Court Opinion

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Opinions of the United
1994 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

11-9-1994

Seklua v. FDIC, Inc.
Precedential or Non-Precedential:

Docket 93-3596

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              UNITED STATES COURT OF APPEALS
                  FOR THE THIRD CIRCUIT

                       ___________

                       No. 93-3596
                       ___________

          RAYMOND SEKULA and L. KATHLEEN SEKULA

                            v.

          FEDERAL DEPOSIT INSURANCE CORPORATION;
               RESOLUTION TRUST CORPORATION

                                 Raymond F. Sekula and
                                 L. Kathleen Sekula,
                                                Appellants

   _______________________________________________

   On Appeal from the United States District Court
      for the Western District of Pennsylvania
         (D.C. Civil Action No. 93-cv-00073)
                 ___________________

                   Argued June 1, 1994

Before:    SCIRICA, NYGAARD and ALDISERT, Circuit Judges

                 (Filed November 9, 1994)

                     S. MICHAEL STREIB, ESQUIRE (Argued)
                     Grant Building, Suite 230
                     Pittsburgh, Pennsylvania 15219

                        Attorney for Appellants

                     Z. SCOTT BIRDWELL, ESQUIRE (Argued)
                     Federal Deposit Insurance Corporation
                     550 17th Street, N.W.
                     Washington, D.C. 20429

                        Attorney for Appellee,
                        Federal Deposit Insurance Corporation
                           PATRICIA A. TRUJILLO, ESQUIRE
                           Saul, Ewing, Remick & Saul
                           3800 Centre Square West
                           Philadelphia, Pennsylvania 19102

                           MITCHELL PLAVE, ESQUIRE
                           Resolution Trust Corporation
                           550 17th Street, N.W.
                           Washington, D.C. 20429

                              Attorneys for Appellee,
                              Resolution Trust Corporation

                          __________________

                       OPINION OF THE COURT
                        __________________

SCIRICA, Circuit Judge.

           This is a dispute over the interpretation of a

regulation governing the amount of insurance coverage provided

for federally insured joint accounts in a failed savings and loan

association.   At issue is whether the funds in joint accounts are

insured as a single unit or as multiple units and, specifically,

whether the two holders of several joint accounts are insured for

up to $100,000 or for up to $200,000.    Plaintiffs, Raymond and

Kathleen Sekula, contend the regulation provides that each of

them is insured for up to $100,000 for funds held in their joint

accounts and that together they are insured for up to $200,000.

Defendants, the Federal Deposit Insurance Corporation ("FDIC")

and the Resolution Trust Corporation ("RTC"), maintain the

regulation limits the insurance to an aggregated $100,000

maximum.   The district court agreed with the FDIC/RTC (hereafter
RTC), and granted summary judgment to the agency.1   The Sekulas

appealed.   We will affirm the district court.
                                I.

1
 . The district court granted summary judgment to the RTC,
holding that five of the Sekulas' six accounts should be
aggregated and insured to a total of $100,000. The court denied
summary judgment with respect to the sixth account, a certificate
of deposit, directing the appellees to hold a hearing as to the
ownership of that account. Disposition of that dispute is not
relevant to our interpretation of the regulation.
          On November 15, 1991, the Office of Thrift Supervision

declared Atlantic Financial Savings, F.A. insolvent and appointed

the RTC as receiver.    The RTC has the responsibility for

resolving the financial affairs of failed savings and loan

institutions.   12 U.S.C. § 1441a(b)(3) (Supp. V 1993).    In

carrying out its duties, the RTC has the same powers the FDIC has

under the Federal Deposit Insurance Act ("the Act"), 12 U.S.C. §

1821 (Supp. V 1993).2   It can approve or reject claims for

insured deposits and determine the amount of insurance to which

depositors are entitled under the Act.   Under that authority, the

RTC identified the eligible insured accounts at Atlantic

Financial on the date it failed and paid insurance on what it

calculated to be the insured portion of the accounts.

          The Sekulas held six accounts at Atlantic Financial

when the institution was declared insolvent.   Each contained a

signature card designated in the name of "Raymond F. Sekula or L.

