# Opposition Brief — Chase Manhattan Bank, N. A. v. American Land Title Ass'n > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386011_1316%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Opposition Brief - **Published:** January 1, 1993 - **Citation:** 508 U.S. 971 ## Text Nos. 92-182, 92-645 IN THE Supreme Court of the United OCTOBER TERM, 1992 THE CHASE MANHATTAN BANK, N.A., Petitioner, V. AMERICAN LAND TITLE ASSOCIATION, et a/., Respondents. STEPHEN R. STEINBRINK, ACTING COMPTROLLER OF THE CURRENCY, ef a., Petitioner, Vv. AMERICAN LAND TITLE ASSOCIATION, et a., Respondents. On Petition for a Writ of Certiorari to the United States Court of Appeals for the Second Circuit BRIEF IN OPPOSITION SHELDON E. HOCHBERG * CHARLES G, COLE SUSAN M. DAMPLO STEPTOE & JOHNSON 1330 Connecticut Ave., N.W. Washington, D.C. 20036 (202) 429-3000 Attorneys for Respondents, American Land Title Association, New York State Land Title Association November 12, 1992 * Counsel of Record WILSON - Eres PRINTING Co... IN« 789.0096 - WASHINGTON, D.C. 20001 QUESTION PRESENTED Whether national banks may engage in the title insur- ance agency business outside of the limitations established by Congress in 12 U.S.C. 92, the only statutory enactment to address the permissible scope of insurance agency les by national banks? i . il RULE 29.1 LISTING OF PARENT COMPANIES, SUBSIDIARIES AND AFFILIATES Respondent American Land Title Association (“ALTA”) is a non-governmental corporate body. ALTA is a non- profit corporation founded in 1907, It is organized and existing under the laws of the District of Columbia and is the national association of the land title industry. ALTA has &pproximately 2,300 members, including title insurance agents and title insurance companies, which do business in all 50 states, including the State of New York. ALTA has no parent companies, subsidiaries, or affiliates that have issued shares to the public. Respondent New York State Land Title Association (“NYSLTA”) is an unincorporated organization organ- ized in 1921 as the statewide association of the land title industry in the State of New York. NYSLTA has ap- proximately 250 regular members, including title insur- ance agents and title insurance companies, doing business in New York. NYSLTA has no parent companies, sub- sidiaries or affiliates that have issued shares to the public. TABLE OF CONTENTS QUESTION PRESENTED RULE 29.1 LISTING OF PARENT COMPANIES, SUBSIDIARIES AND AFFILIATES TABLE OF AUTHORITIES STATEMENT OF THE CASE A. The Genesis of Section 92 B. The Saron and Heimann Decisions a The OCC’s Title insurance Ruling and the In- stant Litigation — _ . The Decision Below REASONS FOR DENYING THE WRITS I. REVIEW OF THE DECISION BELOW IS NOT NEEDED TO RESOLVE WHETHER SECTION 92 EXISTS Il. THE DECISION BELOW DOES NOT WAR.- RANT REVIEW BY THIS COURT A. There Is No Conflict Among the Circuits on the Relationship of Section 92 to the Inci- dental Powers of National Banks Under Sec tion 24 (Seventh) B. The Decision Below Raises No Issue of Im- portance That Merits Review by This Court C. There Is No Error in the Second Circuit's Decision That Warrants Review D. Reversal of the Decision Below Would Not Resolve This Litigation CONCLUSION iv TABLE OF AUTHORITIES CASES Page American Ins. Ass’n v. Clarke, 865 F.2d 278 (D.C. RIK ID corsa. calaecaddsaieanaoaettaaeaasetertemetamaaie 12 American Land Title Ass’n v. Clarke, 968 F 2d Te ARUE RU INGE sehcasscacanthientecciinsapansidshaconacctsaml passim Arnold Tours, Inc. v. Camp, 472 F.2d 427 (1st Cir. + Re clint eet tte oy apn ie Res nnn are ER Raskin 21 Chevron, U S.A. Inc. v. Natural Resources De- fense Council, Inc., 467 U.S. 837 (1984) ............ 6, 20 Commissioner v. First Sec. Bank, 405 U.S. 394 First Nat'l Bank v. Missouri, 263 U.S. 640 DMP cheer cua ivan'co aso ae anatase cites cat cetenen coe oa 20 First Nat'l Bank v. Smith, 436 F. Supp. 824 (S. D. Tex. 1977), modified, 610 F.2d 1258 (5th Cir. Re Ae eee apm a RRMA DiC Poms HE RRCME eae Lee A 15 First Nat'l Bank v. Taylor, 907 F.2d 775 (8th Cir.), cert. denied, 111 S. Ct. 442 (1990) .......... ; 18 First Wisconsin Corp., 75 Fed. Res. Bull. 31 (1989), aff'd, American Land Title Ass’n v. Board of Governors, 892 F.2d 1059 (D.C. Cir 1989) ..... ee ee Cn eI TT ene Re ee eet Cy EN 16 Independent Bankers Ass’n of Am. . Heimann, 613 F.2d 1164 (D.C. Cir. 1979), oe denied, 449 U.S. 823 (1980) ... ae _ passim Independent Ins. Agents of Am., Inc. v. Board of Governors, 736 F.2d 468 (8th Cir. 1984) _... . 12 Independent Ins. Agents of Am. v. Clarke, 955 F.2d 731 (D.C. Cir. 1992), petitions for cert. pending, 61 U.S.L.W. 3266 (U.S. Sept. 18, 1992) (Nos. 92-484 & 92-507) _........ | 8, 9,10, 11 M & M Leasing Corp. v. Seattle First Nat'l Bank, 563 F.2d 1377 (9th Cir. 1977), cert. denied, | 436 U.S. 956 (1978) . am 21 | NLRB v. United Food & Commercial W ovkere Union, Local 23, 484 U.S. 112 (1987) 21 Sanford v. Garamendi, 284 Cal. Rptr. 897 (Ct. App. 1991) .............. 12 Saron v. Georgia Ass'n of Indep p. Ine. Age nts, Ine. 399 F.2d 1010 (5th Cir. 1968) passim Texas & Pac. Ry. v. Pottorff, 291 U.S. 245 (1934) 20 A a ee | TABLE OF AUTHORITIES—Continued Page Variable Annuity Life Ins. [;3: 2). Clarke, 786 F. Supp. 639 (S.D. Tex. 1991), appeal pending, No. 92-2010 (5th Cir.) 12 STATUTES 12 U.S.C. 24 (Seventh) (1988 & Supp. II 1990) passim 12 U.S.C. Ja passim 12 U.S.C. 1843 (¢c) (8) (A) (1988) 16 FEDERAL REGULATIONS AND MATERIALS OCC Staff Interpretive Letter No. 368, printed in [1985-87 Transfer Binder] Fed. Banking L. Rep. (CCH) © 85,538 (July 11, 1986) 5 12 C.F.R. §§ 2.1-2.7 (1992) 13 Disposition of Credit Life Insurance Income (Final Regulation), 42 Fed. Reg. 48,518 (1977) 13, 14,15 Disposition of Credit Life Insurance Income (Pro- posed Rulemaking) 41 Fed. Reg. 29.846 (1976) 13, 14 2 Fed. Res. Bull. 73 (Feb. 1916) 2 MISCELLANEOUS 03 Cong. Rec. 11,001 (1916) 3,12 Symons, The ‘“‘Business of Perspective, 51 Geo. Wash. ! r’’ in Historical L. Rev. 676 (1983) 21 | —~ ~ IN THE Supreme Court of the United States OCTOBER TERM, 1992 Nos. 92-482. 92-6 15 THE CHASE MANHATTAN BANK, N.A.. Pe titione rs ) AMERICAN LAND TITLE ASSOCIATION, et al.. Re sponde nts. STEPHEN R. STEINBRINK, ACTING COMPTROLLER OF THE CURRENCY, et al.., me Petitioner. Ve AMERICAN LAND TITLE ASSOCIATION, et al.. Respondents. On Petition for a Writ of Certiorari to the United States Court of Appeals for the Second Circuit BRIEF IN OPPOSITION STATEMENT OF THE CASE This brief is submitted by respondents American Land Title Association and New York State Land Title Asso- ciation (collectively “ALTA”) in opposition to the peti- tions for writ of certiorari filed by the Acting Comptroller of the Currency and the Office of th tne Comptroller of the Currency (collectively “OCC”) in case No. 92-645 and ‘hase Manhattan Bank, N.A. (“Chase”) in case ( No. 92-482. The primary issue raised by the petitions 2 is whether 12 U.S.C. 92 limits the authority of national banks to engage in the title insurance agency busizess. The conclusion of the court of appeals that the statute has this effect does not merit review. It raises no con- flict with the hoiding of any other circuit court and is consistent with the language and legislative history of section 92, and with prior judicial precedent. A. The Genesis of Section 92 In 1863, Congress first established the powers of na- tional banks in legislation that later became known as the National Bank Act. In addition’to granting certain express powers, the legislation granted national banks the power to exercise “all such incidental powers as shali be necessary to carry on the business of banking.” 