Open Sesame to Suburbia

Some of the biggest U.S. banks have been cooped up within the confines of New York City, forbidden by state law to set up branches or holding companies to buy banks in the fast-growing suburbs of Westchester and Nassau counties. Efforts of Manhattan bankers to change the law have always been blocked by a coalition of small-town Republicans and solid Democratic opposition in the state legislature. Among the caged banking Goliaths: the Chase Manhattan (assets: $8.5 billion), whose vice chairman is David Rockefeller, brother of New York's Governor Nelson Rockefeller.

Last week, at the urging of Brother Nelson, the state legislature passed an omnibus banking bill that lifted the blockade. Its main provisions: 1) holding companies will be permitted to buy banks anywhere under state supervision; 2) New York commercial and savings banks may open suburban branches, and suburban banks may now invade New York City.

As expected, there were suburban wails. Grumbled Westchester County Supervisor Arnold D. Roseman: "It's the rape of Westchester." Arthur T. Roth, chairman of the Franklin National Bank of Long Island and a bitter opponent of the bill, pointedly asked Governor Rockefeller whether "an eleventh-hour emergency plea issued on a bill that favors Chase Manhattan isn't a conflict of interest." Replied Rockefeller: he had sold his 18,000 Chase Manhattan shares last January.

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