Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994

The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 [IBBEA] amended the laws governing federally chartered banks in order to restore the laws' competitiveness with the recently relaxed laws governing state-chartered banks. The goal was the return to a balance between the benefits of a state bank charter versus a federal bank charter. Among other notable changes, the Act stipulated that a federally chartered bank wishing to expand must first undergo a review of its Community Reinvestment Act compliance.

Three sections of the IBBEA address and expand the Community Reinvestment Act.

In section 107 ("EQUALIZING COMPETITIVE OPPORTUNITIES FOR UNITED STATES AND FOREIGN BANKS"):

In section 109 ("PROHIBITION AGAINST DEPOSIT PRODUCTION OFFICES"):

Section 110 ("COMMUNITY REINVESTMENT ACT EVALUATION OF BANKS WITH INTERSTATE BRANCHES") amends the Community Reinvestment Act itself to include a new section regarding the method of evaluating the compliance of banks with branches in more than one state.

Newly formed firms used less outside debt financing and invested less, suggesting that greater banking competition increased financial constraints for these firms. These effects diminished and ultimately reversed as firms aged.

http://www.ct.gov/dob/cwp/view.asp?a=2235&q=297892

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