2
 . Congress enacted the Financial Institutions Reform and
Recovery Enforcement Act of 1989, Pub. L. No. 101-73, 103 Stat.
183 (1989) (codified at various locations in 12 U.S.C.) as a
response to the crisis in the savings and loan industry that drew
so much public attention in recent years. It was designed to
improve the existing regulatory scheme and one of its purposes
was to establish a new corporation, the RTC, to contain, manage,
and resolve failed savings associations. The RTC in large part
took over the former role of the FDIC which, in turn, took on new
duties, including the functions of the Federal Savings and Loan
Deposit Insurance Corporation, which was ended. See Rosa v.
Resolution Trust Corp., 938 F.2d 383, 388 (3d Cir.), cert.
denied, 112 S. Ct. 582 (1991); 1 Gregory Pulles et al., Firrea,
Introduction (Supp. 1993). At oral argument, counsel for
appellees stated that the RTC and the FDIC spoke with one voice
on the issues in this case.
Kathleen Sekula" or "L. Kathleen Sekula or Raymond F. Sekula."

No other persons had ownership interests in the accounts.    The

total amount in the six accounts was $169,717.52, distributed as

follows:

           Number                        Balance

           00000132006597                $ 2,015.48
           00000357968841                 32,691.51
           00000354131716                 12,147.83
           00000357236116                 15,174.67
           00000357658160                 50,105.82
           90000356560995                 57,582.21
           Total                         169,717.52

The RTC maintained that only $100,000 of the total $169,717.52

was insured, and that Raymond and Kathleen were therefore

entitled to $100,000 in the aggregate, which it paid them.    The

Sekulas contended the entire amount was insured because they each

were entitled to receive up to $100,000 for their loss from the

insured accounts -- up to an aggregate of $200,000.3

                               II.

           On the date Atlantic Financial was declared insolvent,
the relevant statute on aggregating deposits provided:

3
 . The RTC initially treated all six accounts as joint accounts,
although the Sekulas claimed two of the accounts were actually
single ownership accounts, one belonging to Raymond Sekula and
one to Kathleen Sekula. They contended those two accounts should
have been insured separately for up to $100,000 each. The matter
was unresolved at the time of appeal, but a hearing had been
scheduled. At oral argument, counsel for the Sekulas informed
the court that the amount in dispute in this appeal had been
reduced to $13,000 as a result of the hearing. We shall proceed,
however, as if all the accounts were joint accounts; the amount
in dispute does not affect our interpretation of the regulation.
          [I]n 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).4   Congress gave the FDIC the power

to promulgate regulations governing the determination of net

amounts due to depositors for deposits in insured depository

institutions:
          For the purpose of clarifying and defining
          the insurance coverage under this subsection
          and subsection (i) of section 1817 . . . the
          [FDIC] is authorized to define, with such
          classifications and exceptions as it may
          prescribe, terms used in those subsections .
          . . and the extent of insurance coverage
          resulting therefrom.

12 U.S.C. § 1813(m)(1) (1988).    Accordingly, Congress delegated

authority to the FDIC (and its successor the RTC) to define the

Act in promulgating the regulations and to apply them. The RTC's

determination of the Sekulas' deposit insurance coverage is

4
 . The current version of the Federal Deposit Insurance Act
provides:

               For the purpose of determining the net
          amount due to any depositor under [12 U.S.C.
          § 1821(a)(1)(B)], the Corporation shall
          aggregate the amounts of all deposits in the
          insured depository institution which are
          maintained by a depositor in the same
          capacity and the same right for the benefit
          of the depositor . . . .

12 U.S.C. § 1821(a)(1)(C) (Supp. V 1993).
governed by those regulations promulgated by the FDIC pursuant to

12 U.S.C. § 1813(m)(1) (1988)5 and set forth in 12 C.F.R. Part

330.

