When Chase Manhattan Corp. Chairman Willard C. Butcher visited Richmond recently to meet with Gov. Charles Robb and Gov.-elect Gerald L. Baliles, some observers speculated that the primary purpose of the meeting was to discuss interstate banking.
Several bankers in the state apparently were unaware of the meeting, and a few who were asked about it failed, surprisingly, to connect it any way with interstate banking. An official at a leading Virginia bank speculated that the discussions probably centered on Chase's involvement as underwriter for the financing of several state and municipal projects.
State officials have said little publicly about the visit by Chase's chairman, but Butcher himself ended speculation last week when he explained in an interview the reason for his mission to the Old Dominion.
"Was I promoting interstate banking with the governor of Virginia? Yes."
In a word, Butcher was being "opportunistic." Opportunism is basic to Chase's national strategy as it aggressively promotes interstate banking.
Congress hasn't seen fit to pass legislation approving national interstate banking, therefore "I think I've got to go down the other avenue of working state by state" to develop a national banking network, Butcher said.
"One of our fundamental thrusts is to develop a nationwide franchise. It's not unlike Congress to wait until the states do things. I suspect that that is the way interstate banking will go. In the meantime, we will have to be very opportunistic."
Chase's entry into Maryland in November is an excellent example of just how opportunistic the New York banking giant can be. With several of Maryland's state-insured savings and loan associations on the brink of collapsing in the still-unresolved S&L crisis, Chase saw an opportunity to advance its national banking strategy. Maryland officials, desperate to unburden the state of potential heavy financial losses from crippled state-chartered S&Ls, enacted special legislation in October, enabling Chase to buy three thrifts.
Chase's strategy in Maryland already had been tested successfully in Ohio, where the bank-holding company offered to help bail out Ohio officials from a similar savings and loan crisis.
In both Maryland and Ohio, reckless management, imprudent investments and questionable insider loans brought down archaic private insurance systems. The result was chaos in both instances, and Chase was prepared to take advantage of the situation in both states.
"I think it is unfortunate that, in order to be interstate, we had to take advantage of unfortunate situations" in Maryland and Ohio, Butcher noted.
The ambiguity of it all won't alter Chase's opportunistic forays into other states, or the District, for that matter. Chase and other money-center institutions may fight a new interstate-banking proposal approved last week by a D.C. City Council committee, but pronounced weaknesses in the District's economy may make it ripe for opportunistic inroads by banks from outside the region.
Seated in a Chase Bank office in Bethesda one day last week, Butcher adroitly managed to avoid discussing any conversations he may have had with D.C. Mayor Marion Barry or what opportunistic strategy Chase may be developing for the District. It is obvious, however, that getting into Maryland is only Chase's first step in carving out a share of the lucrative market that extends from the Port of Baltimore to the Dulles corridor in Northern Virginia.
The border separating the District from Maryland is "a man-made interference with commerce," Butcher contends.
It's obvious that the same philosophy applies nationwide. A year ago, Chase was in only one state; today it operates commercial banks in four states. It plans to open a bank in Phoenix next year when Arizona's interstate banking law is expected to go into effect. The State of Washington has been targeted for 1987, while Maine and Alaska also are considered strong possibilities as new markets for Chase.
Interestingly, Virginia is not yet on the list of states where Chase thinks it can hurdle barriers to national interstate banking in 1986. It still isn't known how Virginia officials responded to Butcher's latest pitch, but similar overtures by at least one other money-center banking firm were turned away last year before Virginia adopted a regional interstate banking law.
In the meantime, Chase's opportunistic entry into Maryland's banking picture can be expected to develop slowly. Chase obviously will be going after a major share of the consumer and middle-tier business markets in Maryland but will concentrate initially on developing the consumer side. Medium and small businesses tend to develop strong loyalties to their local banks, and "we have to earn our way into that market," a Chase official admits.