets banking mergers apart from those in other less-regulated industries, where hostile buyouts are far more frequent. Ms. Glassman said removing the time-consuming approval and application process would generally make for less resistance from outside sources. "Thus," she said, "hostile mergers may become more appealing."
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