            The regulation in question, 12 C.F.R. § 330.7(b)

(1991), directs how insurance is to be calculated for joint

accounts.    It provides:
            (b) Determination of insurance coverage. All
            qualifying joint accounts owned by the same
            combination of individuals shall first be
            added together and insured up to $100,000 in
            the aggregate. The interests of each co-
            owner in all qualifying joint accounts,
            whether owned by the same or different
            combinations of persons, shall then be added
            together and the total shall be insured up to
            $100,000.

12 C.F.R. § 330.7(b) (1991).6   The RTC interpreted this

regulation to limit the Sekulas' insured aggregate to $100,000.

5
 . The Sekulas suggest that because this statute has been
changed, the RTC's interpretation is entitled to no deference,
but they do not say why and cite no authority. As the district
court noted, the 1991 FDIC Improvement Act substantially
reenacted the statutory scheme regarding the aggregation of a
depositor's accounts for determining the net amount of insurance
due each depositor. 12 U.S.C. § 1821(a)(1) (as amended 1991).
We see no substantial change in the relevant statutory
provisions.
6
 . Subsection (a) of 12 C.F.R. § 330.7 describes the insurance
coverage for qualifying joint accounts separately from that for
individually held accounts. Subsection (c) discusses how
accounts qualify, and (d) describes how joint accounts are
treated if they do not qualify. Finally, subsection (e) deems
the interests of co-owners of joint accounts to be equal unless
otherwise stated in the insured depository institution's deposit
account records.
    The wording of the current edition of 12 C.F.R. § 330.7 is
identical to that of the 1991 edition.
           The Sekulas raise two principal issues on appeal.

First, they contend the proper interpretation of the language of

the regulation provides each of them up to $100,000 insurance

coverage on their jointly held accounts -- and, consequently,

that the entire amount on deposit in their joint accounts was

insured.   Second, they claim the RTC's interpretation of the

regulation constitutes substantive rule-making and is invalid

because it was not promulgated in accordance with the

Administrative Procedures Act, 5 U.S.C. § 553(b) and (c) (1988).

They also claim that promulgation of an alleged substantive

change affecting their rights without affording them notice and

an opportunity for comment as required by the APA denied them due

process of law.

           Neither in their notice of appeal nor in their brief

have the Sekulas explicitly contested the RTC's interpretation of

the statute requiring aggregation of deposits.     What the Sekulas

have expressly challenged is the fidelity of the RTC's method of

calculation to the language of its regulation.     Nevertheless, it

is apparent from the thrust of their argument that they also

implicitly challenge the RTC's implementation of its statutory

directive.

                                 III.

           A.     Review of Agency's Regulation.

           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

           B.     Interpretation of the Regulation.

11
 . The Sekulas have not addressed the problems raised by the
inconsistency of their reading with the statute's mandate to
aggregate.
            Generally, we defer to an agency's consistent

interpretation of its own regulation unless it is "plainly

erroneous or inconsistent with the regulation."        Bowles v.

Seminole Rock and Sand Co., 325 U.S. 410, 414 (1945).

Nevertheless, "this deference does not permit us to defer to an

`interpretation' . . . that strains `the plain and natural

meaning of words . . . ."    Director, Office of Workers'

Compensation Programs v. Mangifest, 826 F.2d 1318, 1324 (3d Cir.

1987), and is "tempered by our duty to independently insure that

the agency's interpretation comports with the language it has

adopted."   Director, Office of Workers' Compensation Programs v.

Gardner, 882 F.2d 67, 70 (3d Cir. 1989).

            The difficulty here is that the legislative regulation

is ambiguous.     If the regulation were clear and comported with

the statutory directive, then, as a legislative rule, it would be

entitled to deference.     Chevron, 467 U.S. at 844.    Because the

regulation is unclear, however, we will look to the agency's

interpretation of its regulation and ascertain whether it is

compatible with the intent of Congress.     We also will examine the

regulation in view of the accepted standards of statutory

construction.12    In reviewing an agency's interpretation of its

12
 . See Chevron, 467 U.S. at 843 n.9 ("If a court, employing
traditional tools of statutory construction, ascertains that
Congress had an intention on the precise question at issue, that
intention is the law and must be given effect.")
ambiguously worded regulation, we grant less deference than

otherwise.13

                                1.

