EARTH SHOE STORE 474-1895 1610 Lavaca Austin, Texas 78701 THE COMMODORE HOTEL On Capitol Hill . Owned by Texans. Run by a Texan. 520 N. Capitol St., NW Washington, D.C. 20001 . ok. tVeltg VS 19′–‘7 ost eV’s c`k t sic.c” coc Ctee 40’e 30 The Texas Observer Metropolitan Life 43 Potent Protection Wes Seeliger Houston, Texas Branching.. ‘from page 2 fore the rise of holding companies, the correspondent relationships Texas banks had with one another allowed the pooling of big loan money: the merging of banks into single, powerful holding companies has never been necessary. Second, until this decade, Texas simply did not have the high level of bank deposits these big loans required. Third, bankholding com panies do not create new deposits, they merely exert control over existing bank wealth. Forth, the 1973 study in Love’s vest pocket is already out of date. Cur rent estimates are that these much discussed 42 corporations do at least half their banking business in Texas, and for reasons that have nothing to do with bankholding companies. But all is not lost. Though you’d never know it from the pace of local bank acquisitions, the constitutional prohibition against branch banking still exists. The problem has been that those who should enforce the 101-year-old banAtty. Gen. John Hill and banking commissioner Robert Stewarthave not seen fit to face the fact that at least some of the state’s largest bankholding companies run branch banking systems. What the companies have concentrated, the attorney general \(with maybe a push from the by enforcing the law. Far from weakening Texas banking, a holding company breakup would make for more competition and efficiency. A bank now controlled by a holding company would still be open for business, but no longer under the corporate thumb of far-off interests. John Hill told the Observer that “If any citizen had a complaint that tended to show that bankholding companies dominate their subsidiary banks, I wouldn’t hesitate to develop the matter.” The Observer hopes Hill’s word is good on this one. It seems to us that Tim five-month investigation of the bankholding company movement in Texas, is all the AG needs to get started. J.H. of power between the big and little bankers. Both IBAT and TBA supported the measure, and it passed easily. HB 991 might halt the practice of buying a bank with loaned money and then borrowing more from the newly acquired bank to purchase a second bankall without making an investment in either institution. If the avalanche of publicity on “rent-a-banks” hasn’t discouraged freewheeling stockholders, the requirement that buyers disclose the loans that they have taken out to buy their shares should. \(A bonus in this bill for press and public: those who wish to purchase 25 percent or more of a bank’s stock will be listed in the Texas Register, whether the commissioner approves the sale or not, thus shedding some sunlight on these On balance, the Legislature reduced the chances independent bankers may have had of making a go of it against the sprawling outfits that are steadily taking charge of Texas banking. More damning, there was no sign by any of the 181 members that they even understood the nature of the struggle for banking control. Contributing editor Jo Clifton is an Austin-based freelance writer.
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