GERAlDC.MANN
Avnx-IN 1Z.TP.XAS
HonorableJohnQ.ldoAdame
‘Ccmuais~ioner,
Departmentof Banking
Auetln, Texae
Dear Mr. I&Adams: OpinionNo. O-5451-A
Re: Authorityof NationalBanking
Associationsto establish
bankingfacilitiesin military
camps and naval yards under
Section 10, of PublicLaw 603,
of the~77th Congress,ale0
whetherState charteredbanks
are given such authorityunder
thle statuta.
You requestour opinionwith respectto the mattersmentioned
in your letterae follows:
"An opinionfrom your office is requestedconcerning
the authorityof nationalbanks in establishingbanking
facilitiesin militarycamps and naval yards,allegedto
have been providedby Section 10 of Public'Law 603 of the
77th Congress;also whetherState charteredFederalBeeeme
Member banka and those non-memberinsuredState banke are
given equal authorityunder this statutewith those oper-
ating under nationalcharter."
In opinionNo. O-5451under date of July 26, 1943, we advised
you with respectto the above cited subjectmatter aeeumlngthat S 1603
(U.S.C.Title 12, section36) had been duly enacted,but which now appears
to be not the caee. In truth S 1.603was defeatedin the Congrese.
Section 265, Title 12, U.S.C.Annotated,which Is the Act
referredto In your present inquiryand which wae paeeedJune 11, 1942,
la aa follows:
"All insuredbanks designatedfor that purposeby the
Secretaryof the Treaeuryshall be depositariesof public
money of the United Statee (inaluding, withoutbeing limited
to, revenueeand funds of the United States,and any funds
the depositof which ie subject to the controlor regulntion
of tie United States or any of 1t.aoffioere,agents,or
employees,and Poetal Savings funds),and the Secretaryis
HonorableJohn Cl.l&Adams,Page 2 (O-5451-A)
hereby authorizedto depositpub110money in su+dapbsitar$ee,
under euoh regulationeas may be preeoribedby tie Sdoretary;'
and they may also be employed(LBfinanoialagenteof the
Government;and they shall performall euoh reaeonabledutiee,
a6 depoeltarleeof publiomoney and finanoialageti$e of the
,Oovermentae may be requiredof them. The Secretaryof
the Treasuryshall requireof the insuredbanke thus deeig-
nated satiefaotorysecurityby the depoeitof Udited States
bonde or otherwise,for the safekeepingand prompt payment
of publicyney depositedwith than and for the falthfil
perfonuanoeof their duties as finanoialagente of the
Coveroment:provided,That no such securityshall be required
for the safekeepingand prompt paymentof euoh parte of the
depoalteof the publionioneyin such banke as are insured
depoaitaand eaoh offiaer,employee,or agent of the United
States having offloialcuetadyof public funds and lawfully
depositingthe seme in ah insuredbank shall, for the purpose
of determiningthe amount of the ineureddeposits,be deemed
a depositorin such ouetodialoapaoltyseparateand dietimt
from any other offioer,employee,or agent of the United
States having officialcustodyof publio funds and lawfully
depositingthe eame in the came ineuredbank in ouatodlal
capacity. Wotwlthetanding any other provisionof law, no
department;,board, agency, instrunentality, officer,employee,
or agent of the United States ahall leeue or permit to
continuein effect any regulations,rulings,or lnetxuctione,
or enter into or approveany dontractsor performany other
aote having to do with the deposit,diebureement,or expendl-
ture of public funds,or the deposit,ouetody,or advanceof
funds subjectto the controlof the United Statee ae,truetee
or otherwieewhich ehalldiecrlmlnateagain&,or prefer
nationalbankingassociations, State banks membereof the
FederalReserve System,or insuredbanke not members of the
FederalReseme System,by olaee, or which shall require those
enjoyingthe benefits,directlyor indlreotly,of dlebureed
pub110 funds 80 to discriminate.All Aote or parts tier&of
in conflictherewithare hereby repealed. The terms 'lneured
hank' and 'insureddeposit'ae used in this sectionehall
be oonetruedaccordingto the defiultioneof euoh terme in
eeotion264 of thie title."
We-wlll~anewer your questionsin their Inverseorder.
1. The Act of Congressdoes not purportto odnfereny cor-
porate power upon the State charteredinatltutlone, nor indeedoould
it do 80, for that would'bebeyond the Conetitutiotil power of the
United States ae one not delegatedby the States to the United States,
under Article 10, of the Constitutionof the United States.
- .
HonorableJohn Q. HoAdams,Page 3 (O-5451-A)
Seotion 265 has for its purpose the regulationof depooidarics
of the public.
money. The provisocontainedthereinthat the regulations
stipulatedshall not "discriminate againstor prefernationalbanking
associations, State banks members of the FederalReserveSystem,by
class, or which shall requirethose enjoyingthe benefits,directlyor
indirectlyof disbursedpublic funds so to discriminate," could not by
any reasonableconstructionbe held to enlargethe corporatepowers of
State charteredbanking institutions.
Section 16, ArticleXVI of the State Constitutioncontainsthe
followingparagraph:
"* * * l No such corporatebody shall be chartereduntil
all of the authorizedcapitalstock has been subscribedand
paid for in full in cash. Such body corporateshall not be
authorizedto engage in businessat more than one place which
shall be designatedin its charter.* * * * *
Frrxathis it follows~thatno State chart&M banking institution
may have a branch bank, or exeroisethe bankingprivilegesthroughfacili-
ties for bankingat any place other than the one named in its charter.
2. Weltherdoes Section 265 of Title 12 purport to authorize
nationalassociationsto establishbranchbanks at any place other than
the place of its authorizeddomicile. It does not deal with such sub-
ject at all.
Whether or nor a nationalassociationwould be violatingany law
of the United States or of the State in establishinga branch bank in this
State is a questionfor the considerationof the law enforcementauthori-
ties of the State, and requiresno answer in this opinion.
APPROVEDOOT 14, 1943 Yours very truly
Id GroverSellers A!PJ!CRIiRYGRNERALOFTEIAS
F?RSTASSISl%WTATI0PRRYGEIiRRAL By /s/ Ocie Speer
Ocie Speer
APPROVEROPJNIOR Assistant
COMMITThTBY B.W.B. CHAIRMAR
OS%ff-dS