A key objective of the Interstate Banking Act was to enable banks to operate more freely across state boundaries. Before the IBA, many states had restrictive regulations that limited or entirely prohibited banks from establishing branches in other states. The passage of the IBA effectively dismantled these barriers, allowing banks to broaden their geographic presence and tap into new markets with greater ease.

In addition to facilitating interstate banking, the IBA was also intended to promote competition within the banking industry. By enabling banks to enter new markets, the Act fostered a more competitive environment. This increased competition was anticipated to benefit consumers by providing them with a broader array of banking services, along with more favorable terms and rates on loans and deposits.

The IBA also catalyzed a wave of consolidation within the banking industry. With the ability to expand across state lines, larger banks pursued the acquisition of smaller institutions, leading to significant consolidation in the sector. This trend has continued in the decades since the Act’s passage, contributing to the emergence of several large national and multinational banking corporations that dominate the industry today.