United States Court of Appeals,

Fifth Circuit.

No. 92-2010.

VARIABLE ANNUITY LIFE INSURANCE CO., Plaintiff-Appellant,

v.

Robert L. CLARKE, Comptroller of the Currency, the Office of the

Comptroller of the Currency, the United States of America, NCNB

National Bank of North Carolina, Defendants-Appellees.

Aug. 26, 1993.

Appeal from the United States District Court for the Southern

District of Texas.

Before GOLDBERG, JOLLY, and WIENER, Circuit Judges.

GOLDBERG, Circuit Judge:

In an opinion letter issued on March 21, 1990, the Comptroller

of the Currency determined that § 24(7) of the National Bank Act,

which grants national banks the power to engage in incidental

activities necessa ry to the business of banking, authorizes

national banks to sell annuity contracts. The Comptroller also

concluded that 12 U.S.C. § 92, which permits national banks to act

as insurance agents in towns with less than 5,000 inhabitants, does

not limit national banks' power to sell insurance in towns with a

population of over 5,000; and in any case, that annuities are not

a form of insurance. The district court deferred to the

Comptroller 's interpretation of §§ 92 and 24(7) of the National

Bank Act, 786 F.Supp. 639. We reverse, finding that under § 92 of

the Act, national banks may not sell annuities in cities with more

than 5,000 inhabitants.

We begin by giving a broad adumbration of our analysis. As a

threshold matter we affirm the existen ce of § 92. The D.C.Circuit's finding that § 92 was "repealed" by Congress was recently

rejected by the Supreme Court which found § 92 to b e alive and

well. The plain language of § 92, as interpreted by this court in

Saxon v. Georgia Association of Independent Insurance Agents, 399

F.2d 1010 (5th Cir.1968), prohibits national banks from selling

insurance products in towns with a population larger than 5,000.

Because we conclude that annuities are a form of insurance, we hold

that § 92 bars national banks from selling annuities in cities with

a population larger than 5,000. The Comptroller's determination

that banks may sell annuities pursuant to the "incidental" powers

provision of the National Bank Act, 12 U.S.C. § 24(7), is erroneous

becau se the specific limitation on national banks' power to sell

insurance contained in § 92 controls the general grant of

incidental powers in § 24(7).

BACKGROUND

On August 8, 1989, NationsBank of North Carolina ("NCNB"), a

national bank based in Charlotte, North Carolina, sought permission

from the Comptroller of the Currency to sell fixed and variable

annuity contracts through its wholly-owned subsidiary NationsBanc

Securities. NCNB proposed to sell the annuity contracts as an

agent for various life insurance companies in cities with more than

5,000 inhabitants. On March 21, 1990, the Comptroller issued an

opinion letter approving NCNB's proposed sale of annuities, finding

that the sale of annuities is within the power of nat ional banks

under the National Bank Act. The Comptroller reasoned that "[a]s

part of their traditional role as financial intermediaries, banks

have broad powers to buy and sell financial investment instrumentsas agents for customers

... [and] [a]lthoug h annuities have

historically been a product of insurance companies, they are

primarily financial investments."

Challenging the Comptroller's approval of NCNB's proposed sale

of annuities, the Variable Annuity Life Insurance Company ("VALIC")

filed the instant lawsuit in the Southern District of Texas seeking

declaratory and injunctive relief. VALIC is an insurance company

which underwrites and sells fixed and variable annuity contracts in

all fifty states, and would be in direct competition with the

NCNB's sale of annuities. In its motion for summary judgment,

VALIC argued that NCNB's proposed sale of annuities violates 12

U.S.C. § 92, which prohibits national banks from selling insurance

products in towns with a population larger than 5,000. The

Comptroller and the NCNB filed cross motions for summary judgment,

claiming inter alia that § 92 does not limit the powers of national

banks and that § 92 does not apply to the sale of annuities.

The district court granted appell ees' cross motions for

summary judgment, and denied VALIC's motion for summary judgment.

The district court determined that it "must defer to the

Comptroller's interpretation of the National Bank Act, so long as

the interpretation is reasonable." Finding that the Comptroller's

interpretation "was more than a reasonable constr u ction," the

district court affirmed the Comptroller's approval of the proposed

annuities sale.

ANALYSIS

On appeal, the central question before us is whether 12 U.S.C.

