Geographic barriers continue to disappear for U.S. commercial and savings banks. June 1, 1997 was the federal trigger date for interstate branching under the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994. Many states had already adopted interstate branching in advance of this date. In addition, use has been made, especially recently, of the OCC's "30-mile rule," which has long been available to national banks as an avenue for branching across state lines. In this issue of Massachusetts Banking Trends, we look at Massachusetts's current interstate banking activity, focusing on which banking organizations headquartered outside the region have entered Massachusetts already, through subsidiary banks or branching, and where banks headquartered in the region are conducting their out-of-region efforts. We also look at interstate branching activity within the region (Chris, DeSimone, Tyson, 2001).
Many bank holding companies operate banks in more than one state, primarily as a result of regional compacts for interstate banking developed mainly in the 1980s. However, Massachusetts to date has seen only limited entry from out-of-region bank holding companies and even less ownership by Massachusetts holding companies of U.S. banks outside the Massachusetts region. For banks headquartered in the region, the external focus has been more global than national (Corinne, 1996).
As of December 31, 1996, there were nine bank holding companies operating banks both within and outside Massachusetts, three headquartered here and six headquartered elsewhere. (In total, 22 multi-bank holding companies operated 55 commercial and savings banks in Massachusetts at the close of 1996. Sixteen of the 22 multi-bank holding companies were headquartered in Massachusetts, while six were headquartered elsewhere. Besides these multi-bank holding companies, one of Massachusetts's largest banks has a substantial global financial presence but operates just one bank. The six "outsiders" were operating banks in the region with assets totaling 12 percent of Massachusetts's commercial and savings bank domestic-office assets (Corinne, 1996).................
