Opposition — Independent Bankers Ass'n of America v. Heimann

fee ee ee ee spy

””Binremo Court, U. &

: EILED

dite 2€ 1980 |

RODAK, JR. CLERM

No. 79-1705

In the Supreme Court of the Hnited States

OCTOBER TERM, 1979

INDEPENDENT BANKERS ASSOCIATION OF AMERICA,

PETITIONER

V.

JOHN G. HEIMANN, COMPTROLLER OF THE CURRENCY

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE RESPONDENT IN OPPOSITION

WADE H. McCreE, JR.

Solicitor General

ALICE DANIEL

Assistant Attorney General

WILLIAM KANTER

Attorney

Depariment of Justice

Washington, D.C. 20530

— R. GLANCZ

ORD BARRETT

Attorneys

Office of the Comptroller

of the Currency

Washington, D.C. 20219

INDEX

Page

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IIE ic ean i nkccdcsusiatelaxisvusebsbercnbbahdtaantigeaedvaeialeeds I

RR SN iii oe ne Siac hancachesanci Ove snstounaes 2

Statutes and regulations involved ....................ccceceeeees 2

SIGE. Citiienicrsaqeeiipavsatecavarnassvenysnadiies dnassnntunatbemngiads 2

PENI “iri citcisbnss Licceshixiphi vs tsbnaaiiocudesanncoledeeunauselelanabstcnas vas 4

TPN x chgs coinsspstbaclvcadtelsesanishscokia tev sanistekveoaatatoskaeten 14

CITATIONS

Cases:

Board of Governors of the Federal Reserve

System v. Agnew, 329 U.S. 441 .......c eee 8

Board of Governors of the Federal Reserve

System v. First Lincolnwood Corp..,

ER ie MI ha dahbccbincacadatasanblacevcdinechasivincansnncies 8

Commissioner of Internal Revenue v. First

Security Bank of Utah, N.A., 405 U.S.

DO dnidiinnssidtdantashdisaebesceseummsisaiaeuasi. .. 10, 12-13

First National Bank of Eden v. Department

of the Treasury, 568 F. 2d 610.0000... eee 8

First National Bank of LaMarque v. Smith,

Oe Wa Me AE basta atoninbaccsesdcniaasaetbesanisteani 7, 10

First Security Bank of Utah, N.A. v.

Commissioner of Internal Revenue, 436

i, aR, PEE: tecariicbeaiapnaiadetiernddes sk sbehebadcnda sc 13

Ford Motor Credit Co. v. Milhollin,

No. 78-1487 (Feb. 20, 1980) .........................006. 8

Page

Cases —(Continued):

Groos National Bank v. Comptroller of the

CN ie Wi Be Soci hasecicncedessipesvesssecdcss 7

Mourning v. Family Publications Service, Inc..

ee I aid celle cas vi nshigutlardbnivanckonsapnscnsnpes 8

National Petroleum Refiners Ass'n v. FTC,

482 F. 2d 672, cert. denied, 415

EN WE: --sestentaihndedianl ts tvielen ub Ub ndiuaeeviabevesladcdokes wes 6

Saxon v. Georgia Ass'n of Independent

Insurance Agents, Inc., 399 F. 2d 1010 ......... 1!

Statutes and regulations:

Depository Institutions Deregulation and

Monetary Control Act of 1980, Pub. L..

POW Ig Oe Ms BOR. vvcsecscccccccsccscscsdensecsenecs 8

Section 708, 94 Stat. 188 ................ccccccssconees 8

Federa! Trade Commission Act,

Pe Nr aaa, ales ctishigeavehaviensesdsasvendee 6

Financial Institutions Supervisory Act of

1966, 12 U.S.C. 1464 er seq. :

DZ WG. TOBTIGMEMA) wecccesccccccccccccccsrsesctsins 5

Bae I NUE tlicsinicie cenit ecpiuvininnassncasesidsdiies 2

GS eee RS pe

ee Rein IEE isbinhsbpthce nes vebanianatawns )

McCarran-Ferguson Act, I5 U.S.C.