§ 92 prohibits banks from selling annuities in cities with morethan 5,000 inhabitants. "When an appeal is taken from summary

judgment, we review the district court's actions de novo, applying

the same standard used by the district court. (citation omitted)

When, as here, questions of law control the disposition on summary

judgment, we must subject the controverted issues to full appellate

review." T exas Commerce Bank, Forth Worth, N.A. v. United States,

896 F.2d 152, 155 (5th Cir.1990). S ee also Farmers-Merchants Bank

and Trust Co. v. CIT Group/Equipment Financing, Inc., 888 F.2d

1524, 1526 n. 3 (5th Cir.1989) (questions of law subject to de novo

review).

Before discussing the applicability of § 92 to the facts of

the i nstant case, we must first dispel any lingering existential

doubts regarding § 92's viability. Section 92 of Title 12 was

enacted in 1916 as part of the Act of Sept. 7, 1916, 39 Stat. 753.

In Independent Insur ance Agents, Inc. v. Clarke, 955 F.2d 731

(D.C.Cir.1992), the D.C. Circuit held that § 92 was repealed by

Congress in 1918, and is no longer in force. The I ndependent

Insurance Agent s court found that the 1916 Act placed § 92 in

Rev.Stat. § 5202, and that in 1918 Congress eliminated § 5202, thus

eliminating § 92. Relying on the D.C. Circuit's analysis, the NCNB

argues that § 92 does not exist.

While the appeal in the instant case was pending, the Supreme

Court granted a writ of certiorari to review the D.C. Circuit's

opinion in Independent Insurance Agents. Because the existence or

nonexistence of § 92 is central to the disposition of the instant

case, we withheld the issuance of this opinion while we waited for

the Supreme Court to resolve the question raised by the D.C.Circuit: whether § 92 was to be, or not to be. The answer has

come: § 92 is to be. The Supreme Court rejected the D.C.

Circuit's analysis, finding that "the 1916 Act placed § 92 not in

Rev.Stat. 5202 but in § 13 of the Federal Reserve Act," and "since

the 1918 Act did not touch § 13, it did not affect, much less

repeal, section 92." U nited States National Bank of Oregon v.

Independent Insurance Agents of America, --- U.S. ----, ----, 113

S.Ct. 2173, 124 L.Ed.2d 402, 417 (1993).

Having established the existence of § 92, we must next

determine the applica bility of § 92 to the sale of annuities by

national banks in cities with a population greater than 5,000.

Section 92 provides in relevant part that national banks,

located and doing business in any place the population of

which does not exceed five thousand inhabitants, as shown by

the last preceding decennial census may, under such rules and

regulations as may be prescribed by the Compt roller of the

Currency, act as the agent for any fire, life, or other

insurance company authorized by the authorities of the State

in which such bank is located to do business in such state, by

soliciting and selling insurance and collecting premiums on

policies issued by such company.

Se ction 92 explicitly authorizes national banks in towns with a

population smaller than 5,000 to act as insurance agen ts, and

impliedly prohibits national banks in towns with a population

larger than 5,000 from acting as insurance agents. In S axon v.

Georgia Association of Independent Insurance Agents, we reversed

the Comptroller's ruling that "National banks have the authority to

act as agent in the issuance of insurance" regardless of the size

of the city in which they are operating. 399 F.2d 1010, 1012 (5th

Cir.1968). We held that by application of the ancient maxim of

expressio unius est exlusio alterius (the mention of one thingimplies the exclusion o f another) it is clear that under § 92

"national banks have no power to act as insurance agents in cities

of over 5,000 population." Id. at 1013.

The Saxon court's interpretation of § 92 was recently followed

by the Second Circuit in American Land Title Association v. Clarke,

968 F.2d 150 (2nd Cir.) cert. denied

--- U.S. ----, 113 S.Ct. 2959,

125 L.Ed.2d 660 ( 1993), which reversed a Comptroller's directive

allowing nati onal banks to act as agents for title insurance

companies in cities with a population over 5,000. The Second

Circuit adopted the reasoning of S axon, also finding that the

"maxim expressio unius est exlusio alterius, used as an aid to

construction, leads to the concl usion that Congress intended to

prohibit national banks located and doing business in towns with

over 5,000 in habitants from engaging in the insurance agency

business." Id. at 155.

