190). The Act also helped to create a "too-big-to-fail" mindset (Walter, 2004) that would have profound implications during the economic downturn of 2008 and beyond. 6.

Why did you include this piece of legislation in your list? The Act is described by Sammin (2004) as being "the biggest revision in financial services law since the Great Depression" (p. 653).

Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994

1.

What were the problems/conditions giving rise to the legislation? Rapid consolidations among the nation's banks were creating the potential for diverting needed banking resources from communities (Rose, 1997).

2.

What were the major provisions of the Act? The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (hereinafter "the Act") contained the following major provisions:

A. Bank holding companies that are adequately capitalized and managed can acquire a bank anywhere in the United States one year after this law is enacted. However, no banking firm can acquire another banking firm in a different state if the resulting institution controls at least 30% of the insured deposits held in the state involved (though a state may waive or alter this limitation if it wishes) or as much as 10% of nationwide insured deposits. The states can protect new banks from acquisition by out-of-state firms for up to five years.

B. Interstate bank holding companies that are adequately capitalized and managed may consolidate their affiliated banks acquired across state lines into branch offices via merger unless the states act to outlaw interstate branching activity. An individual state may enact laws permitting interstate branching prior to June 1, 1997, and a host state that contains a branch office of an out-of-state bank can examine and take enforcement action against that branch office.

C. If a state elects to prohibit interstate branching, banks headquartered in that state may not engage in interstate mergers.

D. For those states involved in the interstate banking system, their regulatory agencies will be permitted to set up cooperative agreements to supervise multistate depository institutions.

E. Federal banking agencies must consult with community organizations before closing a branch office owned by an interstate banking company if the branch is located in a low- or moderate-income area.

F. A federally insured bank can branch de novo into a state where it has no existing office but only if state law expressly permits de novo entry via branching. States can tax branches of out-of-state banks as if they were full-service banks operating in that state (Rose, 1997, p. 43).

3.

What were the significant effects or outcomes arising form the legislation? Following the passage of the Act, well-capitalized and well-managed bank holding companies were permitted to acquire banks in any state in the country (Rose, 1997). According to Walter (2004), one of the most significant effects of the Act was to increase merger premiums by approximately 35% as a result of the deregulation that resulted from the enactment of the Act because it eliminated geographic restrictions for bank operations in the U.S. (Walter, 2004).

4.

Did the legislation...

has been reduced by half due to consolidation, and banking markets have become more competitive in the years following the passage of the Act (Feinberg & Reynolds, 2010).
5.

Were there any significant unintended consequences of the Act? According to Rose, the Act introduced the potential for bank holding company acquisition nationwide by overriding state laws that only allowed the entry of banking companies if they were headquartered in certain states or regions of the nation (Rose, 1997).

6.

Why did you include this piece of legislation in your list? Like the other two pieces of legislation, the Act was widely regarded as one of the most important pieces of financial services and banking industry regulation in recent years. For example, Feinberg and Reynolds suggest that, "The 1994 Riegle-Neal Act ushered forth a new era in banking deregulation" (2010, p. 624).

Conclusion

The research showed that the past 50 years have witnessed the passage of a number of laws that have had an enormous impact on the banking and financial sector history in the U.S., with three of the most important being the Sarbanes-Oxley Act of 2002, the Gramm-Leach-Bliley Financial Services Modernization Act of 1999 and the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994. The research also found widespread agreement among analysts that these laws were among the most important in the nation's history with profound implications for the banking and financial services industries that will continue into the foreseeable future.