For 10 years out-of-state banks have been able to enter Washington State without buying a bank there or applying for a commercial charter first - even though most come from more stand-offish states.

That is not fair, Washington bankers say. They are now urging lawmakers to forbid out-of-staters from branching in unless their own states make it equally easy.

The Washington Bankers Association is supporting several bills introduced last month in the state Legislature that aim to close loopholes in its interstate branching law.

James Pishue, the president and chief executive of the Washington Bankers Association, said that since 1995, 10 banks headquartered elsewhere have obtained a Washington mutual thrift charter (which is much easier and less expensive to get than a commercial charter) and immediately merged the thrift branch into their commercial operations.

"These bills would end this loophole and put our banks on an equal footing with out-of-state banks," Mr. Pishue said. "We'll gladly let you come here, as long as you allow us to go there."

The bills would let an out-of-state bank open a new branch or buy a branch of a Washington bank only if its headquarters state permits Washington banks to enter it under the same terms. The bills are being considered by House and Senate committees; the legislative session ends April 21.

Branching reciprocity laws are a result of the 1994 Riegle-Neal Interstate Banking and Branching Efficiency Act, which authorized nationwide branching but left regulating the process to states. The federal law does not apply to federal thrifts, which can branch across state lines without regard to entry rules.

None of the 18 states with similar laws border Washington, according to the Conference of State Bank Supervisors. And Washington's neighbors in Oregon are fine with the status quo there; Oregon law bars out-of-staters unless they buy a bank.

Michael V. Paul, the chairman of the Oregon Bankers Association, said regulators had considered proposing a reciprocity measure, but last year bankers made it clear that they do not want one - so the issue has been tabled for now. The concern is that a reciprocity law would deflate the premiums Oregon banks command from out-of-state acquirers, he said.

"We usually support a more laissez-faire attitude toward competition, but this issue has a lot of unanswered questions that could dramatically change the playing field," said Mr. Paul, who is also the president of private-client services at Umpqua Bank, a unit of the $4.9 billion-asset Umpqua Holdings Corp. in Portland, Ore.

Indiana has had a reciprocity law on the books since 1996. Though there are no statistics on whether the law has caused deal prices there to drop, anecdotal evidence suggests that premiums may have been reduced somewhat, said Kirk J. Schreiber, a senior bank analyst at the state's Department of Financial Institutions.

"Premiums generally reflect what the fair market value is," Mr. Schreiber said. "If banks are really wanting to get into the state, they'll pay those premiums.

"However, banks in states that don't have reciprocity laws could be paying higher premiums if they want to get into states like ours."

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