Utah and Arizona regulators are jointly overseeing the operations of Bank of America Arizona, which has a Utah branch located in Salt Lake City, under the nation's first interstate regulatory agreement.
Bank of America Arizona became the first bank in the nation to have a branch in another state when the Phoenix-based company took over Western Savings and Loan of Arizona earlier this summer.Until then, banks carrying the same name as those in other states were operated by separate companies formed in that state and overseen by that state's regulatory system.
The agreement signed last Friday by Utah Department of Financial Institutions Commissioner George Sutton and Arizona Bank Superintendent Hank Rivoir allows both to oversee all of Bank of America Arizona's operations.
Both officials expect the agreement, which also would apply to any other bank opening branches in both Utah and Arizona, to result in less regulatory activity, not more.
"It will eliminate unnecessary and duplicative regulation of banks with branches in both Utah and Arizona, while still preserving each regulator's ability to ensure the safe and sound operation of such banks," Sutton said.
Rivoir agreed. "The purpose of the agreement was to ensure as much efficiency as possible," he said in a telephone interview. "We want to make sure the job is done correctly - once."
Banks will be able to operate more profitably if they consolidate their operations, Sutton said, leading to fewer bank failures and less strain on the federal deposit insurance program.
The agreement also may benefit consumers directly if it leads to more banks offering branches in other states, he said. "It will make banking services more convenient and more available."
Bank of America Arizona is the fifth-largest bank in Arizona, with some $4 billion in assets and 60 branches in that state in addition to the sole Utah branch located on Main Street.
The bank is reportedly seeking to expand operations in Utah by acquiring other financial institutions. Bank of America Arizona is a subsidiary of the California-based Bank of America.