In interpreting the intended scope of § 92, the Second Circuit

c ogently deduced that "had Congress intended to grant national

banks located in towns with a large population the authority to

sell insurance, it would never have limited the grant of authority

in section 92 to national banks in locations with under 5,000

inhabitan ts." Id. The reasoning of the S axon and American Land

Title courts, that an affirmative grant of a specific power

includes a denial of powers not granted, relies on interpretive

principles that are firmly ensconce d in our jurisprudence. S ee

Botany Worsted Mills v. United States, 278 U.S. 282, 289, 49 S.Ct.

129, 132, 73 L.Ed. 379 (1929) ("when a statute limits a thing to be

done in a particular mode, it inc ludes the negative of any othermode"); National R.R. Passenger Corp. v. Passengers Association,

414 U.S. 453, 458, 94 S.Ct. 690, 693, 38 L.Ed.2d 646 (1974) (same);

Rogers v. Frito-Lay Inc., 611 F.2d 1074, 1085 (5th Cir.) (same)

cert. denied 449 U.S. 889, 101 S.Ct. 246, 66 L.Ed.2d 115 (1980);

Midland Telecasting v. Midessa Television Co., Inc., 617 F.2d 1141,

1145 n. 7 (5th Cir.) (same) cert. denied 449 U.S. 954, 101 S.Ct.

361, 66 L.Ed.2d 219 (1980).

The Saxon and American Land Title courts' interpretation of §

92 is bolstered by the legislative history of § 92. The Chairman

of the Senate Banking and Currency Committee inserted into the

legislative record of § 92 a lett er from the then Comptroller of

Currency, John Skelton Williams. 53 Cong.Rec. 11001 (1916). In

this letter the Comptroller recommended that Congress give national

banks in smal l communities the authority to act as insurance

agents, but the Comptroller added: "It seems desirable from the

standpoint of public policy and b anking efficiency that t his

authority should be limited to banks in small communities." I d.

(e mphasis added) The Comptroller explained that "in many small

places the amount of insurance policies written or mortgages to be

placed on commission is not sufficient to take up the entire time

of an insurance broker, and the bank is not theref ore likely to

trespass upon outside business naturally belonging to others." I d.

The Comptroller and NCNB challenge the S axon court's

inter pretation of § 92, claiming that § 92 does not limit the

powers of national banks located in towns with a population larger

than 5,000. The Comptroller's opinion letter states that it1 The two circuit cases cited by the Comptroller indicating

disagreement with Saxon, Independent Insurance Agents v. Board of

Governors of the Federal Reserve System, 736 F.2d 468, 477 n. 6

(8th Cir.1984) and Independent Bankers Association v. Heimann,

613 F.2d 1164, 1170 n. 18 (D.C.Cir.) cert. denied 449 U.S. 823,

101 S.Ct. 84, 66 L.Ed.2d 26 (1980), discuss Saxon only in dicta. "disagreed with the Saxon court's interpretive a pproach." 1 Stare

decisis notwithstanding, the district court deferred to the

Comptroller's interpretation of § 92, finding that it is "neither

arbitrary nor capricious to view 12 U.S.C. § 92 as a supplemental

power provision and not a limitation on national banks ...," and

that the Comptroller's interpretation of § 92 was "more than a

"permissible construction.' "

The district court's deference to the Comptroller was based on

its reading of Chevron U. S.A., Inc. v. Natural Resources Defense

Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984).

In Chevron, the Court outlined a two step analysis to be followed

by courts reviewing an administrative agency's statutory

interpretation:

When a court reviews an agency's construction of the statute

which it administers, it is confronted with t wo questions.

First, always, is the question whether Congress has directly

spoken to the precise questio n at issue. If the intent of

Congress is clear, that is the end of the matter; for the

court, as well as the agency, must give effect to the

unambiguously expressed intent of Congress. If however, the

court determines that Congress has not addressed the precise

question at issue, the court does not simply impose its own

construction on the statute, as would be necessary in the

absence of an administrative interpretation. Rather, if the

statute is silent or ambiguous with r espect to the specific

issue, the question for the court is whether the agency's

answer is based on a permissible construction of the statute.

Id. at 842-43, 104 S.Ct. at 2781.

