Will statewide banking come to Pelican State?
This may be a big year for change in Louisiana's banking industry, at least on the legislative front. Banks here are truly parochial, in a literal sense; that is, limited to a single parish (county). This is one of just a handful of states left that don't have some sort of statewide banking, by means of branching or multibank holding companies.
But Louisiana banks have also been charged with being parochial in the other sense, too, thereby holding back the state's economic development. That parochialism may require more than legislative action to remedy.
The Association for Competitive Banking is hoping to get through the Legislature this session a bill allowing banks to go statewide by means of multibank holding companies.
ACB's assumption has been that this method would be less obnoxious to small independent banks than allowing de novom branching by bigger banks.
If a big bank can move into an area only by acquisition, the smaller banks already there retain a certain measure of control. They can either hold out and say no, or sell out and make a tidy profit.
The ACB strategy seems to be paying off; some of the country bankers are agreeing to go along with a ''lesser evil.''
And the influential Louisiana Association of Business and Industry, a sort of quarterback among state lobbying groups, has endorsed the concept.
Statewide banking is ''absolutely essential,'' says Gilbert H. Vorhoff, senior vice-president with the Hibernia National Bank, sometimes considered the progressive front edge of the New Orleans old guard. ''It's purely a protectionist attitude on the part of country banks who don't want it. Inevitably we'll have countrywide banking, and they won't be able to do anything about that.''
Restricting a bank to a single parish necessarily restricts its deposit base and hence its ability to make loans. Mr. Vorhoff laments the profits lost when he has to package a big loan with the help of a big New York bank.
He also argues that single-parish banks aren't able to help distressed farmers as statewide banks could.
But he rates the probability of getting a new law this year or next as ''good ,'' and predicts it will be a great boost to the state's development.
''Once it's through I expect it will be one of the biggest stimuli possible for the economic expansion of the state.''
Tom Rapier, president of the First National Bank of Commerce of New Orleans and also of the ACB, argues that under current law Louisiana banks are ''condemned to smallness.'' The state has only three $1 billion banks, compared with 14 in Texas - and even four in Alabama.
It's sometimes hard to tell which comes first in a community, general business growth or growth in the banking industry, Mr. Rapier says. ''It's like the chicken and the egg. But whichever comes first, it's clear you don't have giant business growth if you have pygmy banking.''
The situation looks rather different to M.L. (Bud) Mapes. He is the lobbyist for the Louisiana Independent Association of Banks, and his effectiveness in that position is seen as part of the reason Louisiana still has one-parish banks.
''Greed, greed!'' is Mr. Mapes's comment on those who want statewide banking. ''This specter has been hanging over us since 1973, but they've never shown the need for it.''
Asked about what it means to Louisiana for its businesses to have to look elsewhere for financing, he replied, ''Well, if that means out-of-state money coming in here, then I say, hoo-ray!''
He counters that in any case, smaller banks can come together to package a loan beyond the means of any one of them individually. He cites a recent public opinion poll that found most people were satisfied with the state's banking industry as it is.
Some observers suggest that that satisfaction with the status quo may be just what has kept the state from fulfilling its economic promise.
For example, a Tulane University business school study last September surveyed the international banks in New Orleans - all two of them - plus international services available from native banks in New Orleans, and compared them with those of Miami, Houston, Dallas-Fort Worth, and Atlanta.
New Orleans generally came out on the bottom; its bankers drew criticism for their conservatism, their ''clublike'' way of doing business, and their general lack of enthusiasm about the international services that in theory, at least, they do provide.