A key House of Delegates committee, deviating from a script that Senate leaders hoped would force Citicorp to sweeten its offer of 1,000 new jobs near Hagerstown, approved a measure today that would allow the giant New York bank and other out-of-state institutions to open branches in Maryland by mid-1986.
The House Economic Matters Committee also approved a separate but related bill to establish four years of regional banking, under which banks in Maryland, 12 Southeastern states and the District of Columbia could merge with one another before Maryland's borders would be opened to full interstate banking.
During the period of regional banking, banks such as Citicorp would not enjoy the right to merge with or acquire Maryland banks. But under the so-called "Citicorp bill" approved by the committee today, those banks could set up branches after creating hundreds of new jobs and investing at least $25 million in a major corporate facility.
The bill was nicknamed after the nation's largest bank because it would effectively seal a March 7 agreement between Gov. Harry Hughes and Citicorp under which the bank would win full banking privileges in Maryland after establishing a large credit card service center in a business "enterprise zone" north of Hagerstown.
The agreement has been sharply criticized by Maryland banks, which hope to kill it through the most intense lobbying effort of this General Assembly's waning days.
A key amendment adopted by the House committee would allow the state banking commissioner to waive a requirement proposed by Hughes that would have forced out-of-state banks like Citicorp to locate in enterprise zones.
Some critics charged today that the amendment would let Citicorp out of its agreement with the governor, clearing the way for construction of the credit card center in Baltimore or another city less remote than Hagerstown.
House committee Chairman Frederick C. Rummage (D-Prince George's) said today's votes represented "a good course of action" toward a nationwide banking system that many industry experts believe is inevitable. But Senate leaders complained that the House panel votes, coming before a scheduled vote by the Senate Finance Committee on the interstate banking bill, threatened to disrupt ongoing negotiations between Senate President Melvin A. Steinberg (D-Baltimore) and Citicorp executives.
The Senate committee is expected to approve a regional banking bill on Monday that would effectively keep Citicorp from expanding in Maryland for many years. Steinberg hoped to use that bill as a bargaining chip to force Citicorp to improve on its economic development for Hagerstown.