BE I seattle she Sr vanapibnnh 2. 4. 9

Page

Statutes and regulations—(Continued):

National Bank Act, ch. 461, 39 Stat. 752,

Re Bes ee WE Msc tecceaecuens 2, 4

De Aaa IE. dedi asinen dhhisansdon tub wiieoneinbediccenilenas 11

$2 SC. TE OP SU. FISD co caivcsi cc ccccnescs 10, 13

Fe ess ME aecivscdpetecnatbecsmetbonsens ae TTR LTE, 8

oT fy eee Re alae 3

BP RR, SE CAGED cicccttnrirnmincnnmatalcon 12

Miscellaneous:

41 Fed. Reg. 29846 (1976) ........c:ssecseessecseeseeseenes 3

42 Fed. Reg. (1977):

Iai Me i a ee 4. 11

ITED | sce vcwcistuesncstsdovinncesesibenvonnwas 12, 13

0D MRED -vaxcoskthishesksnsnesciesesmtapledllenasesiciiias 10

i, MEI ctendiianaiashtpiienestescoilaireninumsanpasacnwanpinabucrersnts 4

H.R. Rep. No. 1383, 95th Cong.. 2d Sess.

CIPD Seaceusittiiscxecumnnninsisbininvanariemagapebinebtetseteentbantnes 9

In the Supreme Court of the Hnited States

OCTOBER TERM, 1979

No. 79-1705

INDEPENDENT BANKERS ASSOCIATION OF AMERICA,

PETITIONER

Vv.

JOHN G. HEIMANN, COMPTROLLER OF THE CURRENCY

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE RESPONDENT IN OPPOSITION

OPINIONS BELOW

_ The opinion of the court of appeals (Pet. App. la-12a)

is reported at 613 F. 2d 1164. The orders of the district

court (Pet. App. 14a-19a) are not reported.

JURISDICTION

The judgment of the court of appeals (Pet. App. la)

was entered on December 28, 1979. A petition for

rehearing was denied on February |, 1980 (Pet. App.

13a). The petition for a writ of certiorari was filed on

April 28, 1980. The jurisdiction of this Court is invoked

under 28 U.S.C. 1254(1).

(1)

2

QUESTIONS PRESENTED

|. Whether the Financial Institutions Supervisory Act

of 1966, 12 U.S.C. 1818(b) and (n), authorizes the

Comptroller of the Currency to adopt a_ regulation

forbidding employees, officers, directors or principal

shareholders of a national bank from retaining com-

missions or other income from the sale of credit life

insurance in connection with a loan made by the bank.

2. Whether the Comptroller’s regulation constitutes an

improper attempt to regulate the business of insurance, in

violation of the McCarran-Ferguson Act, 15 U.S.C. 1011

et seq.

3. Whether the Comptroller's regulation permits

national banks to provide general insurance services that

exceed the authority granted under the National Bank

Act, ch. 461, 39 Stat. 752, 12 U.S.C. 21 ef seg.

STATUTES AND REGULATIONS INVOLVED

The relevant statutory and regulatory provisions are set

forth at Pet. App. 20a-22a and 25a-30a.

STATEMENT

|. This case concerns the validity of a regulation

promulgated by the Comptroller of the Currency to

prevent insiders of national banks from _ personally

profiting from the sale of credit life, health and accident

insurance (“credit life insurance”). Credit life insurance

protects a creditor bank against losses resulting from the

death or disability of its borrowers. Such insurance is now

widely provided by banks to secure consumer loans (Pet.

App. 5a-6a).

The Comptroller initiated rulemaking proceedings

under the Financial Institutions Supervisory Act of 1966,

12 U.S.C. 1818. That Act authorizes the Comptroller to

3

issue cease and desist orders against national banks

engaged in any “unsafe or unsound” banking practice. 12

U.S.C. 1818(b). It also authorizes the Comptroller to issue

cease and desist orders to prevent violations of any “rule

or regulation” applicable to national banks. /hid. In

addition, the Comptroller is expressly empowered “to

make rules and regulations” that apply to proceedings

brought to restrain unsafe or unsound banking practices.

12 U.S.C. 1818(n).

The Comptroller published the text of his proposed

regulation for public comment in July 1976. See 41 Fed.

