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 bankingfacilities in military camps and naval yards under Section 10, of PublicLaw 603, of the~77th Congress, ale0 whetherState chartered banks
are given such authority under thle statuta.

You requestour opinion with respect to the matters mentioned in your letterae follows:

"An opinion from your office is requested concerning the authority

of national

banks in establishing banking facilities

in militarycamps and naval yards,alleged to have been provided by Section 10 of Public' Law 603 of the 77th Congress;

also whetherState chartered FederalBeeeme Member banka and thosenon-member insured

State banke are given equal authority under this statute

with those operating under nationalcharter."

In opinion

No. O-5451under date of July 26, 1943, we advised you with respect to the above cited subject matter 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 1.603 was defeatedin the Congrese.
Section 265, Title 12, U.S.C.Annotated, which Is the Act referredto 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 Treaeuryshall be depositaries of public money of the United Statee **(inaluding,** withoutbeing limited to, revenuee

and 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.a offioere,

agents,or employees,

and Poetal Savings funds),and the SecretaryisHonorable John Cl.

l&Adams,

Page 2 (O-5451-A)

hereby authorized

to deposit

pub110money 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 performall euoh reaeonable dutiee, a6 depoeltarlee

of publio

money and finanoialageti$e of the ,Oovermentae may be required of them. The Secretary of the Treasuryshall requireof the insured banke thus deeignated satiefaotory security

by the depoeitof Udited States bonde or otherwise, for the safekeeping and promptpayment 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 paymentof 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 Stateshaving 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 depositorin such ouetodial oapaoltyseparate

and dietimt from any other offioer, employee,

or agent of the United Stateshaving official custodyof 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 continuein effect any regulations, rulings,

or lnetxuctione,
or enter into or approveany dontracts or performany 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 controlof the United Statee ae,truetee or otherwiee

which ehalldiecrlmlnate again&,or prefer national

bankingassociations, State banksmembereof the Federal

Reserve System,or insured banke not members of the Federal

Reseme System,by olaee, or which shall require those enjoyingthe benefits, directly

or indlreotly,

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

herewithare hereby repealed. The terms 'lneured hank' and 'insured deposit'

ae used in this sectionehall be oonetrued

according

to the defiultione

of euoh terme in eeotion264 of thie title."

We-wlll~anewer your questions in their Inverse

order.

1. The Act of Congressdoes not purport to odnfer eny corporatepower upon the State chartered inatltutlone,

nor indeedoould 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 thereinthat the regulations stipulated

shall not "discriminate againstor prefernational banking associations,

State banksmembers of the FederalReserveSystem,by class, or which shall require those enjoyingthe benefits, directly

or indirectly

of disbursed

public funds so to discriminate," could not by any reasonable

construction

be held to enlargethe 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 stockhas 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 shallbe designated in its charter.

* * * * *

Frrxa this it follows~that no State chart&M banking institution may have a branchbank, or exeroisethe banking privileges

throughfacilities for bankingat any place other than the one named in its charter.

2. Weltherdoes Section 265 of Title 12 purport to authorize national

associations

to establish

branchbanks 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 enforcementauthorities of the State, and requires no answer in this opinion.

APPROVED

OOT 14, 1943 Yours very truly

Id GroverSellers A!PJ!CRIiRYGRNERALOFTEIAS

F?RSTASSISl%WTATI0PRRYGEIiRRAL By /s/ Ocie Speer Ocie Speer APPROVER

OPJNIOR Assistant COMMITThT

BY B.W.B. CHAIRMAR

OS%ff-dS