          In making its determination, the RTC applied its

regulation as follows:   implementing the first sentence, it added

all the Sekulas' qualifying joint accounts and determined that

the total was $169,717.52, of which only $100,000 was insured;

there was no need to apply the second sentence because the funds

here were held by the same combination of persons as in step one

and neither co-owner had ownership interests in joint accounts

involving third parties.   There was no possibility that either of

the Sekulas would exceed the statutory maximum in the joint

account category.

          By contrast, the Sekulas contend the proper application

of the regulation is that, first, their joint accounts are

totaled and insured in the amount of $100,000.   Then, the

interests each of them has in all joint qualifying accounts he or

13
 . We noted in International Raw Materials v. Stauffer Chemical
Co., 978 F.2d 1318, 1325 n.9 (3d Cir. 1992), cert. denied, 113
S.Ct. 1588 (1993), that we had not decided whether Chevron, 467
U.S. at 843-44, which counselled judicial deference to an
agency's legislative rules, overruled General Elec. Co. v.
Gilbert, 429 U.S. 125, 141-42 (1976), which held that an agency's
interpretive decisions demanded less judicial deference. The
distinction relates to agency interpretations which are not made
in the context of legislative rule-making. See Cass R. Sunstein,
Law and Administration after Chevron, 90 Colum. L. Rev. 2071,
2093-94 (1990). Because the agency here made an interpretation
in the context of legislative rule-making, we need not decide
whether the Gilbert standard survives. Cf. Reich v. Local 30,
Int'l Bhd. of Teamsters, 6 F.3d 978 (3d Cir. 1993).
she holds are totaled and each person's cumulative interests also

are insured in the amount of $100,000.     The Sekulas claim this

calculation recognizes that each of them has a half interest of

$84,858.76 in their joint accounts (or a total of $167,717.52)

and all of that amount is covered.     The problem with this

approach, however, is that it requires elision of part of the

regulation and ignores the plain intent of the statutory

directive.

                                  2.

             The Sekulas claim to rely on the plain meaning rule in

order to harvest the maximum coverage from the regulation.14    To

reach their desired result they claim to give plain meaning to

every word of the regulation's second sentence, which states,

"the interests of each co-owner in all qualifying joint accounts,

whether owned by the same or different combinations of persons,"

shall be added and insured up to $100,000.15    The Sekulas

14
 . The plain meaning rule is the basic principle of statutory
construction. "[T]he meaning of a statute must, in the first
instance, be sought in the language in which the act is framed,
and if that is plain, . . . the sole function of the courts is to
enforce it according to its terms." Caminetti v. United States,
242 U.S. 470, 485 (1917). While the rule is one of statutory
construction, it also has been applied to agency regulations.
See, e.g., Director, Office of Workers' Compensation Programs v.
Mangifest, 826 F.2d 1318, 1324 (3d Cir. 1987); Bethlehem Steel
Corp. v. Occupational Safety and Health Review Comm'n, 573 F.2d
157, 161 (3d Cir. 1978).

15
 . The interests to be totaled in this step are not explicitly
identified as insured or uninsured interests, and the Sekulas
contend that the word "interests" must therefore be taken to mean
all the interests, without qualification, that each of them has
particularly focus on the word "same" in this sentence.

According to their reading, the word "same" compels the

conclusion that the individual's interest in all joint accounts

is insured for $100,000 and that the RTC's interpretation ignores

this word.   In contrast to their rigorous reading of the second

sentence, however, the Sekulas ignore the first sentence of the

regulation, which requires that "all joint deposit accounts owned

by the same combination of individuals" shall be aggregated and

insured only up to the statutory limit.