Reg. 29846 (1976). The proposed regulation declared that

retention of credit life income by employees, officers,

directors and principal shareholders of a national bank is

an “unsafe and unsound banking practice” within the

meaning of Section 1818(b).' Thereafter, more than 200

comments were received from various persons, including

the Federal Trade Commission, national banks, trade

associations, and consumer groups. In September 1977,

the Comptroller published the final text of his regulation,

to become effective in January 1978. See 12 C.F.R. 2. At

that time, the Comptroller explained that retention of

credit life income by bank insiders is a form of self-

dealing and that similar conduct has caused many bank

failures in recent years. The Comptroller pointed out that

a loan officer’s judgment on the quality of a loan can be

'The Comptroller explained (Pet. App. 25a) that the purpose of the

regulation is to “prohibit employees, officers, directors and principal

shareholders of national banks from benefitting personally on the sale

of credit life insurance to loan customers” and to “encourage

marketing of credit life insurance through the use of bank facilities

only under arrangements which assure that employees, officers,

directors and principal shareholders do not receive benefits not

shared with all stockholders of the bank.”

7%

4

influenced adversely by the possibility of receiving direct

financial rewards for making the loan and selling the

borrower credit life insurance. See 42 Fed. Reg. 48518,

48524 (1977).

2. In December 1977, petitioner Independent Bankers

Association of America brought this action in the United

States District Court for the District of Columbia to

enjoin the Comptroller from enforcing his regulation. The

district court dismissed the complaint, holding that the

issues presented were not ripe for adjudication. The court

concluded that the regulation was merely a statement of

opinion rather than an enforceable legal standard (Pet.

App. |6a). The Comptroller thereafter sought a modifica-

tion of the court’s opinion, explaining that his regulation

is a substantive rule with the force of law. The district

court subsequently modiifed its opinion (id. at 18a), but

reaffirmed that it was unnecessary to “decide the validity

of the Regulation.” The court “left that issue for decision

in a cease and desist proceeding” (id. at 19a).

The court of appeals affirmed the district court’s order

dismissing the complaint (Pet. App. la-12a). However,

the court upheld the Comptroller’s regulation on the

merits. The court found that the complaint was ripe for

adjudication and that petitioner had standing to bring this

action. The court held that the Comptroller had authority

to issue the challenged regulation and that the regulation

was consistent with both the National Bank Act. ch. 461,

39 Stat. 752, 12 U.S.C. 21 et seg.. and the McCarran-

Ferguson Act, I5 U.S.C. 1011 ef seg.

ARGUMENT

This is the first case involving the validity of a

regulation issued by one of the federal bank regulatory

agencies that specifies that a particular banking practice is

=n

5

“unsafe or unsound” under the Financial Institutions

Supervisory Act of 1966.2 Accordingly, there are no

decisions that conflict with the decision of the court

below. In addition, the decisicn has little continuing

importance because Congress has recently enacted a

statute that broadens the rulemaking authority of the

Comptroller and removes any doubt that he may adopt

substantive rules defining “unsafe and unsound” banking

practices. Review by this Court of the decision of the

court of appeals is therefore unwarranted.

1. a. Petitioner contends (Pet. 8-14) that the Financial

Institutions Supervisory Act authorizes the Comptroller

tc adopt only procedural rules, not substantive

regulations. However, 12 U.S.C. 1818(b) empowers the

Comptroller to issue cease and desist orders to prevent

national banks from engaging in any “unsafe or unsound

practice” in the conduct of its banking business and also

authorizes the Comptroller to restrain the violation of any

“rule or regulation” applicable to national banks. In

addition, 18 U.S.C. 1818(n) authorizes the Comptroller to

“make rules and regulations” with respect to cease and

desist proceedings involving unsafe or unsound banking

practices. The Financial Institutions Supervisory Act thus

provides a sufficient basis for the Comptroller’s rule. The

rule defines the statutory term “unsafe or unsound

practice” and provides specific standards in cease and

desist proceedings brought by the Comptroller. It also

notifies national bank employees that particular behavior

is deemed by the Comptroller tu be improper and thus

?Under that Act, the Comptroller, the Federal Deposit Insurance

Corporation, the Federal Reserve Board, and the Federal Home

Loan Bank Board may proceed administratively against “unsafe or

unsound” banking practices within their respective jurisdictions. See

12 U.S.C. 1818(b), (n); 12 U.S.C. 1464(d)(2)(A).

6

promotes statutory compliance without the need for

formal cease and desist proceedings. As the court of

appeals explained (Pet. App. 7a):