The district court deferred to the Co m ptroller's

interpretation of § 92 because it found that Congress had notdirectly addressed the question a t issue. While "[j]udicial

deference to an agency's interpretation of ambiguous provisions of

the statutes it is authorized to implement reflects a sensitivity

to the proper roles of the political and judicial branches," Pauley

v. BethEnergy Mines, Inc.,

--- U.S. ----, ----, 111 S.Ct. 2524,

2534, 115 L.Ed.2d 604 (1991), such deference is not appropriate

under Chevron if the intent of Congr ess is clear. The district

court erred in reaching the second step of the Chevron analysis

because our interpretation of § 92 in Saxon was based on the plain

l anguage of the statute which exhibits Congress' clear intent to

permit only banks in towns with less than 5,000 inhabitants to sell

insurance products. Federal courts are not to defer to an

administrative agency's interpretation of a statute which

frustrates the clear intent of Congress. S ee Presley v. Etowah

County Commissioner, --- U.S. ----, 112 S.Ct. 820, 117 L.Ed.2d 51

(1992) ("we defer to an administrative interpretation of a statute

... only if Congress has not expressed its intent with respect to

the question"); N icklos Drilling Co. v. Cowart, 927 F.2d 828, 831-

32 (5th Cir.199 1) (en banc) (refusing to follow administrative

agency's interpretation when words of statute are unambiguous).

NCNB questions the precedential value of Saxon, noting that

the Sax on decision precedes Chevron by sixteen years. But

regardless of the passage of time, deference under Chevron does not

permit administrative agencies to overrule precedents. S ee

Lechmere, Inc. v. NLRB,

--- U.S. ----, ---- - ----, 112 S.Ct. 841,

8 47-848, 117 L.Ed.2d 79 (1992) ("once we have determined a

statute's clear meaning, we adhere to that determination under thedoctri ne of stare decisis, and we judge an agency's later

interpretation of the statute against our prior determination of

the statute's meaning"); B PS Guard Services Inc. v. NLRB, 942 F.2d

519, 523 (8th Cir.1991) (" Chevron does not stand for the

proposition that administrative agencies may reject, with impunity,

the controlling precedent of a superior judicial body"). While

administrative agencies serve import ant functions, these do not

include the occlusion of the po sitivistic declarations of this

court.

It is plain from the language of the statute, and from the

legislative history, that § 92 prohibits national banks, including

the NCNB, from selling insurance products in towns with a

population greater than 5,000. The NCNB and the Comptroller argue

that even if § 92 prohibits NCNB from selling insurance in towns

with a population greater than 5,000, this prohibition should not

be applied to the instan t case because "annuities are not

insurance." We disagree; annuities are an insurance product, both

historically and functionally.

The Comptroller concedes that "annuities have historically

been a produc t of insurance companies," and Justice Brennan has

likewise observed that "the granting of annuities has been

considered part of the business of life insurance." S ecurities and

Exchange Comm. v. Variable Annuity Life Insurance Co., 359 U.S. 65,

81, 79 S.Ct. 618, 627, 3 L.Ed.2d 640 (1959). S ee also Black's Law

Dictionary, (sixth ed. 19 90) (classifying annuities as a type of

insurance, and defining annuities as " an insurance contract calling

for periodic payments to the insured or annuitant for a stated2 Ala.Code §§ 27-3-6(1), 27-5-3 (1986);

Alaska Stat. § 2109.060(1) (1990);

Ariz.Rev.Stat.Ann. § 20-254 (1990);

Ark.Stat.Ann. §§ 23-64—102(1), (3), (1987);

Cal.Ins.Code § 101 (1977);

Colo.Rev.Stat. § 10-1-102(7) (1990);

Conn.Gen.Stat. § 38-68t(a) (1990);

Del.Code Ann. tit. 18 § 512 (1989);

Fla.Stat.Ann. § 624.602(1) (1990);

Ga.Code Ann. § 33-7-4 (1990);

Haw.Rev.Stat. § 431:1-204 (1985);

Idaho Code §§ 41-103, 41-312 (1977);

Ill.Ins.Code ch. 73, art. I, § 4 (1982);

Ind.Code §§ 27-1-2-3(s) (1986);

Iowa Code § 508.31 (1990);

Kan.Stat.Ann. § 40-401 (1990);

La.Rev.Stat.Ann. § 22:6(1) (West 1969);

Me.Rev.Stat.Ann. tit. 24-A, § 411 (1990);

Md.Ins.Code Ann. Act 48A, §§ 46(1), 65 (1991);

Mass.Gen.L. ch. 175, § 47(16) (1987);

Mich.Comp.Laws Ann. § 500.602 (West 1990);

Minn.Stat.Ann. § 61A.01 (1986);

Miss.Code Ann. § 83-7-1 (1972);

Mo.Rev.Stat. §§ 375.158(2), 376.010 (1968); period or for life") (emphasis added).