          Another fundamental rule of construction is that effect

must be given to every part of a statute or regulation, so that

no part will be meaningless.   One must look at the entire

provision, rather than seize on one part in isolation.16
(..continued)
in all qualifying joint accounts. The RTC contends that we must
limit the interests included in the second step's calculation to
those interests that would qualify for insurance under the first
step. Although we believe that, in the context of the statute
and of other parts of the regulations, step two does presume that
the term "interests" means "insured interests," we need not rely
on that factor because we agree with the RTC's interpretation on
other grounds.
16
 . "Words . . . have only a communal existence; . . . the
meaning of each interpenetrate[s] the other, . . ." National
Labor Relations Bd. v. Federbush Co., 121 F.2d 954, 957 (2d Cir.
1941); see also King v. St. Vincent's Hosp., 112 S. Ct. 570, 574
(1991) ("the meaning of statutory language, plain or not, depends
on context"); Pennsylvania Dep't of Public Welfare v. United
States Dep't of Health and Human Services, 928 F.2d 1378, 1385
(3d Cir. 1991) (courts should avoid a construction that renders
any provision superfluous) (citing United States v. Menasche, 348
U.S. 528, 538-39 (1955)). When possible, every word should be
given effect "so that no part will be inoperative or superfluous,
void or insignificant." Pennsylvania Dep't of Public Welfare,
928 F.2d at 1385 (quoting Norman J. Singer, 2A Sutherland
Statutory Construction, § 46.06 (5th Ed. 1992)).
Our task is to give effect to all parts of the regulation,

without trampling on the plain meaning of the words.     Under the

Sekulas' interpretation, the first sentence of the regulation

would serve no purpose and the determination under that sentence

that all joint accounts owned by them are aggregated and insured

up to $100,000 would be inconsequential.   According to the

Sekulas, the second sentence requires the RTC to insure each of

them for $100,000 for their individual interests in their joint

accounts.   By that reading, either the second sentence supplants

insurance coverage calculated under the first sentence or it

gives holders of joint accounts multiple insurance coverage on

those accounts.   Neither alternative is reasonable.    The first

alternative would collapse into one step what is clearly meant to

be a two-step process under the regulation.     The second

alternative would violate the clear intent of the regulatory

scheme:   to limit the insurable interests of holders of joint

accounts.   We cannot find a way to give meaning to the first step

of the regulation other than by limiting the application of step

two to individuals who hold joint accounts with different

combinations of persons.

            In fact, the word "same," in the second sentence, was

only inserted in the 1991 edition of the regulation.     The second

sentence of the prior regulation referred only to accounts owned

by "different combinations of individuals."17    The RTC points out

17
 . The pre-1991 regulation, 12 C.F.R. § 330.9, which first
appeared in the 1988 C.F.R., used two sub-sections to describe
the word was inserted merely to state the existing rule more

clearly -- that a person's insured interests in joint accounts

owned with the "same" combination of persons as in step one are,

in step two, aggregated with the insured interests in any joint

accounts he or she holds with different combinations of persons.

The individual's insurable interest in this aggregate is likewise

limited by the statutory cap.   Thus, no individual may receive

more than $100,000 of insurance coverage in the joint account

category.     Although we recognize the ambiguity the word "same"

creates, we believe that the addition was a technical change that

clarified the existing rule, but did not change insurance

coverage.18   We are convinced that rather than change the meaning

(..continued)
the two-step process that is described in one sub-section in the
later version of the regulation. Subsections (d) and (e) state:

                 (d) Same combination of individuals.
            All joint deposit accounts owned by the same
            combination of individuals shall first be
            added together and insured up to $100,000 in
            the aggregate.

                 (e) Interest of each coowner. The
            interest of each coowner in all joint deposit
            accounts owned by different combinations of
            individuals shall then be added together and
            insured up to $100,000 in the aggregate.

12 C.F.R. § 330.9(d) and (e) (1990).
18
 . The RTC's interpretation was promulgated under the prior
version.   Thus, the Sekulas argue that the interpretation is now
invalid. Because we do not believe that the addition of the word
"same" changed the meaning of the regulation, we do not find that
it compromises the RTC's interpretation.
of the regulation, the addition of the word "same" was meant to

cause the wording of the regulation to reflect more clearly the

RTC's longstanding interpretation of the way the insurance on

joint accounts is to be calculated.

                                3.

