Interstate Banking Act of 1985

Interstate Banking Act of 1985 - Authorizes interstate branching by national banks. Permits a national bank of one State to establish a branch in another State to the same extent such other State allows interstate branching by State banks. Authorizes States to allow such interstate branching: (1) without restriction; or (2) based upon the location of the other States involved or the reciprocal treatment by the other States. Requires any State which permits interstate branching on a regional basis within the three years following enactment of this Act: (1) to allow the establishment of branches by banks located in any State which is contiguous to such State or which provides for reciprocal treatment; and (2) after such three years expire, to allow the establishment of branches by banks located in any State providing for reciprocal treatment.

Authorizes a national bank, five years after enactment of this Act, to establish a branch at any location within any State if banks of such State are affirmatively authorized by law to establish a branch at such location.

Amends the Bank Holding Company Act of 1956 to allow a State to authorize a bank holding company, the banking operations of which are principally conducted in another State, to acquire interest in, or voting shares or assets of, a bank located in such State. Authorizes States to allow such acquisitions: (1) without restriction; or (2) on the basis of the location of the other States involved or reciprocal treatment by such other States. Requires any State which permits such acquisitions on a regional basis within the three years following enactment of this Act: (1) to permit such an acquisition by an out-of-State bank holding company located in any State which is contiguous to such State or which provides for reciprocal treatment; and (2) after such three years expire, to allow such an acquisition by any out-of-State bank holding company located in any State which provides for reciprocal treatment.

Terminates such restrictions on acquisitions by out-of-State bank holding companies five years after enactment of this Act.

Prohibits approval of an acquisition of bank shares or assets by a bank holding company unless: (1) the domestic deposits of the holding company subsidiaries and of the bank to be acquired do not exceed specified ceilings: (2) the acquisition will not result in an undue concentration of resources; and (3) the Board of Governors of the Federal Reserve System determines that the acquisition is reasonably likely to result in reduced rates and fees for existing services, new or improved community services, increased operating efficiency, or greater convenience.

Amends the Federal Deposit Insurance Act to prohibit the responsible agency from approving a merger that would result in the operation by a bank insured by the Federal Deposit Insurance Corporation of branches in more than one State unless: (1) the merger is authorized by the laws of the States in which such branches will be operated; (2) the domestic deposits of the acquiring bank and of the bank to be acquired do not exceed specified ceilings; (3) the merger will not result in an undue concentration of resources; and (4) the responsible agency determines that the merger is reasonably likely to result in reduced rates and fees for existing services, new or improved community services, increased operating efficiency, or greater convenience. Authorizes States to allow interstate mergers: (1) without restriction: or (2) on the basis of the location of the other States involved or reciprocal treatment by such other States. Requires any State which permits such mergers on a regional basis within the three years following enactment of this Act: (1) to permit such a merger by an out-of-State bank located in any State which is contiguous to such State or which provides for reciprocal treatment; and (2) after such three years expire, to allow such a merger by any out-of-State bank located in any State which provides for reciprocal treatment.

Terminates certain restrictions on interstate mergers five years after enactment of this Act.

Amends the Home Owners' Loan Act of 1933 to authorize States to allow interstate branching by Federal savings and loan associations or Federal savings banks; (1) without restriction; or (2) on the basis of the location of the other States involved or reciprocal treatment by the other States. Requires any State which permits such interstate branching on a regional basis within the three years following enactment of this Act: (1) to allow the establishment of branches by such banks located in any State which is contiguous to such State or which provides for reciprocal treatment; and (2) after such three years expire, to allow the establishment of branches by such banks located in any State providing for reciprocal treatment.

Terminates the restrictions on interstate branching by such banks five years after enactment of this Act.

Amends the National Housing Act to direct the Federal Savings and Loan Insurance Corporation (FSLIC) to permit a reorganization or merger involving insured Federal savings and loan associations located in different States if such a reorganization or merger or interstate branching by such associations is expressly permitted under the laws of the States involved. Authorizes a State to allow such a merger, reorganization, or interstate branching: (1) without restriction; or (2) on the basis of the location of the other States involved or reciprocal treatment by such other States. Requires any State which permits such a merger on a regional basis within the three years following enactment of this Act: (1) to permit such a merger by out-of-State savings and loan associations located in any State which is contiguous to such State or which provides for reciprocal treatment; and (2) after such three years expire, to permit such a merger by any out-of-State associations located in any State which provides for reciprocal treatment. Prohibits the FSLIC from approving any merger unless: (1) the domestic deposits of the acquiring association and the association to be acquired do not exceed specified ceilings; (2) the merger will not result in an undue concentration of resources; and (3) the FSLIC determines that the merger is reasonably likely to result in reduced rates and fees for existing services, new or improved community services, increased operating efficiency, or greater convenience.

Requires each savings and loan association to notify the FSLIC of the State designated as its principal place of savings and loan business. Authorizes the FSLIC to allow a savings and loan holding company whose operations are principally conducted in one State to acquire interest in, or the voting shares or assets of, any association located in another State if the laws of such State expressly permit such acquisition. Authorizes States to allow such acquisitions: (1) without restriction; or (2) on the basis of the location of the other States involved or reciprocal treatment by such other States. Terminates such restrictions on interstate acquisitions five years after enactment of this Act. Prohibits the FSLIC from approving such an acquisition unless: (1) the domestic deposits of the holding company subsidiaries and of the association to be acquired do not exceed specified ceilings; (2) the acquisition will not result in an undue concentration of resources; and (3) the FSLIC determines that the acquisition is reasonably likely to result in reduced rates and fees for existing services, new or improved community services, increased operating efficiency, or greater convenience.