All fifty states currently regulate annuities und er their

insurance laws. 2 S ee Securities and Exchange Comm. v. VariableMont.Code Ann. § 33-2-108(2) (1990);

Neb.Rev.Stat. § 44-201 (1990);

Nev.Rev.Stat. § 680A.110 (1988);

N.H.Rev.Stat.Ann. § 408:24 (1983);

N.J.Rev.Stat.Ann. § 17:17-1(c) (1990);

N.M.Stat.Ann. § 59A-7-2 (1988);

N.Y.Ins.Law § 1113(a)(2) (McKinney 1990);

N.C.Gen.Stat. §§ 58-7-15(2), 58-39-15(15) (1990);

N.D.Cent.Code. §§ 26.1-26-11(1), (18) (1990);

Ohio Rev.Code Ann. §§ 3902.02, 3911.01 (1990);

Okla.Stat. tit. 36 § 702 (1990);

Or.Rev.Stat. § 731.170(2) (1990);

40 Pa.Cons.Stat. § 382(a)(1) (1990);

R.I.Gen.Laws § 27-32-1(a) (1989);

S.C.Code Ann. §§ 38-1-20(7), (19) (1989);

S.D.Codified Laws Ann. § 58-6-20 (1990);

Tenn.Code Ann. § 56-2-201(4) (1986);

Tex.Ins.Code Ann. art. 3.01, § 1 (1981);

Utah Code Ann. § 31A-1-301(44)(d) (1991);

Vt.Stat.Ann. tit. 8, § 3717 (1984);

Va.Code Ann. § 38.2-602 (1986);

Wash.Rev.Code § 48.11.020 (1984);

W.Va.Code § 33-1-10(a) (1988);

Wis.Stat. §§ 71.42(3), 610.21(4) (1980);

Wyo.Stat. § 26-1-102(a)(xvi), (xvii), 26-16-101 (1983). Annuity Life Ins. Co., 359 U.S. 6 5, 69, 79 S.Ct. 618, 621, 3

L.Ed.2d 640 (1959) ("all the States regulate "annui ties' undertheir "insurance' laws"). For example, Texas law defines a "life

insurance company" to be a "c orporation doing business under any

charter involving

... [ inter alia ] annuities." Tex.Ins.Code, art.

3.01 § 1 (1981). Federal laws also reflect the fact that annuities

are an insurance product. S ee e.g. Internal Revenue Code, 26

U.S.C. § 816(a) (a "life insurance company" is defined as "an

insurance company which is engaged in the business of issuing life

insurance and annuity contracts").

Annuities have historically been considered insurance products

because functionally they are the mirror image of life insurance.

In a life insurance contract, in return for periodic payments by

the i nsured, the insurance company promises to pay a lump sum to

the insured's beneficiary upon the death of the insured. The

insurance company determines the insurance premium by calculating

the life expectancy of the insured, and gambles that the insured

will outlive the actuarial prediction. An annuity contract is the

exact inverse of a life insurance contract. In return for a lump

sum, the insurance company typic ally promises the annuitant

periodic payments that will continue until the death of the

annuitant. The lump sum is determined by the life expectancy of

the annuitant, and, in this case, the insurance co mpany gambles

that the annuitant will die prior to the actuarial predictions.

Both life insurance and annuities are formulated on the basis

of actuarial calculations of mortality risk. The Supreme Court, in

Group Lif e & Health Ins. Co. v. Royal Drug Co., recognized that

"[i]nsurance is an arrangement for transferring and distribut ing

risk." 440 U.S. 205, 211, 99 S.Ct. 1067, 1073, 59 L.Ed.2d 2613 S.S. Huebner and K. Black, Life Insurance, explain that

life insurance and annuities "are both insurance in the true

sense of the term. Life insurance protects against the absence

of income in the event of premature death or disability, whereas

the annuity protects (insures) against the absence of income on

the part of those "afflicted' with undue longevity. Both mean

dependable protection to two unfortunate groups, the one dying to

soon and the other living too long. They are both insurance

arrangements, the one pertaining to the years of ascendancy, and

the other to the years of decline."

