Oklahoma banking: An analysis of the anticipated effect of branch banking legislation

Abstract

Scope and Method of Study: This study examines the effects of a change in banking structure upon banks in Iowa and Arkansas in order to determine the possible effects of such a change upon Oklahoma banks. Five categories for comparison were identified including: bank office availability, concentration, allocation of credit, operating efficiency, and prices of services. Banking data relevant to these categories was examined over the 1967-1977 time period. Comparisons were made for data prior to and following the enactment of branch banking legislation in Iowa and Arkansas. Oklahoma banking data was compared with Iowa and Arkansas data as a means of differentiating change associated with structural differences from change associated with other economic factors.

Findings and Conclusions: The major result of this study is the finding that of the criteria examined, only bank office availability and allocation of credit were shown to be affected by a structural change from unit banking to limited area branching. Assuming limited area branching legislation was enacted in Oklahoma the following changes could be anticipated: (1) increased bank office availability and (2) better allocation of credit. Based upon the results observed in Arkansas, one other change may be anticipated. Service charge levels may increase in Oklahoma following enactment of branch banking legislation.