12 U.S.C. 24 (Seventh) (1988 & Supp. IT 1990) (hereafter “section 24 (Seventh)”). Over the next half century, numerous Supreme Court decisions addressed and delin- eated those powers that had been granted by Congress in the 1863 legislation and in subsequent amendments. In February of 1916, the Federal Reserve Board pub- lished a memorandum from its counsel regarding the authority of national banks to engage in insurance agency activities. 2 Fed. Res. Bull. 73-74.' It concluded that a national bank had no express power to engage in such activities and that no such authority could be derived from the incidental powers provision of section 24 (Sev- enth). According to the Board, “[a]ny such extension of the powers of national banks must be left to the consid- eration of Congress.” /d. at 74, App., infra, at 3a. Four months later, in June 1916, Comptroller of the Currency John Williams wrote to the Congress recom- mending that it enact legislation, a draft of which was enclosed with the Comptroller’s letter, that would grant insurance agency powers to national banks located in This memorandum is reproduced at App., infra, la-3a. 3 small towns. 53 Cong. Rec. 11,001 (1916).2 His letter confirmed that, under existing law (specifically referring to the incidental powers provision) and Supreme Court precedent, “|n]ational banks are not given either ex- pressiy nor by necessary implication the power to act as agents for insurance companies .... It is certainly clear that the Comptroller of the Currency has no right to authorize or permit a national bank to exercise powers not conferred upon it by law.” App., infra, at 6a. In proposing that Congress’ grant of insurance agency pow- ers “should be limited to banks in small communities.” he reiterated that it would be “unwise and _ therefore undesirable to confer this privilege generally upon banks in large cities.” App., infra, at 7a. After increasing the small town population limit from 3,000 to 5,000, Congress enacted the legislation proposed by the Comptroller. This legislation was codified at 12 U.S.C. 92 thereafter “section 92”), and remains today the only legislative grant of insurance agency powers to national banks. B. The Saxon and Heimann Decisions Almost fifty years later, in the early 1960’s, an advisory committee established by Comptroller of the Currency John Saxon concluded that national banks should have broader insurance agency powers and rec- ommended that Congress enact legislation granting na- tional banks the power to act as insurance agents in connection with their loan transactions. Instead of seek- ing the necessary legislation, Comptroller Saxon con- verted the panel’s recommendation into an administrative ruling, which purported to determine that national banks already had such authority pursuant to their “incidental” powers. That ruling was struck down by the Fifth Cir- cuit in Saxon v. Georgia Ass'n of Indep. Ins. Agents, Inc., “ The full text of the Comptroller’s letter, as printed in the Con- gressional Record, is set out in App. infra, at 4a-8a. . : vam ~ ol i. P = - - aa bat » > - rn 7. me 8 ~ _~ S : - . a = - on J - ‘ ™ -- - - . = ] y ° * J ] - 7 : O & + EO 5 C. The OCC’s Title Insurance Ruling and the Instant Litigation [In 1986, the OCC issued an interpretive ruling that a national bank may act as agent in the sale of title ‘nsurance in any community regardless of population if such activities are undertaken in transactions involving the bank’s loans. OCC Staff Interpretive Letter No. 368, repriuted in [1985-87 Transfer Binder] Fed. Banking L. Rep. (CCH) © 85,538 (July 11, 1986), reprinted in Chase Pet. App. 53a-44a.° The ruling relied extensively on the Hetmann decision, not only to justify the conclu- sion that the sale of title insurance was incidental to banking, but also to reject the applicability of section 92 and the Sawon decision to title insurance. Chase Pet. App. at 41a-43a. Based on this ruling, in 1989 the OCC approved the establishment by petitioner Chase of two operating subsidiaries with authority to issue owner’s and lender’s title insurance policies in transactions in- volving residential and commercial mortgage loans made by Chase and its affiliates. Chase Pet. App. at 30a-32a. Shortly thereafter ALTA initiated this action to obtain judicial review of the 1986 ruling on title insurance and the 1989 approval of the Chase application. The com- plaint urged that the OCC’s ruling and approval be set aside as unlawful in that they permitted a national bank to engrge in title insurance agency activities that are (a! prohibited to them by section 92, and (b) not author- ized by section 24 (Seventh) or any other provision of law. After the filing of cross-motions for dismissal and summary judgment, the district court granted the de- * The version of OCC Interpretive Letter No. 368 reprinted in the pendix to the OCC petition at 35a-45a omits eight paragraphs from the letter. These omitted paragraphs, which should have peared before the carryover paragraph on page 42a of the OCC petition, appear on pages $9a-12a of the appendix to the Chase petition > ) »* fendants’ motion to dismiss.*° The district court found that it was rational for the OCC to conclude that title insurance agency activities were within the incidental nowers of national banks, it was not arbitrary and capricious for the OCC to conclude that section 92 was not a limitation on those powers, and the OCC’s determi- nation that title insurance differs from the forms of insurance addressed in section 92 was rational. OCC Pet. App. at 29a-30a, D. The Decision Below A unanimous panel of the Second Circuit reversed. OCC Pet. App. at la-l8a: American Land Title Ass’ , Clarke, 968 F.2d 150 (2d Cir. 1992). With regard to the contentions raised by the parties below,’ the Second Circuit first addressed and rejected ALTA’s suggestion that the principles set forth in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Ine., 467 U.S. 837 (1984), were not applicable to interpretive rulings, such as the OCC’s 1986 ruling on title insurance, on which there had been no opportunity for notice and_ public comment. The court concluded that the principles of Chevron were applicable and proceeded to apply them. ] then focused on the language and legislative history of section 92. It concluded that the legislative history tin particular, the letter from Comptroller Wil- ae eae ie ms) supported its finding g that the statutory language precluded national banks from acting as insurance agents outside the provision’s