Opinion ID: 3009538
Heading Depth: 2
Heading Rank: 1

Heading: Review of Agency's Regulation.

Text: When reviewing an agency's construction of a statute, if the intent of Congress is clear, then we must give effect to that intent. Chevron, U.S.A. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43 (1984). If the statute is silent or ambiguous with respect to a specific issue, then a deference standard applies, and the question for the court becomes whether the agency's answer is based on a reasonable construction of the statute. Chevron, 467 U.S. at 843. In determining whether an agency's regulation complies with its congressional mandate, we look to see whether the regulation harmonizes with the plain language of the statute, its origin, and its purpose. National Muffler Dealers Ass'n v. United States, 440 U.S. 472, 477 (1979). So long as the regulation bears a fair relationship to the language of the statute, reflects the views of those who sought its enactment, and matches the purpose they articulated, it will merit deference. National Muffler Dealers, 440 U.S. at 484. The statute, 12 U.S.C. § 1813(m)(1), does not explicitly provide that joint deposit account holders are to be treated and limited as a single depositor. Accordingly, we must examine whether the agency's regulation, and its interpretation, comport with the general congressional directive. Because congressional intent to aggregate jointly held deposits and limit insurance of that aggregate is apparent from the legislative history behind the enactment, the RTC's interpretation is based on a reasonable construction of the statute.7 7 . Although we believe the intent of Congress is clear, it also is true that Congress has not spoken to the precise question at 12 U.S.C. § 1813(m)(1) directs the RTC to aggregate deposits: `insured deposit' [or] net amount due to any depositor . . . shall be determined according to such regulations as the [RTC] may prescribe, and in determining the amount due to any depositor there shall be added together all deposits in the depository institution maintained in the same capacity and the same right for his benefit either in his own name or in the names of others . . . . 12 U.S.C. § 1813(m)(1) (1988). The legislative history behind the subsection reveals that the incorporation of section 1813(m)(1) into the statute was intended to prevent a single depositor from exceeding the statutory ceiling on insurance coverage through other means. The notion that holders of a joint account would be insured as a single entity was integral to the deposit insurance scheme from the beginning.8 By the mid-1960s, however, there were significant problems with the administration of the federal bank deposit insurance program. Depositors were becoming increasingly adept at evading the limits Congress had set on deposit insurance.9 Accordingly, Congress overhauled the (..continued) issue. Chevron, 467 U.S. at 843. We normally grant deference to the agency's regulation where Congress has left a gap for the agency to fill, by an express delegation of regulatory authority, Chevron 467 U.S. at 843-44. The problem here, however, as we shall see, is that the regulation itself is ambiguous. 8 . See K.E. Scott, Some Answers to Account Insurance Problems, 23 The Business Lawyer 493 (1968). 9 . In one infamous case, the FSLIC discovered four husband-wife couples who had established 50 different accounts, each held by a statute, directing the bank insurance agencies to develop regulations that: would enable the insuring agencies to bar the use of devices such as numerous joint accounts in various combinations . . . to obtain insurance far in excess of the limits established by Congress. 112 Cong. Rec. 26,472-73 (1966) (statement of Senator Robertson). See also 112 Cong. Rec. 25,007 (1966) (statement of Congressman Ashley) ([T]he purpose of my amendment [subsection 1813(m)(1)] is to clarify the power of the insuring agencies to prevent the circumvention of the insurance limit by the device of multiple accounts in the same institution.) The agency implemented its statutory directive by promulgating the regulatory scheme, establishing four categories of accounts: single deposit, testamentary, joint, and trust accounts. Within each of those categories, depositors' insurance coverage was capped at the statutory maximum. The regulations provide that in the joint account category any combination of individuals holding joint accounts is subject to the statutory limit and any individual participating in joint accounts with different combinations of individuals is likewise limited by the cap.10 (..continued) different combination of the eight people. Because eight people could generate 247 different combinations of joint accounts, it would have been possible for those four couples to insure over $3.7 million by use of joint accounts. Scott, supra, at 499. 10 . See Scott, supra, at 504-08. Unfortunately, the RTC's regulation is marred by a textual ambiguity. There is more than one plausible reading of the regulation -- one offered by the RTC and another by the Sekulas -- and neither is immediately evident from the words themselves. Only the RTC's reading, however, is consistent with the intent and purpose of the statute, as revealed by the text and the legislative history. The ambiguity arises because of the phrase the same or different combinations of persons, in the second sentence of subsection (b) of the regulation. See 12 C.F.R. § 330.7(b) (1991). According to the RTC, subsection (b) provides insurance up to the maximum of $100,000 for the aggregate of deposits of joint account holders. Thus, the second sentence of the subsection recognizes that to prevent an individual exceeding the statutory limit in the joint account category, his interests in joint accounts held with different combinations of individuals must be aggregated and the total must be capped at $100,000. The Sekulas, on the other hand, contend that the use of the word same in the second sentence explicitly provides insurance coverage for their individual interests in all joint accounts in which they participate.11