GERAlDC.MANN Avnx-IN 1Z.TP.XAS 

HonorableJohnQ.ldoAdame 

‘Ccmuais~ioner, Department of Banking 

Auetln, Texae 

Dear Mr. I&Adams: Opinion No. O-5451-A 

Re: Authority of National Banking 

Associations to establish 

banking facilities in military 

camps and naval yards under 

Section 10, of Public Law 603, 

of the~77th Congress, ale0 

whether State chartered banks 

are given such authority under 

thle statuta. 

You request our opinion with respect to the matters mentioned 

in your letter ae follows: 

"An opinion from your office is requested concerning 

the authority of national banks in establishing banking 

facilities in military camps and naval yards, alleged to 

have been provided by Section 10 of Public' Law 603 of the 

77th Congress; also whether State chartered Federal Beeeme 

Member banka and those non-member insured State banke are 

given equal authority under this statute with those operating under national charter." 

In opinion No. O-5451under date of July 26, 1943, we advised 

you with respect to the above cited subject matter aeeumlng that S 1603 

(U.S.C. Title 12, section 36) had been duly enacted, but which now appears 

to be not the caee. In truth S 1.603 was defeated in the Congrese. 

Section 265, Title 12, U.S.C. Annotated, which Is the Act 

referred to In your present inquiry and which wae paeeed June 11, 1942, 

la aa follows: 

"All insured banks designated for that purpose by the 

Secretary of the Treaeury shall be depositaries of public 

money of the United Statee (inaluding, without being limited 

to, revenuee and funds of the United States, and any funds 

the deposit of which ie subject to the control or regulntion 

of tie United States or any of 1t.a offioere, agents, or 

employees, and Poetal Savings funds), and the Secretary is 
Honorable John Cl. l&Adams, Page 2 (O-5451-A) 

hereby authorized to deposit pub110 money in su+dapbsitar$ee, 

under euoh regulatione as may be preeoribed by tie Sdoretary;' 

and they may also be employed (LB finanoialagente of the 

Government; and they shall perform all euoh reaeonable dutiee, 

a6 depoeltarlee of publio money and finanoialageti$e of the 

,Ooverment ae may be required of them. The Secretary of 

the Treasury shall require of the insured banke thus deeignated satiefaotory security by the depoeit of Udited States 

bonde or otherwise, for the safekeeping and prompt payment 

of public yney deposited with than and for the falthfil 

perfonuanoe of their duties as finanoial agente of the 

Coveroment: provided, That no such security shall be required 

for the safekeeping and prompt payment of euoh parte of the 

depoalte of the publio nioney in such banke as are insured 

depoaita and eaoh offiaer, employee, or agent of the United 

States having offloialcuetady of public funds and lawfully 

depositing the seme in ah insured bank shall, for the purpose 

of determining the amount of the ineured deposits, be deemed 

a depositor in such ouetodial oapaolty separate and dietimt 

from any other offioer, employee, or agent of the United 

States having official custody of publio funds and lawfully 

depositing the eame in the came ineured bank in ouatodlal 

capacity. Wotwlthetanding any other provision of law, no 

department;,board, agency, instrunentality, officer, employee, 

or agent of the United States ahall leeue or permit to 

continue in effect any regulations, rulings, or lnetxuctione, 

or enter into or approve any dontracts or perform any other 

aote having to do with the deposit, diebureement, or expendlture of public funds, or the deposit, ouetody, or advance of 

funds subject to the control of the United Statee ae,truetee 

or otherwiee which ehalldiecrlmlnate again&, or prefer 

national banking associations, State banks membere of the 

Federal Reserve System, or insured banke not members of the 

Federal Reseme System, by olaee, or which shall require those 

enjoying the benefits, directly or indlreotly, of dlebureed 

pub110 funds 80 to discriminate. All Aote or parts tier&of 

in conflict herewith are hereby repealed. The terms 'lneured 

hank' and 'insured deposit' ae used in this section ehall 

be oonetrued according to the defiultione of euoh terme in 

eeotion 264 of thie title." 

We-wlll~anewer your questions in their Inverse order. 

1. The Act of Congress does not purport to odnfer eny corporate power upon the State chartered inatltutlone, nor indeed oould 

it do 80, for that would'be beyond the Conetitutiotil power of the 

United States ae one not delegated by the States to the United States, 

under Article 10, of the Constitution of the United States. 
- . 

Honorable John Q. HoAdams, Page 3 (O-5451-A) 

Seotion 265 has for its purpose the regulation of depooidarics 

of the public. money. The proviso contained therein that the regulations 

stipulated shall not "discriminate against or prefer national banking 

associations, State banks members of the FederalReserve System, by 

class, or which shall require those enjoying the benefits, directly or 

indirectly of disbursed public funds so to discriminate," could not by 

any reasonable construction be held to enlarge the corporate powers of 

State chartered banking institutions. 

Section 16, Article XVI of the State Constitution contains the 

following paragraph: 

"* * * l No such corporate body shall be chartered until 

all of the authorized capital stock has been subscribed and 

paid for in full in cash. Such body corporate shall not be 

authorized to engage in business at more than one place which 

shall be designated in its charter. * * * * * 

Frrxa this it follows~that no State chart&M banking institution 

may have a branch bank, or exeroise the banking privileges through facilities for banking at any place other than the one named in its charter. 

2. Welther does Section 265 of Title 12 purport to authorize 

national associations to establish branch banks at any place other than 

the place of its authorized domicile. It does not deal with such subject at all. 

Whether or nor a national association would be violating any law 

of the United States or of the State in establishing a branch bank in this 

State is a question for the consideration of the law enforcement authorities of the State, and requires no answer in this opinion. 

APPROVED OOT 14, 1943 Yours very truly 

Id Grover Sellers A!PJ!CRIiRYGRNERALOFTEIAS 

F?RSTASSISl%WTATI0PRRYGEIiRRAL By /s/ Ocie Speer 

Ocie Speer 

APPROVER OPJNIOR Assistant 

COMMITThT BY B.W.B. CHAIRMAR 

OS%ff-dS