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

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385006_2299%3A2

## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition
- **Published:** January 1, 1980
- **Citation:** 449 U.S. 823

## Text

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
ROG TIN ois eisai sciccddintsnersSestanaee cere evelvenee I
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

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385006_2299%3A2. Public record. Not legal advice.