Louisiana House Bill HB217

Louisiana 2021 Regular Session

• Introduced: 3/25/21
• Refer: 3/25/21
• Refer: 4/12/21
• Report Pass: 4/13/21
• Engrossed: 4/19/21
• Refer: 4/20/21
• Report Pass: 4/28/21
• Enrolled: 5/13/21
• Chaptered: 6/1/21
• Passed: 6/1/21

Caption

Provides relative to banks and banking

Impact

If enacted, HB 217 will significantly affect the landscape of banking in Louisiana by simplifying the process for out-of-state banks to establish a presence in the state. It repeals the necessity for out-of-state bank holding companies to acquire existing local banks before entering the state, which could lead to increased competition and potentially better services for consumers. The law also seeks to eliminate barriers that out-of-state banks faced when attempting to enter the Louisiana market, potentially enhancing economic activity and job creation in the sector.

Summary

House Bill 217 aims to amend existing Louisiana banking laws to facilitate the entry of out-of-state banks and improve the operational flexibility of local financial institutions. The bill removes provisions related to public policy that previously restricted the activities of out-of-state banks, such as capital requirements and geographical limitations. Additionally, it allows state banks to be held as subsidiaries, thereby aligning local banking regulations more closely with current practices in interstate banking.

Sentiment

The sentiment surrounding HB 217 appears largely positive, particularly among proponents of increased competition in the banking sector. Supporters argue that the bill will encourage investment and innovation within the state's financial institutions, providing consumers with more choices and improved services. However, there are concerns from some local banking advocates about the implications for small, community banks that could struggle against larger out-of-state competitors, raising questions about the future of local banking entities.

Contention

Notable points of contention regarding HB 217 include fears that easing restrictions for out-of-state banks could lead to reduced scrutiny over banking practices and potential neglect of community needs. Opponents argue that while competition is essential, it should not come at the expense of local bank stability. Those against the bill claim that the removal of provisions aimed at protecting local banks may negatively affect the banking outcomes for Louisiana residents, particularly in underserved regions where local banks play a crucial role in financial services.