geographical restrictions. OCC "Chase had previously been granted leave to intervene a defendant * Before addressing the parties’ contentions, the court first con cluded that section 92 remains valid law. The court felt compelled to address this issue in light of the decision in Independent Th igents of Am. v. Clarke, 955 F.2d 731 (D.C. Cir. 1992), petition: for cert. pending, 61 U.S.L.W. 3266 (U.S. Sept. 18, 1992) (Nos. 92 184 & 92-507), which was handed down after oral argument in the ALTA case and which had concluded that section 92 18. OCC Pet. App. at 3a-lla; 968 F.2d at 151-54 Pet. App. at 12a-15a; 968 F.2d at 155-56. It also found that this analysis of congressional intent was fully con- sistent with the Fifth Circuit’s analysis in Savon. Id. at 15a; 968 F.2d at 156. The court next addressed and rejected the OCC’s con- tentions that Hetmann and not Saxon was the determina- tive precedent. OCC Pet. App. at 15a-17a; 968 F.2d at 156-57. The court determined that the conclusion in /1eimann was based on the nature of credit life insurance “rather than on the issue of whether section 92 impliedly operates as a bar to certain national bank activity.” * The court did not disagree with the Heimann court’s authorization of credit life insurance activities. Rather, the Second Circuit concluded that Heitmann’s discussion of the applicability of section 92 to credit life insurance Was not persuasive on whether section 92 was applicable to a national bank’s title insurance agency activities. /d. at 17a; 968 F.2d ai 157. Finally, having concluded that section 92 applied to the powers of national banks to engage in title insurance agency activities, the Second Circuit determined there Was no need for it to address the scope of the incidental powers provision of section 24 (Seventh).” “[E]ven if the general grant of power contained in section 24 (Sev- ith) were sufficiently broad to encompass the title in- surance agency business, so construed the statute would ave to vield to the specific limits on insurance activity In section 92.” OCC. Pet. App. at 18a; 968 F.2d at 157. *OCC Pet. App. at 16a; 968 F.2d at 156. The court below also noted that “Heimann’s persuasiveness is further eroded by _ it ‘ant analysis of section 92 and its failure to discuss the legislative history.” Jd. at 17a; 968 F.2d at 157 ‘ALTA had argued that even if section 92 did not preclude th OCC’s 1986 determination that national banks had the in idental ower to engage in the title insurance agency business. that dete nination would be contrary to Supreme Court and lower court precedent on the proper scope of the incidental powers of national banks 8 REASONS FOR DENYING THE WRITS The Chase petition seeks review of the decision below on two issues: (1) whether section 92 was repealed in 1918, and (2) the effect of section 92 on the ability of national banks to engage in insurance agency activities, such as citle insurance agency activities, that the OCC has determined to be incidental to banking under section 24 (Seventh). The OCC petition seeks review on only the second issue. The decision below does not warrant review on either of these issues. None of the parties to this case has ever argued that section 92 has been repealed. The Second Circuit con- sidered the point after oral argument only because of the D.C. Circuit decision in Independent Ins. Agents of Am. v. Clarke, 955 F.2d 731 (D.C. Cir. 1992), petitions for cert. perding, 61 U.S.L.W. 3266 (U.S. Sept. 18, 1992) (Nos, 92-484 & 92-507). As the OCC petition recognizes, there is no need for the Court to grant review of the Second Circuit decision in order to address and _ resolve whether section 92 still exists. Similarly, there is no need for the Court to grant review on the interpretation of section 92. Petitioners assert that a conflict exists among the circuits on the interpretation of section 92 as a limit on the insurance agency activities of national banks. In fact, there is no conflict. Only two circuits have ever squarely addressed the effect on section 92 on determinations by the Comp- troller that national banks can engage in the insurance agency business under their “incidental” powers: the Second Circuit in the decision below and the Fifth Cir- cuit in Savon. Both decisions concluded that, with respect to the insurance agency activities at issue in the respec- tive cases, the Comptroller could not authorize national banks to engage in such activities outside the limitations established by Congress in section 92. The only appellate court decision cited by petitioners that presents even an apparent conflict with the decision 4) below is Heimann. No real conflict exists, however, be- tween that decision and the ALTA and Savon decisions. Heimann did not purport to make a definitive interpre- tation of section 92 in firding that credit life activities were so integral to national bank loan activities as to be permissible. Moreover, the concern expressed by peti- tioners—that the decision below would jeopardize the long-standing and widespread involvement of national banks in various forms of credit-related insurance—is unfounded. The decision below addressed only whether national banks can engage in the title insurance agency business. Finally, there is no error in the decision below war- ranting review. The Second Circuit properly applied relevant principles of statutory interpretation (or, in the case of the OCC’s misguided ejusdem generis conten- tion, rejected irrelevant principles). In any event, the court’s interpretation of section 92 as applying to title insurance has not been shown to be of sufficient moment to merit a separate hearing before this Court. The petitions in this case should be denied or, if neces- sary, should be held pending resolution of the petitions in the //AA case. If the Court denies those petitions, or grants review of the D.C. Circuit decision in the /JAA case and concludes that section 92 remains enacted law, it should then deny the writs requested here.'” I. REVIEW OF THE DECISION BELOW IS NOT NEEDED TO RESOLVE WHETHER SECTION 92 EXISTS In Independent Ins. Agents of Am. v. Clarke, 955 F.2d 731 (D.C. Cir. 1992), petitions for cert. pe nding, 61 U.S.L.W. 3266 (U.S. Sept. 18, 1992) (Nos. 92-484 & Tf the Court affirms the D.C. Circuit decision, it should grant the petitions here, vacate the decision below, and remand the case back to the Second Circuit for reconsideration in light of the Court’s decision in JJAA., 10 92-507) (“IIAA”), the D.C. Circuit concluded that sec- tion 92, which was enacted in 1916, had been repealed in 1918. This decision was handed down in February 1992, after oral argument had been held before the Second Cir- cuit in the instant case. While the parties below had recognized that section 92 was no longer codified in the U.S. Code, the existence or repeal of section 92 was not an issue in the case. The parties had neither briefed nor argued that issue. Because of the /JAA decision, however, the Second Circuit felt compelled to address the repeal issue. The Second Circuit disagreed with the D.C. Circuit