[A] regulation giving advance notice of conduct

which the Comptroller disapproves as threatening to

the safety and soundness of the banks he regulates is

wholly consistent with the statutory scheme. The

Comptroller was given authority to promulgate

regulations in order to facilitate execution of his

statutory powers. See 12 U.S.C. §1818(n). It would

undermine the regulatory purpose of Congress to

assume that the Comptroller must proceed soleiy by

separate “cease and desist” cases. His ability to

forewarn by specifying and clarifying the nature and

scope of his concerns will at the same time minimize

the necessity for recurrent and costly investigation

into the conduct of the many individual banks under

his supervision

As the court of appeals also pointed out (Pet. App. 8a),

the statutory language here involved is quite similar to

that previously found to be a sufficient predicate for the

adoption of substantive rules. See. e.g.. National

Petroleum Refiners Ass'n v. FTC, 482 F. 2d 672 (D.C.

Cir.), cert. denied, 415 U.S. 951 (1974). Both the Financial

Institutions Supervisory Act, 12 U.S.C. 1818(b). (n), and

the Federal Trade Commission Act, 15 U.S.C. 45(a),

authorize the administrative agency to take action to

redress broadly defined commercial problems (i.e.,

“unsafe or unsound practices” in banking. and “unfair or

deceptive acts or practices” in commerce). and to

promulgate regulations in aid thereof-(see Pet. App. 8a &

n.14).

7

Although the decision below is the first decision dealing

explicitly with the Comptroller’s rulemaking authority in

this area, the Fifth Circuit previously has held that the

Comptroller possesses authority to adopt substantive

standards relating to the disposition of funds obtained

from the sale of credit life insurance. See First National

Bank of LaMarque v. Smith, 610 F. 2d 1258 (Sth Cir.

1980), upholding the Comptroller's authority to issue

directives to national banks requiring them to cease

allowing insiders to benefit personally from the sale of

credit life insurance. In sustaining the Comptroller's

broad authority in this area, the court explained (610 F.

2d at 1263-1264):

Appellants assert the Comptroller has no authority to

issue a substantive directive regarding the handling of

credit life insurance by a national bank. We disagree.

The Comptroller has not acted arbitrarily or

capriciously, or abused his discretion in this case. See

5 U.S.C. § 706(2) (1976). The letter directives sent to

the appellant banks constitute a lawful exercise of the

Comptroller’s authority to prevent national banks

from engaging in unsafe and unsound banking

practices under 12 U.S.C. §1818(b) (1976).

See also Groos National Bank v. Comptroller of the

Currency, 573 F. 2d 889, 897 (Sth Cir. 1978):

The phrase “unsafe or unsound banking practice” is

widely used in the regulatory statutes and in case law,

and one of the purposes of the banking acts is clearly

to commit the progressive definition and eradication

of such practices to the expertise of the appropriate

regulatory agencies.

8

Accord, First National Bank of Eden v. Department of

the Treasury, 568 F. 2d 610, 611 & n.2 (8th Cir. 1978)

The decision of the court of appeals, upholding the

Comptroller’s :authority to define “unsafe or unsound

banking practices,” is also consistent with this Court's

recognition that the bank regulatory agencies have broad

authority to preserve the soundness of the nation’s

financial institutions (Board of Governors of the Federal

Reserve System v. First Lincolnwood Corp., 439 U.S. 234

(1978)) and that considerable deference is owing to

interpretations by the bank regulatory agencies of their

own enabling statutes. See Mourning v. Family

Publications Service, Inc., 411 U.S. 356, 369 (1973):

Board of Governors of the Federal Reserve System v.

Agnew, 329 U.S. 441, 450 (1947) (Rutledge and

Frankfurter, JJ., concurring); see also Ford Motor Credit

Co. v. Milhollin, No. 78-1487 (Feb. 20, 1980). slip op. 10.

b. In any event, the question whether the court of

appeals correctly construed the Comptroller's rulemaking

authority under the Financial Institutions Supervisory

Act of 1966 has little continuing importance. On March

31, 1980, the President signed into law the Depository

Institutions Deregulation and Monetary Control Act of

1980, Pub. L. No. 96-221, 94 Stat. 132. Section 708 of

that Act strengthens the Comptroller's rulemaking

authority by adding a new statutory provision (to be

codified at 12 U.S.C. 93a) that states:

Except to the extent that authority to issue such

rules and regulations has been expressly and

exclusively granted to another regulatory agency, the

Comptroller of the Currency. is authorized to

prescribe rules and regulations to carry out the

responsibilities of the office, except that the authority

we

9

conferred by this section does not apply to section

5155 of the Revised Statutes or to securities activities

of National Banks under the Act commonly known

as the ‘Glass-Steagall Act.”

