## TEEATTORNEYGENERAL OF TEXAS

February 11, I!??!



### Eon. J. lb Falkner, 

### ComMasloner &ate Department of Banking Capftal Hatfonal BankBulldihg 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 Youhave 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 bankbuilding, approximately 185 feet rrom 

### the property line of the main bankto the property line OS ‘the drive-in bank violates the provisions 

### of Article 3420 903, Vernonls 

### Civil Statutsqthe Texas 

### Banking Code of 1943. IOUhave 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 irrbusiness In more 

### than one plaCe, 

### maintain any branch office, or cash checks or,~receioe aeporfts except in itr ownbankine house.* The.following is a rough aketch OSthe proposed location oi the rwv banking facillt iesr

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

are to be Youhave indicated that the following transactions

handled at the newfacilities: (1) The personal loan department of the Marehali National Bankwill be movedto thennewdrWe-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 amountby a few dollars mayalso be madeat 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’newfacilities, with additional employees behind a counter on the inside of the drive-in 

### building to handle the walk-in customers.

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



### (5) Cashier’s checka, 

### bank drafts bankmcmsyorder; and’traveler’s checks will 

### nqt be issued at &hodrive-in.

Thebank 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 upto five pounds.

:A21 Thetellers will not send each item received to the main bank immediately, but it ie contemplated that items meybe transmltted’to the main bank at about fiiteed or 

### twenty minute intervals.



## (3)Aclosed circuit TVwill be installed between the drive-in 

### and bookkeeping andproof department in the main bank. ,(4) Currency will be kept in the mainbankvault over-night. However, a fireproof vault with a silver chest till1 lazayintained at the 

### drive-in, and silver will bg kept in that

. 

### (5) Thepersonal loan department records will be maintained at the drive-in. I. , :,., ?

,., :aon. J. NoFalkner, page 3 (WW-22)

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

### mainbank at closing e,achday.

(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 moneyrepayable toethe order of the depositor, the discounting of commercial paper, the lasuanc the loaning of moneyupon security. 704, 23 L.&i.’ ‘Gil; 9C.J.S. 31; 2011 Volume 1, Section 67.

Manyof 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 maybe sufficient to bring the institution within the regulations e 109 8. aseed by the state relative to banks. gali v. Ooseett,

.2d 340 (Tsx.Civ.App. 1937); Zollmann, &,c& and&A&&& Volume 1, Section 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 Bankactually proposes a technical “branch bank” for Article 342-903 is not limited to technical branch bar&&g.

Asnoted 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 ownbanking 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” andrelated questions, we are in agreement with your conclusion that’ the pro? posed plan of the Marshall Iiational Bankviolates the provisions of&ticle 342-903.

We are’ of the opinion that lf.~the proposed plan Is put Into effect the Marshall National Bankwould be engaged in bueiness in morethan one place in violation of the statute.

Title 12, U.S.C.A. banks to establish and operage branches Iif such establishment Section 36? authorizes nationalRon. 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.” Asthe 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 sowould 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 weunderstand to be undisputed fact 9.

Theproposed 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, WILLWILSON Attorney General of Texas

;yM~@+ Will D. Davis Assistant WDDrtib APPROVE: OPINIONCODMITTS BYII. Grady Chandler, Chairman