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Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994

Riegle-Neal Act of 1994 (P.L. 103-328, 108 STAT. 2338).


The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 permitted adequately capitalized and managed bank holding companies to acquire banks in any state one year after enactment. Concentration limits apply and CRA evaluations by the Federal Reserve are required before acquisitions can be approved. Beginning June 1, 1997, the Act allowed interstate mergers between adequately capitalized and managed banks, subject to concentration limits, state laws and CRA evaluations. The Act also extended the statute of limitations to permit the FDIC and RTC to revive lawsuits that had expired under state statutes of limitations. State banking regulators signed a Nationwide Cooperative Agreement and Nationwide State/Federal Supervisory Agreement for the coordinated supervision of multi‑state, state‑chartered banks.

Key points:

  • Some states had been allowing their banks to branch interstate through interstate compacts.
  • In another attempt to level the playing field for National Banks when it comes to branching (see the McFadden Act) Congress enacted the Riegle-Neal Interstate Banking and Branching Act of 1994 to allow all FDIC insured banks to branch interstate (with some restrictions).
  • States were allowed to opt-in to allowing interstate branching (by June 1, 1997) or to opt out. If a state did not act, they were deemed to have opted in.
  • States were allowed to restrict de novo branching by requiring a bank to buy an in-state bank or branch with a minimum age of up to 5 years.
  • States were also allowed to set concentration limits on the amount of deposits a bank could own within a state.
  • Set a nationwide deposit cap of 10% (which a few banks are getting near).
  • In 1997, Congress amended the Riegle Neal Act (the Riegle Neal Amendments Act of 1997 PL-105-24) in order to give multi-state state chartered banks the ability to operate under a uniform law and to have a uniform footprint of products and services to the same extent that national banks enjoyed.

Why is it still relevant?

Riegle Neal still governs the interstate activities of both state and national banks. The Riegle Neal Amendments Act goes a long way toward granting multi-state state chartered institutions parity with national banks operating in more then one state.
Prepared by:
John "Buz" Gorman
General Counsel
Conference of State Bank Supervisors

Last modified at 4/18/2012 11:48 AM  by SHAHEEN, ROSEMARIE