Assessing a Decade of Interstate Bank Branching
Board of Governors of the Federal Reserve System
Christian A. Johnson
University of Utah College of Law
FRB of Chicago Working Paper No. 2007-03
U.S. banking regulation has historically prohibited the ability of a bank to open or own a branch located outside of its home state, commonly referred to as interstate branching. Only since the passage of the Riegle-Neal Interstate Banking and Branching Efficiency Act (IBBEA) in 1994 have banks have been able to engage in interstate branching, though subject to state restrictions. Despite IBBEA's removal of branching barriers, it still allowed the states to impose restrictions on the entry of out-of-state branch offices. This article describes the changes in Federal and state interstate branching law since passage of IBBEA and reviews how initial (1994-1997) and evolving (1998-2004) interstate branching laws affect out-of-state branch growth. It concludes that anticompetitive state provisions restricted out-of-state growth when those provisions were more restrictive than the provisions set by IBBEA or by neighboring states.
Number of Pages in PDF File: 46
Keywords: Riegle-Neal Interstate Banking and Branching Efficiency Act, interstate branching, out-of-state entry
JEL Classification: G11, G28working papers series
Date posted: April 20, 2007
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