and concluded that section 92 was not re- pealed in 1918. OCC Pet. App. at 3a-lla; 968 F.2d at 151-54. The Chase petition suggests that review of the decision below is needed in order to resolve a conflict between the two circuits regarding the continued existence of section 92. Chase Pet. at 12. As the Solicitor General has im- plicitly recognized, this case is not the appropriate ve- hicle for review of the issue of the existence of section 92. Entertaining the same question in both the //AA case and the instant case would involve duplicative and bur- densome argument that would be of little benefit to the Court. In addition, even if the Court were to determine in the JJAA case that section 92 was repealed in 1918, the basis for the decision below in the instant case would still remain. As the Second Circuit recognized, Congress’ enactment of the provision demonstrated that section 92 was understood and intended as the sole statutory authority for the insurance agency activities of national banks. The repeal of section 92 would not cast doubt on that conclusion, but would merely suggest that Con- gress had concluded that even this limited insurance agency authority was inappropriate for national banks. Indeed, it is not even clear that the instant case would provide a full and adversarial presentation of the issue 11 of the existence of section 92. The OCC petition contends that it is the JIAA decision, not the Second Circuit deci- sion. that is in error on this issue. OCC Pet. at 9. The OCC petition pointedly declines to raise the existence or repeal of section 92 as an issue that justifies this Court’s review of the Second Circuit decision. Clearly, the OCC will not argue in this case that section 92 has been repealed. The Chase petition, while asserting a conflict between the Second Circuit and the D.C. Circuit, fails to indicate what position Chase would take regarding whether section 92 exists. Thus, it is possible that, as in the court below, no party in this case will argue that section 92 has been repealed. In short, there is no reason for the Court to grant review of the decision below in order to address whether section 92 was repealed. Il. THE DECISION BELOW DOES NOT WARRANT REVIEW BY THIS COURT The Second Circuit’s decision on the application of section 92 to the title insurance agency activities of national banks does not raise a conflict among the cir- cuits or any other issue that merits this Court’s review. A. There Is No Conflict Among the Circuits on the Relationship of Section 92 to the Incidental Powers of National Banks Under Section 24 (Seventh) Only two circuit courts, the Second Circuit in the case below and the Fifth Circuit in Sawon, have examined whether section 92 limits the scope of insurance agency activities by national banks other than with respect to the sale of credit-related insurance. Both circuits, after a thorough examination of the language and legislative history of section 92, reached identical conclusions. Other than the Heimann decision, the other appellate court decisions cited by petitioners either did not address 12 section 92 or did so by way of dicta.'’ The lower court decisions cited by petitioners are likewise not in conflict with the Second Circuit’s interpretation of section 92." The petitions seek to create a conflict by contending that the Second Circuit’s reading of section 92 is incom- patible with Heimann. OCC Pet. at 10; Chase Pet. at 16-17. An examination of Heimann and the OCC rule- making at issue in that case makes evident that there is no conflict. The unique factors that led the D.C. Cir- cuit in Heimann to conclude that national banks could sell credit life insurance outside the limitations of section 92 are not relevant to title insurance agency activities. 1! American Ins. Ass’n v. Clarke, 865 F.2d 278 (D.C. Cir. 1988) did not discuss or even mention section 92. The footnote in Independent Ins. Agents of Am., Inc. v. Board of Governors, 736 F.2d 468. 477 n.6 (8th Cir. 1984 ), sugyvests. without explanation or analysis, that Saron may have been wrongly decided because the legislative history of section 92 indicates that Congress was only concerned with providing small town banks an additional source of profits, not°with prohibiting city banks from selling insur- ance. The court’s unsupported statement is clearly in error in light of the Comptroller’s 1916 letter to the Congress (“It would be un wise and therefore undesirable to confer this privilege generalls upon banks in large cities... .’). 53 Cong. Ree. 11,001 (1916 App., infra, at 7a. 12 Variable Annuity Life Ins. Co. v. Clarke, 786 F. Supp. 629 (S.D. Tex. 1991), appeal pending, No. 92-2010 (Sth Cir.), affirmed the OCC’s determination that section 92 did not apply to the sale of annuity contracts by national banks because such contracts were “primarily financial instruments, not insurance.” Jd. at 641. That determination, even if upheld on appeal by the Fifth Circuit, would be distinguishable from the ALTA and Savon decisions, which in volved insurance products. Sanford v. Garamendi, 284 Cal. Rptr. 897 (Ct. App. 1991), in volved provisions of state law, not section 92. While one statutors provision at issue was patterned after section 92 the court's inter pretation of that provision was influenced by the legislative histor of that state law provision and the existence of another p of California banking law authorizing state banks to engaye in anv business activity not prohibited by state law. Jd. at 903. There is no comparable provision in the National Bank Act These factors, discussed immediately below, were ad- dressed at length in ALTA’s brief to the Second Circuit. They demonstrate why Heimann concluded that. credit life insurance was “|u]|nlike other forms of insurance.” 613 F.2d at 1170. They also demonstrate why the Second Circuit properly concluded that Heimann was limited to the credit life context and was not persuasive on whether section 92 was applicable to a national bank’s title in- surance activities." First, credit life insurance, unlike title insurance or automobile or homeowners insurance. is a product that exists solely for the protection of credit grantors. Credit life insurance “has no appeal whatsoever to persons not simultaneously borrowing from the bank.” Final Rule- making, 42 Fed. Reg. at 48,518 col. 3. In concluding that Savon did not apply to credit life, the Comptroller noted that other types of insurance were “commonly sought by the public outside the credit granting process.” Jd. at 18,519 col. 1. Although title insurance, like automobile and homeowner’s insurance, is customarily required by) banks to protect the collateral for their loans, title insur- ance, unlike credit life insurance, is purchased by owners of real estate and others quite apart from the credit second, credit life insurance would not be available unless credit grantors, such as national banks. sold the ‘These factors also distinguish credit life insuranee from t} types of property ‘casualty insurance at issue in Saron Phe ¢ lit life insurance regulati Heimay ! oditir t 32.0.7 & zZ.i-2.4 (1992 I} Which Facto Wel Iiscu 1 by (omy Her are D p fion of Credit Life I srernice Tne ‘ yy 1 Reyu Lio! . a2 Fed. Reg. 4%,51% L977 hereafter “Final Rulemaking” Disposition ("; Life Th “7 / Proy i R r ie y I 29,846 (1976 herea Proposed Rulema t 14 insuranece.'' It is issued solely to protect the lender and serves the same purpose as “additional collateral, a co- maker or a guarantor.” See Final Rulemaking, 42 Fed. Reg. at 48,518 col. 2. In this economic sense, credit life insurance can be viewed as part of the loan repayment terms. Third. national banks were almost universally involved in the sale of credit life insurance at the time of the OCC’s eredit life rulemaking.'