Controversial legislation that would permit the giant Citicorp bank to open branches in Maryland next year passed a key test in the State Senate today and advanced in the House of Delegates.
Supporters of the so-called "Citicorp bill" said its chances improved dramatically when the Senate Finance Committee chairman abruptly postponed a voting session after it became clear he did not have enough support to kill the measure.
In a related development that also bodes well for the New York bank and its ally, Gov. Harry Hughes, Senate President Melvin A. Steinberg (D-Baltimore) met privately with four Citicorp officials this morning and presented a compromise proposal that could ensure passage of the legislation.
Citicorp, the largest bank holding company in the nation, has promised to build a multimillion-dollar credit card service center in the depressed Hagerstown area if the General Assembly grants it the right to open branches in Maryland. The Citicorp bill would permit any out-of-state bank to expand in Maryland after promising 1,000 new jobs and open a $25 million facility.
The bill designed to carry out the agreement between the bank and Hughes has been the object of an intense lobbying campaign conducted chiefly by the Maryland Bankers Association, which opposes it, and Citicorp and aides to Hughes. In recent days, the governor also has interceded, meeting privately with key legislators to persuade them to support the agreement.
Tonight, the House gave preliminary approval to the Citicorp bill and is expected to finally pass the measure on Tuesday.
It is also expected to finally approve a separate but related measure that that would establish a four-year period of regional banking when 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 nationwide banking in 1989.
The bankers association, which includes all 89 commercial banks in Maryland, has sharply criticized the Citicorp bill as inconsistent with the regional-interstate banking legislation, even though Citicorp would be barred from acquiring Maryland banks for several years if it expands into the state in 1986.
Senate Finance Committee Chairman Dennis F. Rasmussen (D-Baltimore) has also attacked the Citicorp bill on those grounds. Rasmussen, who committee members said had enough votes to kill the bill late last week, delayed a vote today when it became apparent he had lost some of his support.
Although Rasmussen told reporters at an impromptu news conference that he was merely waiting to see what action the House took this evening, several committee members said later that the vote was put off until Wednesday because no more than five of the panel's 11 members favor killing the Citicorp proposal.
Committee members credited Hughes' private politicking with turning several key votes around, including those of Sen. Leo E. Green (D-Prince George's) and Sen. Thomas L. Bromwell (D-Baltimore).
Senate President Steinberg told Citicorp officials today he would urge the Senate to approve the Citicorp bill and a regional-interstate banking measure that provides only for an indefinite period of regional banking. The Citicorp officials expressed their displeasure with Steinberg's regional banking idea, saying it could delay mergers with Maryland banks or its other plans until well after 1989.