TEEATTORNEYGENERAL 

OF TEXAS 

February 11, I!??! 

Eon. J. lb Falkner, ComMasloner 

&ate Department of Banking 

Capftal Hatfonal Bank Bulldihg 

hrttm; Taxas ,’ 

Opinion Ilo., w-22, 

/ 

lie: Whether the proposed plan of the 

Narshall IVatlonal Bank, Marshall, 

Texas, to provide additional bank4 facilities i8 in violation of 

Articla 342-903, V.C.S., Texas 

Banking Cods of 1943. 

Deer Slrr 

You have asked our opinfon as to whether t&e proposed plan of the Marshall National Bank, Marshall, Texas 

to build and install drive-in facilities in the neti block 

vest of the main bank building, approximately 185 feet rrom 

the property line of the main bank to the property line OS 

‘the drive-in bank violates the provisions of Article 3420 

903, Vernonls Civil Statutsqthe Texas Banking Code of 1943. 

IOU have indicated that it is your opinion that the proposed 

plan aor8 violate 4rticlr 342-903. 

Article 342-903, ‘V.C.S., provider as iollovsr 

Vo state, nationPI or private bank shall: 

engage irr business In more than one plaCe, maintain any branch office, or cash checks or,~receioe 

aeporfts except in itr own bankine house.* 

The.following is a rough aketch OS the proposed location oi the rwv banking facillt iesr 

’ $rREEr 
Hon. J. M. Falkner, page 2 (WW-22) 

are to be 

You have indicated that the following transactions 

handled at the new facilities: 

(1) The personal loan department of the Marehali 

National Bank will be moved to then new drWe-In building and 

all personal loans of $500 or less will be handled in the new 

building. The $500 limit is only an approximate ,limit, and 

loans that exceed that amount by a few dollars may also be 

made at the drive-in. 

(2) The drive-in ~113 have three teller stations 

for accepting deposits, cashing checks, and accepting payments ,011 ‘notes. 

,(3) %Jalk-in*1 as’ we13 as Wrlve-inll service IS contemplated at the’ new facilities, with additional employees 

behind a counter on the inside of the drive-in building to 

handle the walk-in customers. 

(4) A fireproof night depository vault will be maintained at the drive-in. 

(5) Cashier’s checka, bank drafts bank mcmsy order; 

and’ traveler’s checks will nqt be issued at &ho drive-in. 

The bank has proposed the following method of opera-’ 

thonr 

(1) The drive-in building will, be connected to the 

main bank by two underground pneumatic tubea, each five inches 

in diameter, which will carry up to five pounds. 

:A21 The tellers will not send each item received to 

the main bank immediately, but it ie contemplated that items 

mey be transmltted’to the main bank at about fiiteed or twenty 

minute intervals. 

(3) A closed circuit TV will be installed between 

the drive-in and bookkeeping and proof department in the main 

bank. 

,(4) Currency will be kept in the main bank vault 

over-night. However, a fireproof vault with a silver chest till1 

lazayintained at the drive-in, and silver will bg kept in that 

. 

(5) The personal loan department records will be 

maintained at the drive-in. I 
. , : ,., ? 

,., 

:aon. J. No Falkner, page 3 (WW-22) 

., 

(6) Records of tehers’ balances will be sent to the 

main bank at closing e,ach day. 

(7) Supplies n,eoessary for operation will be kept at. 

the drive-in. 

While the powers of a state bank ln Texas are enumerated in,Article.342-301, V.C.S., most of the decisions throughout the United States recognize that the ordinary essentlal’fetures of the banking business are the power to accept deposits 

of money repayable toe the order of the depositor, the discounting of commercial paper, the lasuanc 

the loaning of money upon security. 

704, 23 L.&i.’ ‘Gil; 9 C.J.S. 31; 2011 

Volume 1, Section 67. 

Many of the decisions and authorities throughout the 

United States recognize that not all of these banking functions 

need be exercised in order to constitute an institution a bank. 

The exercise of some of the functions of banking such as loaning money, selling bonds, receiving deposits or cashing checks 

may be sufficient to bring the institution within the regulations 

109 8. e 

aseed by the state relative to banks. gali v. Ooseett, 

.2d 340 (Tsx.Civ.App. 1937); Zollmann, &,c& and &A&&& 

Volume 1, Sect ion 67. Three excellent annotations on the constituent elements of branch banking are found in 30 A.L.R. 927, 

$I A.L.R. 1340, and 136 A.L.R. 471. However, it is not neceesary for us to determine whether the plan of the Marshall ,National Bank actually proposes a technical “branch bank” for 

Article 342-903 is not limited to technical branch bar&&g. 

As noted above, Article 342-903 provides that no state, 

national or prlv.ate bank shall (1) engage in business in more 

than one place, (2) maintain any branch office, nor (3) cash 

checks or receive deposits except In its own banking house. After a thorough and exhaustive review of the decisions of the 

various state and federal courts and prior opinions of this office passing upon the question of “branch banking” and related 

questions, we are in agreement with your conclusion that’ the pro? 

posed plan of the Marshall Iiational Bank violates the provisions 

of &ticle 342-903. 

We are’ of the opinion that lf.~the proposed plan Is put 

Into effect the Marshall National Bank would be engaged in bueiness in more than one place in violation of the statute. 

Title 12, U.S.C.A. 

banks to establish and operage branches Iif such establishment 

Sect ion 36? authorizes national 
Ron. J. M. Falkner, page 4 (W-22) 

and operation are at the time authorized to state banks by the 

statute law of the state in question.” As the Texas Constitu-’ 

tlon, Section 16 of Article XVI, and Article 342-503, V.C.S., 

the Texas Banking Code of 1943, prohibit such aetlvity, the 

Narshall National Bank, Marshall, Texas, is without authority 

under federal law to provide the additional banking facilities, 

and in doing so would violate the provisions of Article 342- 

903, V.C.S. 

This opinion is necessarily limited to the facts of 

the situation as set out herein, which we understand to be undisputed fact 9. 

The proposed plan of the Marshall National Bank, 

Marshall, Texas, to construct additional banking facilities in the next block west of its main bank 

would be in violation of Article 342-903, V.C.S., the 

Texas,Banklng Code of 1943. 

Yours very truly, 

WILL WILSON 

Attorney General of Texas 

;yM~@+ 

Will D. Davis 

Assistant 

WDDrtib 

APPROVE: 

OPINION CODMITTS 

BY II. Grady Chandler, 

Chairman