Case ID: pa-d-c_14/html/0766-01.html
Source: Caselaw Access Project
Author: {"author": "Saylor, Dep. Att’y-Gen.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Mortgage Guarantee Companies.
    June 25, 1930.
   Saylor, Dep. Att’y-Gen.,

You have requested an opinion on your right to examine and supervise mortgage guarantee corporations which do not have the power to receive and do not receive deposits.

In the opinion of this department to your department under date of May 10, 1926, Corporations Guaranteeing Mortgages, 7 D. & C. 651, it was stated that Pennsylvania corporations formed for the purpose of guaranteeing mortgages are subject to the supervision and regulation of your department. No distinction, however, was drawn in that opinion between mortgage guarantee corporations having the power to receive and receiving money on deposit and for safe-keeping and such corporations not having and not exercising such power.

Section 4 of the Banking Act of June 15, 1923, P. L. 809, provides, inter alia, as follows:

“The said supervision, duties, and powers shall extend and apply to the following corporations now or hereafter incorporated under the laws of this state or under the laws of any other state and authorized to transact business in this state; namely, all such corporations having power to receive and receiving money on deposit or for safe-keeping otherwise than as bailee, including all banks, banking companies, cooperative banking associations, trust, safe deposit, real estate, mortgage, title insurance, guarantee, surety, and indemnity companies, saving institutions, savings banks and provident institutions. . . .”

It is clear that the legislature in enacting this law did not intend that the Department of Banking should have under its supervision mortgage guarantee companies unless such companies not only had the power to receive, but also did receive money on deposit or for safe-keeping otherwise than as bailee. It would appear, therefore, that unless a mortgage guarantee corporation actually has the charter power to receive money on deposit or for safe-keeping and exercises such power, it is not within the scope of the Banking Act of 1923 and does not, therefore, come under the supervision, duties and powers of your department.

You are, therefore, advised that a mortgage guarantee company not having the power to receive and receiving money on deposit or for safe-keeping is not within the supervision of your department. Consequently, you are not required by law to demand called reports of such companies nor to examine them.

Prom C. P. Addams, Harrisburg, Pa.