Setback Puts Okla. Foes of Interstate on Defensive

Opponents of interstate branching in Oklahoma are fighting an opt-in bill instead of pushing for an opt-out law, as they had hoped to do.

A bill that would have let Oklahoma opt out of the interstate branching provisions of the Riegle-Neal Interstate Banking and Branching Act was dropped from consideration in the state Senate last week when it became clear it wouldn't make it to the floor for a vote.

But a bill for early adoption of the federal law's interstate branching provisions has passed the state House and is still alive in a Senate committee, where the Community Bankers Association of Oklahoma hopes to kill it.

"The more information that gets out about this issue, the less likely the (opt-in bill) will be successful," said James McKeown, executive manager of the community bankers group.

"The way it stands right now, we have the votes in the Senate," said Roger Beverage, president of the Oklahoma Bankers Association, which supports opting in early. "We've done our homework, and we think it will pass."

Failure of the opt-out bill in Oklahoma is more evidence of the flagging fortunes of interstate branching opponents in the Southwest. This month, Colorado Gov. Roy Romer vetoed his General Assembly's opt-out bill.

Texas, Missouri, New Mexico, and Montana also have opt-out bills pending. Kansas and Nebraska legislators are expected to debate opt-out bills next year.

Mr. McKeown said that, if the opt-in bill fails, his group would sponsor another opt-out bill next year. If opt-in does pass, however, it likely cannot be repealed, he said.

The failure of the opt-out bill, after several months of heated debate and often conflicting interpretations of Riegle-Neal in Oklahoma, was a victory for the Oklahoma Bankers Association.

Mr. Beverage was the first interstate branching proponent to call into question the ability of a state to "opt back in" once it had opted out of Riegle-Neal. Mr. McKeown said the Oklahoma Bankers Association's raising of the opt-back-in question confused the public and pressured legislators to act.

"It definitely contributed to the fast-track momentum in the decision- making process," he said.

Their conflict on this issue has effectively ended any hope of cooperation between the associations in Oklahoma. The two banking trade groups had initially agreed to offer a branching-neutral banking bill this year, but the truce broke apart in January.

The Oklahoma opt-in bill would let banks branch across state lines in July 1996, a year before Riegle-Neal takes effect.

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