4 This analysis applies to both variable and fixed annuities.

The Comptroller explains that "[b]oth fixed and variable

annuities can provide investors with a stream of payments for

life, and both can involve actuarial calculations. The only

difference is that fixed annuities, by providing a guaranteed

long-term return, offer a "reduced level of investment risk for

the customer.' " (1979) (quoting R. Keeton, Insurance Law § 1.2(a) (1971)). Both

life insurance and annuities transfer the economic risk of death

from the polic yholder to the insurance company. Life insurance

protects the insured against the economic risk of t he insured's

dying prematurely, while an annuity contract protects the insured

against the possibility of outliving her reso urces. 3 By issuing

numerous life insurance and annuity contracts, an insurance company

spreads th e risk of policyholders living longer or shorter than

predicted. 4

Because annuities are insurance products, and § 92 prohibits

national banks from selling insurance products in towns with a

population greater than 5,000, the Comptroller's approval of NCNB's

sale of annuities conflicts with § 92. The Comptroller attempts to

circumvent th is result by arguing that even if annuities are

insurance products, "they are not the kind of "fire, life or other

insurance' to which section 92 refers and which Saxon addressed."

The Comptroller attempts to distinguish Saxon by arguing that § 92does not apply to "specialized' insurance products like annuities,

but only "to types of insurance that are similar to fire and life

insurance, such as other general casualty insurance policies." The

district court agreed with the Comptroller's finding that annuity

contracts are "a speciali zed insurance product and not a "broad

form' of insurance to which Saxon applied."

The Comptrolle r's argument, that § 92 only applies to

"general" types of insurance, was rejected by the Second Circuit in

American Land Title. The Second Circuit opined: "We believe [the

l anguage of § 92] makes inescapable the conclusion that Congr ess

intended this provision to apply to " any

... insurance company.' "

968 F.2d at 156. (emphasis added) We agree with the Second

Circuit. The language of § 92 addresses the powers of banks to act

as the agents of "any fire, life or other insurance company."

Nowhere does § 92 limit "other insurance" to "general" insurance,

nor does § 92 speak of "broad forms" of insurance. Nothing in § 92

requires that we engage in the necessarily arbitrary exer cise of

examining whether a particular type of insurance product conforms

t o a platonic form of "general" insurance. Moreover, on its own

facts, Saxon applied to "automobile, home, casualty and liability

insurance." 399 F.2d at 1012. Likewise, the recent Second Circuit

case following Saxon struck down the sale of titl e insurance.

Annuities are certainly no less a "general" type of insurance than

land title insurance or automobile insurance.

The Comptroller also attempts to analogize annuities to credit

life insurance which, according to the D.C. Circuit, national banks

are permitted to sell. I ndependent Bankers Association v. Heimann,613 F.2d 1164 (D.C.Cir.1979). The analogy has no merit. Credit

life insurance secures the repa y ment of the borrower's

indebtedness, and thus is intimately related to the bank's primary

business of lending. As the Second Circuit court explains,

credit life insurance is unique in that it protects only the

lender's intere st by insuring that his loan will be repaid

even if the borrower dies. When a bank sells credit life

insurance it is similar to the bank demanding a higher price

for the loan to compensate for its assumption of a risk

inherent in any extension of credit made pursuant to a borrower's promise to pay—the risk that the borrower's death

will render him personall y incapable of repaying the loan.

American Land Title, 968 F.2d at 157.

By contrast to credit life insurance, which is closely related to

the business of banking, annuities have nothing to do with the

primary business of banking.

The Comptroller and NCNB finally argue that regardless of §

92, § 24(7) of the National Bank Act autho rizes banks to sell

annuities. Section 24(7), originally enacted as part of the

National Bank Act of 1864, ch. 106, 13 Stat. 99, 101, codified at

12 U.S.C. § 24(7), grants to national banks "all such incidental

powers as shall be necessary to carry on the business of banking."

T he Comptroller argues that the selling of annuities is an

"incidental power" granted to national banks under § 24(7). The

comptroller's argument ignores the rest of the quo ted sentence,

i.e., "necessary to carry on the business of banking." Even

conceding arguendo that the power to sell annuities would be one

incidental to banking, by no stretch of the imagination can that

power be deemed "necessary." Moreover, the Comptroller's argument,

claiming that Congress implicitly gave national banks the power to

sell annuities under the general provision of § 24(7), ignores theimp ort of § 92. Even if § 24(7) can be interpreted as granting

national banks the power to sell annuities, it is a basic principle

o f statutory construction that "where two statutes conflict, the

statute that addresses the matter under consideration in specific

terms controls over the one that does so in a general manner."

