The 1994 interstate branching statute likewise has its origin in the state laws that permitted cross-border banking, beginning with the rewriting of the Maine banking laws. Adjustable rate mortgages are another innovation that began at the state level, and of course, the National Banking Act itself has its origin in the states’ “free banking” laws of the nineteenth century.
The dual banking system not only fosters and preserves innovation but also constitutes our main protection against overly zealous and rigid federal regulation and supervision. A bank must have a choice of more than one federal regulator, must be permitted to change charters, to protect itself against arbitrary and capricious regulatory behavior.