® Thus, the OCC rulemaking re- viewed in Heimann was not authorizing natienal banks to engage in a new activity. It was merely regulating an activity that was already being engaged in by most national banks. In contrast, national banks were not engaged in the title insurance agency business before the OCC’s 1986 ruling on title insurance. “* Fourth, unlike the work of a title insurance agent, a bank that sells credit life insurance performs only d minimis clerical work. In acting as an agent to enrol] borrowers in its credit life insurance program, the bank undertakes little administrative work and essentially none of the investigation and risk evaluation activities tha tle insurance agents and agents for other lines of in- .: | 4 See Final Rulemaking, 42 Fed. Reg. at 48,518 col. 2 ‘credit insurance is “peculiarly related to the business of banki: erally available from insurance agencies unaffiliated al institutions’); id. at col. 3 n3 (“Congress rec reditors are virtually the only source of credit life insurance” Ti? In contrast, title insurance has been and continues t 1a wide range of independent title insurance agencies bers of respondent associations, and would cor } ] » ’ the n irketplace If itl il imi gency busines C 1 R ) ’ 1] } Tt OG » ( ] ry j ' 15 surance perform.'’ Indeed, one could wel] distinguish Heimann on the basis that the role a bank plays in the sale of credit life insurance cannot be considered to be that of an insurance “agent” within the meaning of sec- tion 92. At least one district court that has examined the activities of national banks in selling credit life in- surance has come to this conclusion. See First Nat’l Bank Smith, 436 F. Supp. 824, 831-33 (S.D. Tex. L977), modified, 610 F.2d 1258, 1262 (5th Cir. 1980) (discus- lon of section 92 vacated as unnecessary to resolution OI Case), Moreover, a bank that. sells credit life insurance per- forms no activities and exercises no discretion over the scope of policy protection that can give rise to conflicts of 16 interest. This is not the case when a bank acts as agent in the issuance of title insurance policies insuring its own mortgage loans. A title insurance agent issues policies on behalf of its insurance company after a thorough search and examination of the relevant title-related records and ments. As a title insurance agent issuing policies on its own loans, a bank faces an inherent conflict of inter- est between its interest as an insured in obtaining the broadest policy coverage and its obligations to minimize the exposure to undue risks of the title insurance com- pany for which it is acting as a policy-issuing agent. 7 Goce In sum, it is apparent why the Second Circuit con- cluded that the Heimann analysis, while relevant to credit life insurance, did not apply to title insurance.'* Neither the decision below nor Sawon compels the conclusion that HTeimann was wrong with regard to the credit life activi- ties at issue in Heimann. Nor does Heimann compel the conclusion that Savon or the decision below was wrong with regard to the property /casualty and title insurance agency activities addressed in those cases. There is no conflict between Heimann and the decision below. B. The Decision Below Raises No Issue of Importance That Merits Review by This Court The Second Circuit’s determination that national banks are precluded from the title insurance agency business outside of small towns raises no issue of overriding im- portance that merits this Court’s review. ‘The Bank Holding Company Act, while generally prohibiting nk holding rcompanics from “providling | insurance as a princi} nt, or broker,” also recognizes an exception for such credit ted insurance, 12 U.S.C. 184306) (8) CA 198s See Heimann, 613 b.2d at 1170 n.19. In contrast, the Federal Reserve Board hi: determined that tithe Insurance is encompassed in the Bank Holdin Company Act’s prohibitions on insurance activitie See First Vi Corp., 7 Fed, Res. Bull. 81, 82 (1989), aff'd, American Land Tithe Ass'n Board of Governors, 892 F.2d 1059 (D.C. Cir. 1989 17 Other than Chase, only a handful of national bank 1 tarted title insurance agency operations in reliance on the OCC’s 1986 title insurance ruling.'’ Prior to that ruling, there is no evidence that national banks had been engaged in the title insurance agency business.“’ Thus, the determination of the court below will not affect the existing activities of many national banks. If, as the OC suggests (OCC Pet. at 16-17), it would be national banks to be able to } their borrowers, such a policy decision should rly be eft to Congres The petitions exaggerate the scope of the decision below in claiming that the decision “directly threaten into question” the ability of nationa} banks to sell eredit life insurance and other types of specialized credit-relat insurance and products that national banks have lone offered to their customers. Chase Pet. at 18: OCC Pet. lv. The decision below relates only to title insura The Second Cireuit ha not determined that ection 92 prohibits national banks from selling credit life insurance ‘In re ponse to a recent Freedom of Informat O! Act) } if ( iatlo al hear tha } y ! ! Lite 1! ]} nee eT O} } , fay ( ted t} 1 Oe not n ? rs val r ( lq l! ate } ) T j tie nial } ) ( | } f 17) | rt il ! act Lie | ro! I! Or? ( i ti del i} nave rece Cu a re 4 ‘ renee ene per Tic The OCC | tit , ; t; +} t ri r) | ( ‘ . rectly in 1916,” implying that section 92 ¢ d not tended by Conyre to foreclose activiti« that nat nal bey ey yed in at the time OCC Pet. at 14 n.5. Wh; fate bar L con ini In certain cite were ! | ; t t tir t} ‘ } ( 4 j | | y nen diy 1c} j t ()('{ } It of the | lu ot y { { r |) ys , hich } i { {} t tit] my] ’ t fits , l ( rrance Chase Pet \ f ( 18 or any of these other types of insurance cited by the petitions. The petitions raise concerns about a conflict that may never arise. There is no reason to believe that a chal- lenge to the credit life insurance activities approved by the OCC in 1977 and upheld in Heimann could be insti- tuted at this late date. This would also be true of the other types of credit-related insurance, such as a credit disability insurance, mortgage life and disability insur- ance, and involuntary unemployment insurance, that have long been permitted by the OCC.’ If a future circuit court decision should create a real conflict with Heimann by holding that national banks may not sell credit-related insurance outside of the limitations of section 92, this Court can address and resolve such a conflict at that time. Until then, there is no reason for the Court to correct a theoretical conflict that may never arise and is clearly not raised by the holding below. C. There Is No Error in the Second Circuit’s Decision That Warrants Review The petitions also allege that the Second Circuit's deci- sion merits review because of several alleged errors made by the court in reaching its decision on the interpretation of section 92. OCC Pet. at 11-16; Chase Pet. at 19-24. While the Court does not sit to correct the errors of courts below, in fact the Second Circuit did net err and its decision represents a proper construction of the lan- guage and history of the statute. 21 See Chase Pet. at 15. Similarly, the authority of national banks to sell debt cancellation contracts is not affected by the decision helew. Such contracts involve an additional charge to the borrower in return for the bank's obligation to cancel the unpaid balance of the lean in the event of the borrower's death. In this regard, they perform a function similar to credit life insurance. See First Nat'l Bank v. Taulor, 907 F.2d 775, T76 (8th Cir.), cert. denved, TLDS. Ct. 442 (1990) (upholding OCC authorization for national banks to sell such contracts). Seetion 92 was not an issue in that case and nothing in the decision below is in conflict with that decision. 19 First, petitioners suggest that the court ignored the introductory language to section 92 (“In addition to the powers now vested by law in national banking associa- tions . ”), which the petitions contend reflects Con- gress’ intent to make clear that section 92 was supple- mentary to the insurance powers conveyed by section 24 (Seventh. OCC Pet. at 12; Chase Pet. at 19-21. This interpretation of the introductory language to section 92 makes no sense in light of Comptroller Williams’ conclu- sion, expressed in the same letter that recommended en- actment of section 92, that no such powers existed under section 24 (Seventh) or any other provision of law. It is absurd to read this language, which was drafted by Comptroller Williams, as reflecting Congress’ desire to preserve incidental powers that the Comptroller had told Congress did not exist.” Second, the court below properly applied the interpre- tive principle of expressio unius est exclusio alterius ‘“expression of one thing is the exclusion of another”) to conclude, as did the Saxon court, that Congress in- tended section 92 to prohibit national banks in towns of over 5,000 inhabitants from engaging in the insurance agency business. OCC Pet. at 13; Chase Pet. at 22-23. Applheation of the principle might be questioned in a case where there were strong indications of contrary legisla- tive intent or where a court simply cited an express, but limited, grant of powers and concluded, from this limited grant alone, that Congress intended to preclude any broader powers. This is not how the court below applied this principle of statutory construction. The court below applied the expressio unius principle only after concluding that the legislative history demonstrated that Congress “2 Indeed, in light of the legislative history, the introductory lan- yuage is better understood as a “finding” by the Congress that the powers “vow vested by law in national banking associations” did not include the power to engage in the insurance agency business. 20 understood that national banks had no other insurance powers.>" Third, the OCC petition contends that the court below “overlooked” the maxim of ejusdem generis when it con- cluded that the language of section 92 ‘which applies to national banks acting as “agent for any fire, life, or other insurance company”) applied to title insurance. OCC Pet. at 13-14. The court below did not ‘‘overlook” this maxim, since its relevance and application to the language of section 92 was urged upon the court below by the OCC and contested by ALTA. OCC Br. at 20-21; ALTA Reply Br. at 5-7. Rather, the court apparently concluded that the OCC’s ejusdem generis argument added so little to the OCC’s general position that section 92 did not apply to title insurance that the argument did not war- rant any separate discussion. Finally, the petitions contend that the court below failed to give proper deference to the OCC’s interpretation of section 92 under Chevron, U.S.A., Inc. v. Natural Re- sources Defense Council, Inc., 467 U.S. 887 (1984). OCC Pet. at 16; Chase Pet. at 20-22. Deference to an agency interpretation under Chevron is only relevant if the court cannot determine congresional intent. If the court is able “to determine congressional intent, using ‘traditional tools of statutory construction,” then ‘that interpretation “8 This Court, in construing the powers of national banks, has similarly recognized that a congressional grant of limited powers in a particular area reflects the denial of broader powers in that area. See, e.y., Teras & Pac. Ry. v. Pottorff, 291 U.S. 245, 258 (1934) (amendment to National Bank Act granting power to pledge assets to secure deposits of governmental entities “indicates that Congress believed that the original act had not granted general power to pledge assets to secure deposiis”); First Natl Bank v Missour?, 263 U.S. 640, 657 (1924) (rejecting argument that na tional banks have the incidental power to establish branch offices in view of express provision that the business of a national bank shall be transacted at ‘an office or banking house located in the place specified in its organizational certificate” ). 21 must be given effect, and the regulations at issue must be fully consistent with it.’ NLRB v. United Food & Com- mercial Workers Union, Local 23, 484 U.S. 112. 123 (1987). In this case the court properly determined and applied Congress’ intent and had no need to proceed to the second step of Chevron. In sum, the decision below committed no error, and certainly none that merits review by this Court. D. Reversal of the Decision Below Would Not Resolve This Litigation Even if the Court were to review and reverse the deci- sion of the court below on the section 92 issue, its judg- ment would not necessarily resolve this case. There is a second critical issue that the court below concluded it did not have to address: whether the OCC’s determination that title insurance agency activities were within the in- cidental powers of national banks under section 24 (Seventh) was contrary to law or otherwise an abuse of discretion. Even if the court below were wrong in its analysis of section 92, it is highly likely on remand to conclude that, even apart from section 92, the OCC’s title insurance ruling was in excess of law."