While the rest of the country hops onto the consolidation bandwagon, some in the Lone Star State are intent on going the other way.

A bill introduced in the state House would turn back the hands of time by reestablishing unit banking.

Texas Rep. Pete Patterson, a Democrat, has offered a bill in committee that would require any bank branch with more than 25% of the total deposits of a county to convert to a separately chartered bank with a Texas resident at chief executive and a majority of Texans on the board.

"We feel it has a good chance of passing," Rep. Patterson said. "A branch of that magnitude should have to bear higher responsibilities to the community in which it is located."

John Heasley, general counsel of the Texas Bankers Association, which is opposing the Patterson bill, said such a law would face significant legal hurdles, not the least of which are the national-state charter parity law and the federal preemption doctrine.

There is no way a state can force the creation of a bank, Mr. Heasley said.

One thing is certain: The Texas Legislature has gained a reputation as the most bank-obsessed lawmaking body in the country.

In all, eight bills now under consideration would, if passed, deeply change the nature of banking in the state. In addition to the rewrite of the antiquated Texas banking code to opt out of interstate branching, there's the Senate bill to repeal the 155-year-old constitutional ban on using home equity as loan collateral.

Meanwhile, it looks as if the opt-out measure is assured of passage after a compromise reached in the Senate. The opt-out, with a new mandatory five-year sunset date, now has the unified support of both the Independent Bankers Association of Texas and the Texas Bankers Association, which had been at loggerheads over the issue.

All that aside, it has not been a good year for the regional banks doing business in Texas. U.S. Rep. Henry B. Gonzalez, D-Tex., in his words in support of the home equity ban, fairly summed up the feeling in the state capital in a recent St. Mary's Law Journal article:

"This cherished home equity protection has been under sustained attack for several years by a group of bankers and other financiers . . . Not surprisingly, this group is led by bankers from outside the state who have little regard for the unique history, traditions, and values of Texas and its citizens."

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"The Bankers are Coming! The Bankers are Coming!"

These words blared from the top of a press release from Equities magazine, a business publication, to announce a conference in New York on the topic of how insurance companies are going to deal with new competition from banks.

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