Texas' bank commissioner last week rejected a legislative proposal by the Texas Bankers Association that would clarify and limit her ability to make regulatory policy for state-chartered banks, setting the stage for a court or legislative battle.

The development came after a month of heated back-and-forth maneuvering over interpretation of the state's "wildcard" statute, which gives state-chartered banks the same rights and privileges as national banks operating in Texas.

Many bankers who run state-chartered institutions believe they, therefore, automatically have the same powers as national banks in the state. But the bank commissioner disagrees, saying she must approve any banking practice not allowed by state law, even if it is permitted to national banks.

This month, after Bank commissioner Catherine Ghiglieri rebuked the bankers association, its board backed off from seeking a declaratory judgment in state court. Instead, it sought a more indirect line of attack - putting forward a bill for the upcoming Texas legislative session that would clarify the wildcard law's meaning.

Association President Robert Harris said the organization presented the proposed legislation to Mrs. Ghiglieri last week "to give the commissioner an opportunity to respond"

Association representatives late Friday said the commissioner had "rejected outright" the proposal. The group's board, according to sources, is again considering suing the commissioner

Sources said the association had decided to take the less confrontational approach after Mrs. Ghiglieri expressed "extreme perturbance" at being left out of the association's decision to challenge a basic tool in her policy-setting arsenal.

"She felt that she's bent over backward to get bankers involved in her decisions," said a banker familiar with the controversy. "She was mad because they didn't give her the same consideration."

The law at issue is a 1984 amendment to the state Constitution that gave state-chartered banks the same rights, powers, and privileges as nationally chartered banks in the state. Though the amendment's language appears straightforward, the Texas bank commissioner has always deemed it to be permissive," meaning that state-chartered banks can exercise national bank powers only with the commissioner's approval.

In practice, moreover, Mrs. Ghiglieri and her predecessor have required, with some exceptions, a 6% equity capital ratio for state banks, a ratio higher than that required of national banks.

In another instance, one that sparked the recent move to clarify the wildcard law, Mrs. Ghiglieri this year wrote mortgage warehousing rules. Several state-chartered banks involved in the business, wherein a bank funds mortgages for a mortgage banker before they are sold on the secondary market, bristled at the practice's being regulated when national banks in the state need not operate under the same rules.

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