* Accordingly, the *# An analysis of relevant precedent of this Court demonstrates that section 24 (Seventh) authorizes the entry of national banks into a new line of business only when the new activities are (l) a form of, or functionally equivalent to, deposit taking, credit grant- ing, and credit exchanging activities, or (2) reasonably necessary to enable national banks to perform those activities more effectively or efficientiv. See generally Symons, The “Basiness of Banking” in Historical Pe rspective, 51 Geo. Wash. L. Rev. 676 (1983). ALTA’s brief to the court below developed this analysis at length. The decisions of courts of appeal on this issue. including the cases chiefly relied on by the OCC in determining that. title Insurance g, Arnold Tow s, Ine Camp, 472 F.2d 427 (1st Cir. 1972) and M & M Leasing Corp. Seattle First Nat'l Bank, 5623 F.2d 1377 (9th Cir 1977), cert. denied, 186 U.S. 956 (1978), are consistent with this analysis of Supreme Court precedent. agency activities were incidental to bankin Court’s time and effort in resolving the section 92 issue would not resolve this litigation.** CONCLUSION For all the foregoing reasons, this case is not appro- priate for review. Pending a decision in the JiAA case, the Court should defer its resolution of the instant peti- tions. If the Court denies the petition in the //AA case or reverses the D.C. Circuit’s judgment in that case, it should deny the petitions for writ of certiorari here. If the Court affirms the judgment in the //JAA case, it should remand this case to the court below for reconsid- eration in light of that opinion. Respectfully submitted, SHELDON E. HOCHBERG * CHARLES G. COLE SUSAN M. DAMPLO STEPTOE & JOHNSON 1330 Connecticut Ave., N.W. Washington, D.C. 20036 (202) 429-3000 Attorneys for Respondents, American Land Title Association, New York State Land Title Association November 12, 1992 * Counsel of Record * Indeed, tl resolution of the section 92 issue would not resolve the questions that mav arise in other banking cases on the proper | | ? or’? st dard ! ] not evel ! al APPENDIX la APPENDIX h EDERAL I | SERVE BULLETIN FEBRU: a0 SRUARY 1916 PAGES 73-74 Right of a National Bank to Write Insurance Through Its Officers. National banks have no express or implied power to write fire, cyclone, liability, or other kinds of insurance, or to receive the profits from insurance contracts entered into by its officers. JANUARY 13, 1915. SIR: The question has been raised whether, it is lawful for the officers of a national bank to write fire, cyclone, liability, and other kinds of insurance. al] the profits derived from such business being turned into the bank. The powers of national banks are defined by section 5136, United States Revised Statutes Article VII of which provides: To exercise by its board of directors. or duly au- thorized officers or agents, subject to law, all such — ntal ier as shall be necessary to carry on e business of banking; by discounting and negotiat- ing promissory notes, drafts. bills of exchange, and other evidences of debt; by receiving deposits; by buying and selling exchange, coin, and bullion; by loaning money on personal security; and by obtain- ing, issuing, and circulating notes according to the provisions of this title. The power to write insurance, act as insur: ance agent broker, is not specifically enumerated in this section, and unless such business can be considered as incidental to some of the enumerated powers of national banks it ix illegal and prohibited by implication as clearly as if ‘ , ? , ~ 7 +} he | ‘ ; " i ef ’ ? y +} 4 ) ii Lit r,t t-) t ! at i | hess i 3 { { ’ 5 | } Y) ? rs 137 ' 4.itt bial ¥ C Wil ere et (] , - ’ + 7 ire ] ess IS e) *¢ \ d ~ al 1) ] — . + } | ‘ rar hy ¢ yrs 1+ ; : f banking which it was authorized 1+ ) } Yn 1) leyurr faa) )y et . | { ( ‘ DANK Ca laWLTULYV = al is ( n ( ng larn mortgages ror a commission } why + yy \ y + + ) +} { ~ ercelVel Wnyv ] laAVY No al ] S ‘ ‘ same capacity in selling any otner species OF property e p ) ) T) na hank 6] t in pels { ne natlonai DANK al oes no l r) ah Nea ry yy)? li ¢ 1 whoyize n t Lis U I? \ l1eCessa \ 1m }) ICaLliO}#l, au LOT IZ lla ‘ , + , ry « , + ‘ + ‘ ‘wor ; . Vea +s 4 » + : ae 7 loOnNal DANKS to act as DrokKers 1n negotiating tne sal — ond — ¢ exnein Dey . 4 | )] CCurivies, ang 1 Ss generally ipree( Na ( , ) iT \ ncaa a } a} } ino ( aa NN 4li\ €Clivta | su¢ i DNuUsiness It is no part of the business of a national bank to engage in the selling of stocks for anybody. It Was a transaction outside of its regular banking business and not within its chartered powers. Nor can we perceive it IS In anywise necessary the 1}}" ce of their exist Yer - an anv ' ) ne purpose l neir existence, Or 1h any sense ‘ - . } rae 4 +} oo . . +] » . + newMental QO ne DUSINESS ney are empowered 0 ‘conduct, that they should become bond brokers or be . 1 } 4 Llsorn +1 ; — very species of obligations issued ~ yy the innumerable corporations, private and munici- 3a By analogy it would seem that writing insurance on commission is in no sense incidental to any of the enumer- ated powers of a national bank. It is contended that the national bank, in the instance under consideration, is not acting as agent for the insur- ance company, but that its officers write the insurance in their individual capacities and turn in all the profits to the bank. If the bank receives all the profits of writing the insur- ance, its officers are, in substance, acting as agents for the bank, and the bank is estopped to deny that it is engaging in the insurance business. In Schuyler National Bank 7. Gadsden (191 U.S., 451) it was held that the taking of real-estate security by the president of a national bank in his individual name for the benefit of the bank was in legal effect but the taking of security by the bank itself, and the president acted as its agent. Where a national bank retains and enjoys the proceeds of a transaction, it is estopped to deny that the act of the officer who enters into the transaction is its own. (Peoples Bank v. National Bank, 101 U.S., 181.) Na- tional banks, as such, must of necessity act through their officers or other agents. Inasmuch, therefore, as this class of business does not come within either the expressed or implied powers of national banks, an administrative board or officer can not authorize it. Any such extension of the powers of national banks must be left to the consideration of Congress. Respectfully, M. C. ELLIOTT, Counsel. To Hon. C. S. HAMLIN, Governor Federal Reserve Board. 4a LETTER FROM COMPTROLLER WILLIAMS 53 CONG. REc. 11,001 (1916) TREASURY DEPARTMENT, COMPTROLLER OF 1HE CURRENCY, Washington, June 8, 1916. My DEAR SENATOR: The original national-bank act of February 25, 1863, as re-enacted by the act of June 3, 1864, authorizing the formation of national banks throughout the country, pro- vided that no national bank should be authorized with a capital of less than $50,000 in any place; that in a place with a population exceeding 6,000 the capital of the bank should not be less than $100,000, and further provided that no national bank with a capital of less than $200,000 should be organized in any place having a population of over 50,000. Later on it became manifest that there were many country towns and villages which needed banking facili- ties but which did not have sufficient business to justify the organization of national banks with a capital of as much as $50,000. To extend the benefits of banking facili- ties to these small places the national-bank act was amended by the act of March 14, 1900, so as to authorize the organization in towns and villages with a population not exceeding 2,000 of banks with a minimum capital of $25,000. Since this amendment to the bank act went into effect there have been organized throughout the country 3,084 national banks having a capital of $25,000. Four hundred and thirty-eight of these $25,000 banks have either failed or gone into liquidation, some have increased their capital, and the number of such banks with a capital cf $25,000 now in operation is 2,079, or 27 per cent of the total num- ber of national banks. 