The Federal Home Loan Bank Board Yesterday announced it is reviving action on a petition to allow savings and loan associations in metropolitan Washington to establish branch offices across state lines. It will accept public comments unitl Feb. 13.
The application was made two years ago by big District thrifts wishing to do business in the affuent suburbs. It was opposed by small suburban thrifts that fear competition and by community groups that want to keep the S&Ls lending in the District.
The board originally had proposed a regulation back in June 1979 to permit branching, but the case remained in limbo pending a presidential report on interstate branching of commercial banks.
That report was made public at the end of 1980. It calls for a gradual phase-out of legal restrictions against interstate branching. While the law does not affect S&Ls directly, their regulators agreed to await overall presidential policy on this controversial issue before proceeding. The idea has engendered considerabl opposition from small financial institutions and from legilators concerned about the dual banking system.
Greater Washington is considered to be a test arena for interstate branching. Were approval granted here, it could well precipitate action nationwide. Large thrift institutions in similar natural market areas could be expected to ask approval. And if S&Ls were to begin branching across state lines, banks would press harder for equal powers.