Thus, even if petitioner were correct in its contention that

the Financial Institutions Supervisory Act of 1966 does

not confer substantive rulemaking authority on the

Comptroller, the new enactment fills any statutory void.

2. Petitioner also argues (Pet. 14-17) that the Comp-

troller’s regulation violates the McCarran-Ferguson Act,

IS U.S.C. 1011 et seg. The court of appeals correctly

rejected that contention, explaining that (Pet. App. 10a-

Ila):

While it is true that the [McCarran-Ferguson] Act

preserves to the states authority to regulate the

relationship between the insurance company and its

policyholder * * * a rule affecting the disposition of

credit life insurance income received by national

bank insiders does not fall within the strictures of the

statute. Nothing in the McCarran-Ferguson Act was

intended to affect the power of the Comptroller

under authority of Congress to regulate “unsafe and

unsound” banking practices of national banks. This

exercise of power over income dispensed internally

among national bank personnel lies well beyond the

core of protection furnished to state insurance laws

under the Act.

3As the court of appeals noted (Pet. App. 8a n.15). the legislative

history of this provision shows that it was meant to clarily the

Comptroller's existing rulemaking authority rather than create new -

authority. See H.R. Rep. No. 1383, 95th Cong., 2d Sess. 29 (1978).

10

Moreover, because the Comptroller’s. regulation does not

require banks to sell credit life insurance at all and

various alternative methods for its sale are available in

every state, there is no basis for petitioner’s contention

that the regulation would compe! national banks to

violate state insurance laws. See Pet. App. 10a & n.21;

First National Bank of LaMarque v. Smith, supra, 610 F.

2d at 1263; see also the statement of basis and purpose

accompanying the Comptroller’s regulation (42 Fed. Reg.

48519-48520 (1977)).

3. Petitioner finally argues (Pet. 17-19) that Section 92

of the National Bank Act, ch. 461, 39 Stat. 753, bars the

Comptroller from adopting the regulation here involved

because the regulation permits national banks to act as

agents for the sale of credit insurance (within specified

limitations) in cities with more than 5,000 inhabitants.+

That contention is fully answered in the opinion of the

court of appeals and the statement of basis and purpose

accompanying the Comptroller’s regulation. As the court

explained (Pet. App. 9a):

This legislation [Section 92] authorizes national

banks in towns of 5,000 inhabitants or less to act as

agents for life insurance companies; in appellant's

view its language carries a clear implication that

national banks in larger towns have no authority to

4Section 92 authorizes national banks to operate as agents for life

insurance companies in towns having less than 5.000 inhabitants. As

the court of appeals noted, “[b]y its own terms, the statute does not

address the authority of national banks in larger towns or cities to act

as agents for life insurance companies” (Pet. App. 9a n.18).

By error, Section 92 has been omitted from the United States

Code. See Commissioner of Internal Revenue v. First Security Bank

of Utah, N.A., 405 U.S. 394, 40! n.12 (1972): First National Bank of

Lamarque v. Smith, supra, 610 F. 2d at 1261-1262 n.6.

so perform. Unlike other forms of insurance

coverage, however, credit life insurance is a limited

special type of coverage written to protect loans. In

no way does it involve the operations of a general life

insurance business whether written in a town of over

or under 5,000 inhabitants. Moreover, Congress has

specifically granted national banks all incidental

powers necessary to carry on the business of banking,

12 U.S.C. 24, and as the record thoroughly

establishes credit life insurance is now commonplace

and essential where ordinary loans on_ personal

security are involved.

The Comptroller also pointed out in his statement of basis

and

purposeg (42 Fed. Reg. 48518 (1977)) that:

[iJn the field of consumer credit, credit life insurance

is probably the preeminent form of security taken by

financial institutions today. Since the use of credit

life insurance as security is now routine in the making

of loans, acting as agent for that sale is plainly

incidental to the power of national banks to loan

money on personal security. Hence, national banks in

towns of more than 5,000 that act as agent, either in

their own right or through licensed employees, for

the sale of credit life insurance are not engaged in the

general insurance agency business contemplated by

[Section 92]. Rather, they are lawfully making

available to loan customers a highly specialized form

of insurance peculiarly related to the business of

banking and not generally available from insurance

agencies unaffiliated with financial institutions.