5a The average deposits (individual and bank) at this time of all $25,000 banks is $178,138, or 7.13 times their capital and 4.6 times their capital, surplus, and profits. A country bank with $25,000 capital and with the aver- age deposits is able, with good management, to lend its money at rates authorized by law and at the same time to return a reasonable dividend to its shareholders. But there are many banks located in country communities where the small deposits which the banks receive may make it somewhat difficult for the banks to charge on their loans only the rates of interest permitted by law and at the same time yield a satisfactory revurn to share- holders, and in many such cases banks have been tempted to exact excessive and in some cases grossly usurious rates on accommodations which they extend to local bor- rowers. It is unfortunately true that in many other cases banks have been demanding usurious rates of in- terest even though they had more than the average de- posits and although adherence to the legal rates would still yield them liberal dividends on their shares. For some time I have been giving careful consideration to the question as to how the powers of these smal] na- tional banks might be enlarged so as to provide them with additional sources of revenue and place them in a position where they could better compete with local State banks and trust companies which are sometimes authorized under the law to do a class of business not strictly that of commercial banking. Under Section 5736, United States Revised Statutes, the busines of national banks at this time is limited to the exercise of “such incidental powers as shall be neces- sary to carry on the business of banking by (a) discount- ing and negotiating promissory notes, drafts, bills of exchange or other evidences of debt; ‘b! receiving de- posits; (c) buying and selling exchange, coin, and bullion; (d) loaning money on personal security; (e) obtaining, issuing, and circulating notes according to the provisions of this title.” 6a Under the Federal reserve act the banks are further authorized under specified restrictions to make certain Joans on real estate. National banks are not given either expressly nor by necessary implication the power to act as agents for in- surance companies or as brokers or agents for others in procuring or making real estate loans. The courts have uniformly held that such corporations can exercise only those powers which are expressly granted or which are necessarily incidental to powers that are granted. As stated by Mr. Justice Harlan, in delivering the opinion of the United States Supreme Court in the case of Logan County National Bank v. Townsend (139 U.S., 67): “It is undoubtedly true, as contended by the defendant, that the national banking act is an enabling act for all associations organized under it, and that a national bank can not rightfully exercise any powers except those ex- pressly granted by that act, or such incidental powers as are necessary to carry on the business of banking for which it was established.” Again in the case of National Bank v. Matthews (98 U.S., 625!, Mr. Justice Swan, in delivering the opinion of the court, said: “Section 5136 does not in terms prohibit a loan on real estate, but the implication to that effect is clear. What is so implied is as effectual as if it were expressed.” It is certainly clear that the Comptroller of the Cur- rency has no right to authorize or permit a national bank to exercise powers not conferred upon it by law. My investigations lead me respectfully to recommend to Congress an amendment to the nationai-bank act by which national banks located in villages and towns having a 7a population of not exceeding 3.000 may be permitted to act as agents for insurance companies in the placing of poli- cies of insurance—fire, life, ete—and that they may also be authorized to act as agents for the negotiation of loans on farms or other real estate in their respective sections of the country, where they may be in position to have some direct knowledge as to the value of the property upon which such loans are to be secured. It seems desirable from the standpoint of public policy and banking efficiency that this authority should be lim- ited to banks in small communities. This additional in- come will strengthen them and increase their ability to make a fair return to their shareholders, while the new business is not likely to assume such whereas as to dis- tract the officers of the bank from the principal business of banking. Furthermore in many small places the amount of insurance policies written or mortgages to be placed on commission is not sufficient to take up the en- tire time of an insurance broker, and the bank is not therefore likely to trespass upon outside business natur- ally belonging to others. I think it would be unwise and therefore undesirable to confer this privilege generally upon banks in large cities where the legitimate business of banking affords ample scope for the energies of trained and expert bank- ers. I think it would be unfortunate if any movement should be made in the direction of placing the banks of the country in the category of department stores. The business is one requiring training, skill, and application, and I think that the profession of banking would suffer if there should be a departure from the principles which should govern and have heretofore governed. I inclose with this a draft of a proposed amendment to the national-banking act designed to empower national banks located in towns of not over 3,000 population, un- der such regulations and- restrictions as may from time to time be approved and promulgated by the Comptroller 8a of the Currency, to act as agents for the placing of in- surance policies and also to act as agent in making or procuring loans on real estate. I respectfully recomend and urge the adoption of such an amendment for the reasons I have given. I am to-day writing a letter similar to this to Congress- man Glass, chairman of the Banking and Currency Com- mittee of the House of Representatives. Respectfully, JNO. SKELTON WILLIAMS, Comptroller. Hon. ROBERT L. OWEN, United States Senate. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386011_1316%3A2. Public record. Not legal advice.