Opinion ID: 675131
Heading Depth: 2
Heading Rank: 2

Heading: Statutory Interpretation of Sec. 1818(q)

Text: 17 The statute provides that when the deposits of one insured depositing institution have been assumed by another, the separate insurance of deposits so assumed shall terminate at the end of the prescribed grace period. The statute focuses on the assumed deposits, and does not require that each depositor have a duplicate deposit in the assuming institution at the time of assumption in order to take advantage of the separate insurance coverage. 18 The RTC cites the legislative history of 12 U.S.C. Sec. 1728(a) in support of its position that Congress intended to provide separate insurance only in cases where deposits existed in both institutions prior to merger. This statute was the Federal Savings and Loan Insurance Corporation (FSLIC) counterpart to Sec. 1818(q) and was repealed when the FSLIC was abolished through the enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA). It contained language very similar to that in Sec. 1818(q). However, because we find that the language of Sec. 1818(q) clearly states the congressional intent, we need not resort to the legislative history of a repealed statute in order to resolve the issue at hand. 19 We find the RTC's argument untenable in light of our reading of the statute. We construe Sec. 1818(q) to mean exactly what it says: that any assumed time deposit shall be accorded separate deposit insurance during the statutory grace period. As used in Sec. 1818(q) the word separate means apart from and in addition to any other deposit insurance that may or may not exist at the time of assumption. The assumed time deposit, CD # 1, was issued before its assumption by New Spindletop and, upon assumption, it remained insured. The existence of this insurance did not depend on whether FAB had any other deposits at the time of assumption or that it may have made after the assumption. In this case, Sec. 1818(q) placed no restriction upon separate insurance coverage other than the statutory grace period. Insurance on CD # 1 was automatically maintained during the statutory grace period. According to the statute, FAB also had an additional $100,000 coverage for any new deposits. Consequently, both CD # 1 and CD # 2 were covered for up to $100,000 each. To hold otherwise would be to read into Sec. 1818(q) an exception or limitation that simply is not there. 20 We interpret Sec. 1818(q) to mean that CD # 1 was insured for up to $100,000 during the statutory grace period. This insurance coverage was separate and apart from and in addition to the $100,000 coverage that was applicable to CD # 2 because it was a new time deposit made at the assuming institution, New Spindletop, after its assumption of Old Spindletop's liabilities. 21 The RTC urges that we give Chevron deference to its decision. It argues that we are obligated to regard as controlling a reasonable, consistently applied interpretation construing the statute by the government. Nimon, supra, 975 F.2d at 245. Accordingly, we must note any relevant agency opinion of the statute at issue. The RTC offers five unpublished opinion letters of the now-abolished FSLIC in support of its position that the FSLIC has consistently interpreted the separate insurance provisions as applying only to deposits held by an individual at the time of merger. 2 Assuming, arguendo, that any authority of these five opinion letters survived the demise of the FSLIC, we conclude that they are not persuasive in view of their direct contradiction to the text of Sec. 1818(q). Chevron and its progeny do not require courts to defer to agency opinions which are incongruent with statutory text. 22 While we do not reach the issue of whether unpublished FSLIC opinion letters might constitute valid precedent in other cases, we decline to defer to them in this case because the FSLIC's interpretation of the applicable statutory language as espoused in the five opinion letters is so clearly contrary to the plain and unambiguous language of the statute. 23 In direct contrast to the FSLIC letters, the FDIC previously has concluded in a published opinion letter that deposits made in a new institution after the time of merger are covered by separate insurance. Thus, the FDIC has interpreted Sec. 1818(q) in the same way we do today. In FDIC Advisory Opinion 89-11, dated March 21, 1989, 3 nineteen failed banks in Texas were merged into a newly formed Bridge Bank (not unlike the situation with Old Spindletop and New Spindletop), and the FDIC specifically stated that all of the deposits assumed from the insolvent [banks] will be separately insured from any new deposits established by the same customer(s) with the Bridge Bank. 24 FAB argues that FDIC Advisory Opinion 89-11 should control this case. The RTC argues that we should defer to the FSLIC interpretations of the statutory language, citing FDIC Advisory Opinion 90-03 (dated January 9, 1990) for the proposition that FIRREA requires that FSLIC interpretations govern in this case rather than FDIC interpretations. While we are not required to resolve the issue of whether FSLIC or FDIC interpretations would govern in the event of a statutory ambiguity, we note that FDIC Advisory Opinion 89-11 is consistent with our interpretation of the statute. We hold that CD # 1 was afforded separate insurance coverage under the clear language of Sec. 1818(q) and that the RTC's determination to the contrary was arbitrary, capricious, an abuse of discretion, and not in accordance with law. For the foregoing reasons, the final determination of the RTC is REVERSED. 25 REVERSED.