Interstate Banking

Federal Reserve Board Chairman Paul A. Volcker said Wednesday that Congress should approve interstate banking but with safeguards to ensure that big banks do not take over the industry and squelch competition. Volcker said Congress needed to act because state lines could no longer contain the industry, which is using technological advances, regional compacts and loopholes in the law to extend services over once-rigid geographic boundaries.

Norman Barker Jr., a top executive with First Interstate Bank of California and, before that, United California Bank, from the 1960s until the mid-1980s, died of natural causes Saturday at his Los Angeles home, said family spokeswoman Elizabeth Douglass. He was 88. Barker was involved in two landmark Los Angeles projects. He spearheaded construction of United California Bank's 62-story downtown Los Angeles headquarters, which was the tallest building west of Chicago when it opened in the mid-1970s.

In reference to your article (July 28) on interstate banking legislation: Interstate banking is already here, despite what California laws say. Efforts to stall legislation opening up California's borders simply ignore this reality. The California Bankers Assn., representing virtually 100% of California's banks, supports legislation that sets a timetable for transition to national reciprocal interstate banking. We believe--and studies conducted prove--that interstate banking presents opportunities, both for California banks wishing to expand out of state, and for consumers who benefit from competitive prices and new products and services.

In the end, Bank of America won--at least in name. The bank created Wednesday by the merger of BankAmerica Corp. and NationsBank Corp. will carry the Bank of America moniker, as will its network of 5,000 branches coast to coast. "We share a vision . . . starting today, we share a name," said Hugh McColl, who headed NationsBank and who now heads the merged banks' holding company, which also retains the BankAmerica Corp. name.

Federal Reserve Chairman Paul A. Volcker won some support in seeking legislation to clear up confusion in the banking industry, but his call for interstate banking authorization was opposed by Sen. Jake Garn (R-Utah), chairman of the Senate Banking Committee. "There ain't no way we're going to put that provision in this bill," said Garn, referring to a measure before the panel. Interstate banking is prohibited by federal law, except where individual state laws endorse it.

A Bush Administration proposal to permit full interstate banking within three years narrowly survived a key test in the House Banking Committee on Tuesday. The panel rejected on a 26-23 vote an amendment that would have allowed states to block branch offices from out-of-state banks. Then, on a 25-24 vote, it defeated an amendment by Rep. Jim Leach (R-Iowa) that would have offered interstate banking only to the strongest banks. The first amendment, a combination of proposals offered by Reps.

Treasury Secretary James A. Baker III today endorsed a shift to nationwide interstate banking in mid-1990, but without the tight restraints on bank mergers approved by a House committee. Members of the Senate Banking Committee told Baker that they will continue to fight any move that goes beyond the Supreme Court's decision Monday that allows states to join regional banking compacts that exclude other states.

Congress took a major step toward approving full interstate branch banking Wednesday, which could significantly alter the structure of the American banking industry. The vote by the House Banking, Finance and Urban Affairs subcommittee on financial institutions represented one of the first major victories for the Bush Administration in its campaign to push a sweeping banking reform plan through Congress.

The California League of Savings Institutions said it will oppose efforts to establish national reciprocal interstate banking in California. Instead, the trade group will support legislation pending in Sacramento to authorize interstate banking involving the institutions in nine Western sates. Gerald D.

A landmark bill permitting U.S. banks to operate branches across state lines, which President Clinton signed into law on Thursday, could have numerous implications for consumers. Experts do not expect dramatic changes because interstate banking, in which bank holding companies own banks in other states, is already a fact of life in many states. But the law will expand interstate banking to the few states that currently do not allow it.

In a sign of worsening troubles for the beleaguered Santa Margarita Co., First Interstate Bank has filed a foreclosure suit on two partnerships developing homes on its South County land. Filed in Orange County Superior Court, the suit claims a partnership with Fieldstone Homes in Newport Beach failed to make a payment on a loan, of which only $5.6 million remains, for a $94-million project.

Chief executives of the nine independently owned banks in Ventura County said Wednesday that they anticipate a windfall of business from the proposed merger of Wells Fargo & Co. and First Interstate Bancorp. The $11.6-billion deal would lead to a huge change in the way many Californians do their banking. But as local banks learned following the 1994 merger of Oxnard-based Bank of A. Levy with First Interstate, bigger does not always mean better.

An extraordinary four-day public hearing session that federal regulators are convening in Los Angeles and San Francisco today could mark a last stand for First Interstate Bancorp in its struggle to resist an $11-billion hostile takeover by upstate rival Wells Fargo & Co. Executives of First Interstate and its would-be rescuer, First Bank System Inc. of Minneapolis, worked through the weekend on two fronts, sources said.

In a move that angered officials in several states, the Office of Thrift Supervision on Friday approved BankAmerica's application to open savings and loan offices in every state where it doesn't already have a presence. The approval was expected, but it came over the objections of state regulators in Wyoming, Maine and New Hampshire, who called it an end run around federal laws that they say are intended to give the states authority over interstate banking within their borders.

Making its unwelcome takeover bid for First Interstate Bancorp even more hostile, Wells Fargo & Co. on Monday raised its offer and took action on several fronts to try to force First Interstate to accept the deal. The new Wells Fargo bid is valued at $10.6 billion at Monday's closing stock price, $2.45 per share more than the $10.4-billion competing offer from First Interstate's "white knight" suitor, First Bank System Inc. of Minneapolis. The next move is uncertain.

Hoping to map out the first truly nationwide branch network before Congress changes the rules, BankAmerica Corp. is asking federal regulators for permission to open savings and loan offices in every state where it doesn't already have a presence. San Francisco-based BankAmerica, the nation's second-largest banking company, has filed applications with the Office of Thrift Supervision to open a total of 285 branches of its thrift subsidiary--Bank of America, FSB--in all 50 states.

The titans of East Coast banking have long battled California's entrenched and competition-wary banking industry in an unsuccessful effort to penetrate the deposit-rich Golden State. After nearly a decade of protectionist battles, however, California's big banks have suddenly abandoned the fight, endorsing legislation that, for the first time, would open the state's borders to the likes of Chase Manhattan, Citicorp and other Eastern financial giants.

Wells Fargo & Co. on Monday turned up the heat on its takeover target, First Interstate Bancorp, announcing that it will seek clearance under federal antitrust law to start buying First Interstate stock.

Three men armed with semiautomatic pistols robbed the First Interstate Bank branch on Wendy Drive in Newbury Park on Monday morning. Two men jumped over the bank counter and forced several employees into the safe while the third man kept about a dozen customers and employees on the floor, FBI Agent Larry Dick said. They fled the site in a stolen station wagon with an undisclosed amount of cash from the vault. The robbers switched cars a few blocks away, Dick said.