What was a key outcome of the Interstate Banking Act?

The Interstate Banking Act, enacted in 1994, was a significant piece of legislation that fundamentally altered the landscape of banking in the United States by removing restrictions on interstate banking. Prior to the act, banks were limited by state laws concerning how far they could operate outside their home state, which restricted competition and consumer choice. By allowing banks to branch across state lines, the act facilitated the creation of larger, more efficient banking institutions and improved access to banking services for consumers across the nation.

This removal of interstate banking restrictions enabled banks to grow through mergers and acquisitions, leading to increased efficiency and often allowing for lower costs for consumers. The act promoted greater competition among banks, which in turn contributed to the diversification of financial services available to customers, enhancing the overall stability and resilience of the banking system.

The other options pertain to outcomes that are not directly related to the act's primary focus: while interest rates can be influenced by various factors in the banking environment, the act explicitly did not limit banks' abilities and did not aim to reduce federal regulatory powers. Similarly, the act did not place limitations on the number of banks within each state; in fact, it allowed for greater competition among established banks and new entrants.