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Sharing Between States

Branching

CBCTS are not branches and may be placed w/out geographic restrictions

Prohibited

Electronic facilities are not branches

AIM INTERCHANGE

State

Sharing within State

3) If a mutual savings

bank, S&L or credit
union decides to share
w/one or more commer-
cial banks, it is not
required to share w/
any other

West Virginia

1) Mandatory sharing bet

ween banks w/ off

premise CBCTS
2) Permissive sharing bet-

ween banks & other fed-
erally insured institu-
tions (w/their prin-
cipal office in w)
once so shared, they
must be shared w/all
such institutions

requesting access
3) Once a bank allows any

institution to share,
an access interchange
system has been
estab'd. Any other w
institution must be
allowed to join the
system

Wisconsin

1) Mandatory sharing bet

ween like institutions
w/their principal place

of business in WI, or
2) by any other like

institution obtaining
the consent of a like
state or nat'l institu-
tion (w/its principal
place of business in
WI) and which is using

the terminal, and
3) Such facilities must be

shared w/any unlike
institution whose home
office is in WI and who
request access

Wyoming

No statutory branching provisions

Senator GORTON. Thank you, Mr. Elliott.

Mr. Brandel, the tone of your testimony suggested that you might favor outright repeal of the McFadden Act and the Douglas amendment. Do you think that congressional freeing of ATM networks from Douglas and McFadden should be made contingent on some limitation of the machines' capabilities, for example, the check and deposit acceptance?

CBA FAVORS COMPETITIVE FREEDOM

Mr. BRANDEL. I think the Consumer Bankers Association's longrange position is that competitive freedom ought to be the rule in this country and there ought not to be limitations functionally or locationally on bank service facilities.

Senator GORTON. Other witnesses who testified here today indicated a concern that S. 2898 opens the door to full interstate deposit taking. Your testimony, on the other hand, takes the view that the bill is silent on the issue. Can you elaborate on your lack of concern over whether or not there's an inadvertent approval given to interstate deposit taking which is now prohibited by many State laws, or is it simply because you would favor that in any event?

Mr. BRANDEL. No, it's the former, and I think this point was made by several other persons as well, Senator Gorton. The issue of whether individual States can prohibit a given function as opposed to the establishment of a facility is very unclear, a very murky area of the law.

At the moment, some States clearly prohibit of banks located outside that State from accepting deposits in the State, no matter how they go about doing it. Now whether that kind of law would survive a constitutional challenge, for instance, in the case of national banks, is unclear.

The position of the Consumer Bankers Association is that Senator Trible's bill does not deal with that issue. It certainly doesn't make the issue more cloudy. It doesn't really give national banks a step up in arguing that Congress has taken a position on that issue. The Consumer Bankers Association's position simply is that that's an issue that needs be taken care of in another forum at another time.

Senator GORTON. Mr. Hamlin, how many national banks are members of the Independent Bankers Association of America and how many of the Independent Bankers of New York?

Mr. Hamlin. I can't answer that question with respect to IBAA. There are 400 national banks in New York. Virtually all smaller banks are members of the Independent Bankers of New York and we are evenly split, about 40-60, national banks. Ironically, I'm a national bank as I appear here.

IBAA MEMBERS HOLD SAME VIEWPOINT

Senator GORTON. Is there any divergence from the viewpoint of the national bank members of the IBAA and State bank members of IBAA about the issues about which you've testified?

Mr. HAMLIN. I'm not aware of it in the materials that I'm familiar with and I subscribe to their services and so forth. We have about 2,500 national banks in IBAA, I have just been informed.

Senator GORTON. There would be no difference in their views between national bank members of IBAA and State bank members of IBAA on the subject about which you've testified?

Mr. HAMLIN. No. And the reason for that is that there be a status quo between the two. Our position, as stated, preserves the status quo, both in New York and other places where States have spoken as to the location of branches and incidentally of automatic teller machines.

Senator GORTON. As I understand it, a number of the participants of shared ATM networks are savings and loans and credit unions. Would we have an unfair situation if current law limits banks but not those other institutions?

Mr. HAMLIN. I use the term status quo because that is the situation today. As we know, Federal savings and loans are facilities which are not branches and consequently are not affected by the branch laws, either State or Federal. So we are not changing anything here. They have the same flexibilities with respect to branching now as Federal savings and loans do.

Senator GORTON. You're not advocating any change in the law with respect to that?

Mr. HAMLIN. I'd love to have them be as restricted as we are but, of course, that's not going to happen. So I'm not being unrealistic.

Senator GORTON. Mr. Browning, at one point you emphasized very strongly two words in the proposed ABA statutory change which would allow national banks to compete to at least the same extent as others. Why are those words “at least” in there? Are you hoping that you might get more privileges for national banks?

NATIONAL BANKS SHOULD HAVE EQUAL RIGHTS Mr. BROWNING. No, that's not the intent at all. In fact, that could become part of the record also. The words “at least” in there is one possible means of bringing the symmetry of convergence of CSBS with respect to State banks versus national banks; not that national banks should have more, but they should have at least equal rights.

Senator GORTON. You note in your written testimony that every State allows its State-chartered institutions to participate in these interstate networks. If the Marine Midland case is affirmed on appeal, would it be possible for these State-chartered institutions to maintain their networks without national banks?

Mr. BROWNING. Well, one would have to study that question in more depth, but our reading of it is that they may continue to participate in these interstate networks where national banks would be precluded from participating in interstate banking.

Senator GORTON. Mrs. Cottrell, are you aware of any loss of business suffered by Plus System since the district court decision in Marine Midland at least that could be attributed to that decision?

Mrs. COTTRELL. I'm really not capable of discussing the loss of business to the Plus System. Mr. Browning may be able to give you some statistics on that.

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