Illinois bankers support interstate de novo branching

Breaking with its 30-year history of working to limit branching by banks, the Community Bankers Association of Illinois is advocating legislation that would permit de novo interstate branching. CBAI membership voted in favor of the idea in a survey conducted by the association during January.

Should Illinois elect to adopt such legislation, it would become the 19th state in the country to permit banks headquartered in other states to open branches in Illinois if banks headquartered in Illinois are allowed to do the same. Indiana is the only state contiguous to Illinois that currently has such a reciprocity arrangement.

Of CBAI's 510 members, 302 responded to the January survey. Of the respondents, 258 banks voted in favor of de novo interstate branching. That constitutes 85.4 percent of the respondents and 50.6 percent of the association's entire membership. Forty-two banks (13.9 percent of respondents) voted against the measure.

CBAI bylaws regarding changes in the association's position on bank structure issues require a 60 percent consensus among 50 percent or more of the membership.

CBAI is working with the Illinois legislature to change the law. Bob Wingert, CBAI executive vice president, said the association has no interest in seeking changes to the 30 percent deposit concentration cap currently in place in the state.

The Illinois Bankers Association has supported the concept of de novo interstate branching for years.