How banking barriers have been coming down

In the last three years, the barriers to interstate banking have been breaking down at an increasingly rapid pace. Here, compiled by the staff of the Federal Reserve Bank of Chicago, is a partial chronology of the crumbling of these barriers:

March 1980. South Dakota passes legislation that allows out-of-state bank holding companies to move credit card operations to South Dakota. Three years later, the state passes a new bill that allows out-of-state bank holding companies to own state-chartered banks which can own insurance companies.

February 1981. Delaware passes an out-of-state banking bill that opens the state to major money center banks.

June 1981. Citibank establishes Citibank (South Dakota) NA in Sioux Falls to handle its credit card operations.

August 1981. Marine Midland Banks Inc., Buffalo, N.Y., infuses $25 million into Industrial Valley Bank & Trust Company, Philadelphia, by buying newly issued common stock and nonvoting preferred stock with warrants to buy an additional 20 percent of Industrial Valley's common stock, should interstate banking be permitted.

September 1981. United Financial Corporation, San Francisco, a subsidiary of National Steel and parent of Citizens Savings & Loan, acquires an S&L in New York and one in Miami Beach. The combined S&Ls later become First Nationwide Savings.

November 1981. Casco-Northern Corporation, Portland, Maine, parent of Casco Bank & Trust Company, sells First National Boston Corporation 56,250 shares of its convertible preferred stock and warrants to buy additional common shares. In March 1983, First National Bank of Boston Corporation agrees to acquire Casco-Northern.

December 1981. J. P. Morgan & Co. establishes Morgan Bank (Delaware), to engage in wholesale commercial banking.

December 1981. Home Savings & Loan Association, Los Angeles, acquires one Florida thrift and two in Missouri. In connection with the acquisitions, Home Savings & Loan becomes Home Savings of America.

January 1982. North Carolina National Bank Corporation acquires First National Bank of Lake City, Fla., by using a legal loophole in a grandfather clause.

January 1982. AmSouth Bancorp of Alabama, South Carolina National Bank Corporation, and Trust Company of Georgia plan to merge into a single holding company if and when interstate banking is permitted. Until then, each is buying

January 1982. Home Savings of America, Los Angeles, acquires five Texas savings associations and one in Chicago.

March 1982. Marine Midland Banks invests $10 million in Centran Corporation, Cleveland, in the form of newly issued nonvoting preferred stock and warrants to buy more than 2 million shares of Centran's common stock, should interstate banking be permitted.

June 1982. Alaska's new banking law permits out-of-state banks to acquire Alaska banks without the states of those banks enacting reciprocal legislation.

July 1982. New York legislation amends the state's banking law to allow out-of-state bank holding companies to acquire control of New York banks, provided the states of these banks reciprocate.

August 1982. The Federal Reserve Board and the shareholders of Gulfstream Banks Inc., Boca Raton, Fla., approve the acquisition of Gulfstream Banks by North Carolina National Bank Corporation.

September 1982. In the first reciprocal interstate bank acquisition between New York and Maine, Key Banks Inc. of Albany agrees to acquire Depositors Corporation of Augusta; the acquisition is expected to be completed by the end of 1983.

December 1982. The Federal Reserve Board allows Exchange Bancorp, Florida, to merge into North Carolina National Bank Corporation, and the Federal Reserve approves the merger of Downtown National Bank of Miami into NCNB/Gulfstream Banks Inc.

December 1982. Both houses of the Massachusetts legislature pass an interstate banking bill which allows Massachusetts banks to expand into other New England states on a reciprocal basis. The law is effective in 1983.