WASHINGTON — A SAFER and more convenient - but more concentrated - banking system is expected to result from interstate banking legislation that has cleared both the House and Senate.
``This bill will increase the safety and soundness of our banking system and reduce risk to our bank deposit insurance fund and, in turn, the American taxpayers,'' said Sen. Donald Riegle (D) of Mich., chairman of the Senate Banking Committee. Senator Riegle said the measure will allow banks to more easily diversify their lending geographically. That will make them less vulnerable to failure and less likely to cut their lending because of a regional downturn.
The 60 million people who live in border areas and the 4 million who commute to work across state lines would be able to establish bank accounts in their home states and make deposits and cash checks in branch offices in nearby states, said Sen. Christopher Dodd (D) of Conn.
The Senate approved its version of the bill Tuesday; the House approved its bill on March 22. A compromise bill may be reached by May 30.