[Congressional Record Volume 141, Number 6 (Wednesday, January 11, 1995)]
[Extensions of Remarks]
[Pages E83-E84]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                      INTERSTATE BANKING REVISITED

                                 ______


                           HON. BILL McCOLLUM

                               of florida

                    in the house of representatives

                      Wednesday, January 11, 1995
  Mr. McCOLLUM. Mr. Speaker, last year, Congress enacted the Riegle-
Neal Interstate Banking and Branching Efficiency Act of 1994. This was 
certainly one of the Banking Committee's most important 
accomplishments. One provision in the interstate law, the applicable 
law provision, generated considerable discussion by the conference 
committee.
  The applicable law provision is relevant when a national bank 
branches into a second State. With respect to four kinds of State laws 
specified in the statute, the branch is subject to State law as if it 
were a bank chartered by the host State, unless the State law is 
preempted. However, we were clear in the language of the statute and 
the legislative history that the applicable law provision in the 
interstate law applies only when a bank actually has branches in a 
second State. If a bank does not branch into a second State, the 
applicable law provision does not come into play.
  Another provision of the interstate law, the savings clause of 
section 111, is also important in this regard. The savings clause 
provides that nothing in the interstate law affects section 85 of the 
National Bank Act and section 27 of the Federal Deposit Insurance Act. 
These provisions, as we explained in the legislative history, authorize 
banks to make loans, including interstate loans, and the savings clause 
therefore preserved the preexisting lending authority of banks to 
collect all lending charges, without regard to the changes in branching 
authority made by the interstate law.
  I believe it is important to reemphasize these points as courts, 
regulators, and others interpret the applicable law provision and other 
parts of the new interstate banking law. It has come to my attention 
that a State court in Pennsylvania recently interpreted the applicable 
law provision in a decision concerning whether a national bank located 
in Ohio was authorized by section 85 of the National Bank Act to 
collect certain credit card charges from Pennsylvania residents. I 
would certainly hope that all courts recognize that the applicable law 
provision has no bearing on or relevance 
[[Page E84]] to a case in which a national bank has no branches in a 
second State.


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