Contrary to petitioner's assertion (Pet. 18), no court has

held that the Comptroller lacks power to prescribe the

circumstances under which national banks may provide

credit life insurance in connection with loans made by the

12

bank. Saxon v. Georgia Ass'n of Independent Insurance

Agents, Inc., 399 F. 2d 1010, 1012 {Sth Cir. 1968),

concluded that national banks could not provide broad

categories of automobile, home, casualty and liability

insurance. Saxon did not hold that the Comptroller is

powerless to adopt rules governing the limited credit life

insurance practices of national banks.‘

Commissioner of Internal Revenue v. First: Security

Bank of Utah, N.A., 405 U.S. 394 (1972), is also irrelevant

to the issue presented here. That case considered the

federal income tax obligations of a national bank that

received proceeds from the sale of credit insurance. The

Court did not pass judgment on the Comptroller's

authority to adopt regulations specifying that banks,

rather than their employees, should receive commissions

from the sale of credit insurance. In deciding the narrow

tax question before it, the Court merely “assume[d] for

the purposes of this decision that. the Banks were

‘In promulgating his regulation, the Comptroller stressed the

essential distinction between the insurance activities considered in

Saxon and those involved here (42 Fed. Reg. 48518-48519) (1977)):

In Saxon, the independent insurance agents sought to enjoin

Citizens and Southern National Bank from * * * [operating]

* * * a general insurance agency through which the bank acted

as agent for the sale of property and liability insurance * * *.

Since the types of insurance for which the bank acted as agent

are commonly sought by the public outside the credit granting

process, are a staple of the independent insurance agent and are

characteristically sold by a general agency opcration, it seems

clear that the facts of this case are not controlling where a bank

acts as agent in its own right or through a licensed employee for

the sale of credit life insurance in connection with a specific

loan—a type of insurance which * * * frequently serves in licu of

collateral or a guarantee and is not normally available from

independent agencies.

This position is consistent with the regulations promulgated by the

Comptroller following Saxon. See 12 C.F.R. 2.1-2.5 (1971).

13

prohibited from receiving insurance-related income * * *”

(405 U.S. at 402).° As the court below correctly observed

(Pet. App. 10a), the “assumption” in First Security. Bank

of Utah is not a decision on the requirements of Section

92. See also 42 Fed. Reg. 48519 (1977).’

‘The decision of the court of appeals in First Security Bank of

Utah rested on the finding of the Tax Court that “the banks believed

that it would be contrary to federal banking law to receive income

resulting from their customers’ purchase of credit insurance and that

they have never received commissions or reinsurance premiums

arising from credit insurance transactions.” First Security Bank of

Utah, N.A. v. Commissioner of Internal Revenue, 436 F. 2d 1192,

1196 (10th Cir. 1971). The court of appeals adopted a multi-factor

analysis in reaching the conclusion that the banks did not “earn”

income from their insurance activities. /d. at 1198. The court’s

comments on the scope of Section 92 (ibid.) were unnecessary to the

‘resolution of the tax law question before the court. See 405 U.S. at

402 (assuming the correctness of the parties’ uncontested interpreta-

tion of Section 92 in order to decide the case).

7No court except the court below has had occasion to consider the

validity under Section 92 of a regulation permitting national banks to

engage in the limited activity of providing credit life insurance

incidental to extending consumer loans, and no other court has had

the benefit of the Comptroller's expert views on that issue. See Ford

Motor Credit Co. v. Milhollin, supra. Moreover, as noted above, the

Comptroller's regulation does not require banks to receive com-

missions from the sale of credit life insurance. It merely offers that as

one of several alternatives to a banking practice that the Comptroller

has determined to be unsafe and unsound (Pet. App. 26a). Petitioner

does not challenge the Comptroller's finding that the receipt of credit

life insurance income by bank insiders is an unsound banking practice

that can impair the safety of bank loans.

14

CONCLUSION °

The petition for a writ of certiorari should be denied.

Respectfully submitted.

WADE H. McCreE, JR.

Solicitor General

ALICE DANIEL

Assistant Attorney General

WILLIAM KANTER

Attorney

RONALD R. GLANCZ

FoRD BARRETT

Attorneys

Office of the Comptroller

of the Currency

JUNE 1980

DO}J-1980-06