Passage of the 1994 Reigle–Neal Act, which regulates interstate banking, has spurred the consolidation of depository institutions. The number of FDIC-insured commercial banks fell from 10,166 in the middle of 1995 to 7,350 in the middle of 2007, a decline of more than 27 percent. The total number of banking offices, however, increased nearly 28 percent over that period, from 65,321 to 83,358.
The number of FDIC-insured savings associations fell by about 40 percent over the period, from 2,082 in 1995 to 1,244 in 2007. The number of savings association offices also declined, but less sharply than the number of institutions (less than 12 percent, from 15,637 in 1995 to 13,903 in 2007). In contrast, the total number of offices of FDIC-insured depository institutions increased almost 20 percent, from 80,958 in 1995 to 97,261 in 2007. This count does not include other channels for delivering banking services, such as automated teller machines, telephone banking, and online banking. Hence, the reduction in the number of insured depository institutions has not decreased the availability of bank services for most consumers.
The effects of the banking industry’s interstate consolidation are evident: All but five states now report that more than 15 percent of depository institution branches are part of an out-of-state bank or savings association. And in over half the states, 30 percent or more of all branches are offices of out-of-state depository institutions.