American Land Title Association, 968 F.2d at 157. As we explained

in Saxon:

In interpreting the meaning of one provision of an act it is

proper that all other provisions in pari materia should also

be considered. So in construing the general authority

contained in Section 24(7) we must give equal consideration to

Section 92 as it specifically deals with the power of national

banks to act as insurance agents. 399 F.2d at 1013.

See Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 445,

107 S.Ct. 2494, 249 9, 96 L.Ed.2d 385 (1987) ("where there is no

clear intention otherwise, a specific statute will not be

controlled or nullified by a general one"); B usic v. United

Stat es, 446 U.S. 398, 406, 100 S.Ct. 1747, 1753, 64 L.Ed.2d 381

(1980) ("a more specific statute will be given precedence over a

more general one, regardless of their temporal sequence").

We have previously considered and rejected the Comptroller's

argument that § 24(7) grants national banks powers that are denied

by § 92. In S axon we held that "when the general language in

Section 24(7) dea ling with "incidental' powers is construed in

conjunction with the specific grant in section 92," id. at 1013,

section 92 controls. A "power which has been withheld or denied by

Congress cannot be found to exist as an "incidental' and

"necessary' power." I d. at 1014. The same conclusion was reached

by the Second Circuit, which found that the "specific limits on

insurance activity contained in section 92" control "the generalgrant of power contained in section 24 (seventh)." American Land

Title, 968 F.2d at 157.

In addition to the statutory construction outlined above, the

legislative history of § 92 clearly indicates that § 24(7) did not

grant banks the power to sell insurance products. Section 24(7)

was enacted in 1864, as part of the original National Bank Act.

"Prior to the 191 6 enactment of Section 92 it seems to have been

universally understood that no national banks possessed any power

to act as insurance agents." Saxon, 399 F.2d at 1013. In a 1915

ruling, the Federal Reserve Board stated that "National banks have

no express or implied power to write fire, cyclone, liability, or

other kinds of insurance." 2 Fed. Reserve Bull. 73, 74 (1916). In

1916, the then Comptroller of the Currenc y John Skelton Williams

ruled that "National banks are not given either expressly nor by

necessary implication the power to act as agents for insurance

companies." 53 Cong.Rec. 11001 (1916). It was precisely the

national banks' lack of power to sell insurance under § 24(7) which

prompted Comptroller Williams to recomm end that Congress grant

national banks located in towns with a population not exceeding

5,000 people the power to act as insu rance agents. The Congress

adopted the recommendation of Comptroller Williams, and enacted §

92 as part of the National Bank A ct of 1916. Reviewing this

history, we concluded in Saxon:

It thus appears to be clear from the contemporaneous

legisl ative history of Section 92 that Congress agreed with

and acquiesced in the then Comptroller's ruling that "National

banks are not given either expressly nor by necessary

implication the power to act as agents for insurance

companies.' 399 F.2d at 1016.

If § 24(7) had authorized banks to sel l insurance products,Congress would not have needed to add § 92 which grants national

banks the limited power to sell insurance in towns with less than

5,000 inhabitants. If § 24(7) authorized banks to sell insurance

products, the limited grant of such a power under § 92 would be

partially redundant (for cities with a population under 5,000), and

partially contradictory (for cities with a population over 5,000).

Obviously, § 92 reflects Congress' understanding that the general

grant of "incidental" power under § 24(7) did not include the power

to sell insurance.

CONCLUSION

Our interpretation of § 92 and § 24(7) largely follows our

interpretation of these provisions in Saxon. In the 25 years that

have past since this court interpreted § 92 and § 24(7) in Saxon,

Congress has taken no step to overrule or modify this

interpretation. We end our opinion by giving banks seeking more

power than they are currently granted under §§ 92 and 24(7) the

same advice given by Judge Homer Thornberry at the conclusion of

his concurring opinion in Saxon: "banks should look to Congress,

not the Comptroller." 399 F.2d 1021. To Judge Thornberry's

admonition we simply add, "... or the courts." We thus REVERSE the

finding of the district court and hold that the March 21, 1990

decision of the Comptroller permitting NCNB t o sell annuities in

towns with more than 5,000 inhabitants is in violation of 12 U.S.C.

§ 92.