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THEATTOEENEY GENERAL.
~FTExA~,
Honorable James 0. Qerst Opinion No. C-335
Savings &Loan Commissioner
1010 Lavaca Re: Whether the operation
Austin, Texas of certain facilities
of a savings and loan
assoclatlon comes
within the definition
of an "agency" as that
term Is defined in
Rules and Regulations
for Building and Loan
Dear Mr. Gerst: Associations.
Your request for an opinion asks whether the operation
of certain facilities of an association, when considered
in light of facts stated in an enclosed deposition, comes
within the definition of "agency" as that term is defined
in: (1) Section 3.1 of the Rules and Regulations for
Building and Loan Associations adopted November 15, 1963;
and (2) the Rules and Regulations for Building and Loan
Associations adopted January 27, 1958, and amended Novem-
ber 5, 1960.
"Agency" is defined in the Rules and Regulations
adopted November 15, 1963, and in the Rules and Regula-
tions adopted Jffnuary 29, 1958, and amended November 6,
1960, as being . . .any lawful arrangement whereby
any business of an assoclatlon is conducted other than
by regularly employed personnel of the association."
The facts, as stated in the deposition, show that
the association has opened certain offices, contending
that the personnel operating these offices are "agents"
of the association within the meaning of that term as
used in the Rules and Regulations. The personnel who
work at the offices in question sign an employment con-
tract with the assooiation in which they are designated
as "agents" of the association. The facts, as stated
in the deposition, indicate no substantial difference
in the association's treatment of the personnel who
are designated as "agents" and the association's treat-
ment of the personnel designated as "employees." The
association treats the "agents" and "employees" in a
similar manner in the following instances:
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Honorable James 0. Gerst, Page 2 (G-335)
1. The “agents” receive regular monthly compensa-
tion.
2. The “agents” are considered to be employees by
the association for purposes of the association’s federal
income tax returns.
3. The “agents” are considered to be employees by
the association for the purpose of the association’s un-
employment insurance.
4. The “agents” participate in the association’s
group medictl plan, and there is no distinction between
the ‘agents and the “employees” in the coverage extended
to participants.
5. The “agents” are protected under the association’s
workman’s compensation insurance In the same manner that
“employees” are protected.
6. The “agents” are paid a year-end bonus based
on the same criteria which are considered for the pay-
ment of a year-end bonus to “employees.”
7. The “agents” do not have expenses In connection
with the operation of the offices in question, as all
overhead is paid by the association.
8. The “agents” are reimbursed for expenses they
incur while working for the association in the same
manner that the “employees” are reimbursed.
9. The association deducts wlthholdlng and social
security taxes from the compensation paid the “agents”
just as it does from the compensation of “employees.”
10. The “agents” are required to turn time cards
In to the association just as the “employees” are re-
quired to do.
11. The “agents” have the same vacation benefits
a8 “employees. ”
12. The “agents” are under the direct control and
supervision of the association In the performance of
their duties, just as the “employees.”
When the definition of “agency” as stated In the
Rules and Regulations Is applied to these facts, the
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Honorable James 0. Gerst, Page 3 (c-335)
question of whether the offices opened by the association
are operating within the Rules and Regulations turns on
whether the personnel operating the offices in question
are "regular employees" of the association. If these
personnel are "regular employees" of the association,
the offices are not being operated within the framework
of the Rules and Regulations.
The only distinction between the "agents" and other
employees of the asso$iation is the employment contract
Figned b% the "agents in which the personnel are called
agents. It is well settled that a party to a contract
who is designated as an "agent" in the contract is not
an "agent" merely because of such designation. The
exact relationship Is determined by the legal effect
of the provisions of the contract. 2 Tex.Jur.2d 446,
Agency, Section 10. The contract in question is attached
to the deposition as Exhibit 1, and it provides for regu-
lar compensation, payment of all operating costs by the
association, and control of the "agents" by the associa-
tion as to the procedures ,to follow in handling loans,
office hoursEnd provisions for time and termination of
the relationship.
Further evidence showing that there is no material
difference between the personnel designated as "agents"
and those personnel designated as "employees" is found
in testimony of the association's president on page 28
of the enclosed deposition wherein the president of the
association made the following statements in response
to questioning:
"Q. If the application for a loan office
is granted, would there be anything required
to be done to the records of the association
to change these persons involved in the agencies
to be carried as employees?
"A ~ Yes
“Q. What would have to be done?
"A. These contracts would have to be re-
done, for one thing.
“Q. Insofar as your books and records, pay-
roll, medical, anything of that sort--
"A. No
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Honorable James 0. Gerst, page 4 (C-335)
“Q. --is there anything that would have
to be done?
“A . No, not that I know of.
'IQ. And the difference would simply be to
dispose of the contract, because then, they
would be an employee, as you would see it, is
that right? - -
"A . Assuming we retained them as employees."
When all of the facts concerning the similarity in
the treatment of 'Iagents" and "employees" by the associa-
tion are considered, it is clear that the "agents" are
actually regularly employed personnel of the association.
Since, under the facts stated in the deposition furnished
with your opinion request, there is no material distinc-
tion made by the association between "agents" and "regu-
lar employees," the operation of the facilities in ques-
tion does not constitute the oueration of an "agencv"
within the meaning of that term as defined in the Rules
and Regulations.
SUMMARY
-------
The operation of certain savings and loan
facilities does not come within the meaning
of "agency" as that term is defined in Sec-
tion 3.1 of the Rules and Regulations for
Savings and Loan Associations adopted November
15, 1963, or The Rules and Regulations for
EWildlng and Loan.Ass'ociations, adopted Jan-
uary 29, 1958, and amended November 6, 1960.
Very truly yours,
WAGGONER CARR
Attorney General of Texas
JWF:ced
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Honorable James 0. Gerst, Page 5 (C-335)
APPROVED:
OPINION COMMITTEE
W. V. Geppert, Chairman
Joe R. Long
Paul Phy
W. 0. Shultz
Kerns Taylor
APPROVED
FOR THE ATTORNEY
GENERAL
BY: ROGERTYLER
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