           The FDIC and RTC have consistently applied the joint

account regulation in the manner they describe.   Since

promulgation of the regulatory scheme, the RTC and its

predecessors have interpreted the regulations to require the

aggregate of all accounts held jointly by the same two persons to

be insured to the same extent as the aggregate of all accounts

held by a single person.   See Mahoney v. Federal Sav. and Loan

Ins. Corp., 393 F.2d 156 (7th Cir.), cert. denied, 393 U.S. 837

(1968).   Indeed, all the published cases, advisory opinions, and

published examples are in accord with the RTC's interpretation

and demonstrate a consistent application of the joint account

regulation.

          Furthermore, this interpretation is consistent with the

general principle that joint accounts are considered to be owned

collectively and insured as a single unit.   This principle is

enunciated in the regulations, at 12 C.F.R. § 330.3(a) (1991):
          The insurance coverage provided by the Act
          and the regulations in this part is based
          upon the ownership rights and capacities in
          which deposit accounts are maintained at
          insured depository institutions. All
          deposits in an insured depository institution
          which are maintained in the same right and
          capacity (by or for the benefit of a
          particular depositor or depositors) shall be
          added together and insured in accordance with
          the regulations in this part. Deposits
          maintained in different rights and
          capacities, as recognized under this part,
          shall be insured separately from each other.

Indeed, since the inception of the deposit insurance program,

joint accounts have been considered to be owned collectively and

insured as a single unit.19   Other federal courts have recognized

and upheld the principle as axiomatic to the federal deposit

insurance scheme.   See, e.g., Kershaw v. Resolution Trust Corp.,

987 F.2d 1206, 1208-09 (5th Cir. 1993) (rejecting as unsupported

by 12 C.F.R. § 330.7 argument of husband and wife jointly holding

three CD's totalling more than $150,000 that regulation should be

construed to insure interests of each spouse up to $100,000);

Mahoney, 393 F.2d at 158 (joint accounts "constituted a single

'member' entity, so that the $10,000 maximum applied to the

aggregate of the three accounts.").

          We find it particularly significant that the agency's

interpretation of the regulation is contained in a question-and-

answer booklet they disseminated to financial institutions for

19
 . See, e.g., testimony of Judge L.E. Birdzell, General Counsel
for the FDIC, testifying before the House Banking and Currency
Committee in 1935: "as long as the account is in the name of the
husband and wife, no matter what the amount is, it is treated as
one deposit . . . ." Hearings on the Banking Act of 1935, H.R.
5357: A Bill to Provide for the Sound, Effective, and
Uninterrupted Operation of the Banking System, and for Other
Purposes, Before the Committee on Banking and Currency, House of
Representatives, 74th Cong., 1st Sess. 26-27 (1935). See also
Scott, supra.
distribution to the public.20   The passage quoted below dates

prior to the 1991 insertion of the word "same."   It was used by

the FDIC's predecessor, the Federal Savings and Loan Insurance

Corporation, to explain a prior regulation on joint accounts, 12

C.F.R. § 564.9(d) and (e) (1987); it was used to explain the 1988

version, quoted above; and it is used today to explain the

version that appeared in the 1991 edition of the C.F.R.   The RTC

claims the booklet passage has not changed because the prior

versions of the regulation are identical in meaning to the

present version.

          The passage paraphrases the steps for determining

deposit insurance for multiple joint accounts in answer to the

question "How are joint accounts insured?":
          1. First, all joint accounts that are
          identically owned (i.e. held by the same
          combination of individuals) are added
          together and the combined total is insurable
          up to the $100,000 maximum.

          2. After step one has been completed, joint
          accounts involving different combinations of
          individuals are reviewed to determine the
          amount of each person's insurable interest
          (or share) in all joint accounts. Each
          owner's insurable interest in all joint
          accounts is added together and the total is

20
 . The booklet, which has appeared under various titles,
including "Your Insured Deposit," answers the question "How are
joint accounts insured?" It states the two steps are applied so
that "(1) no one joint account can be insured for over $100,000,
(2) multiple joint accounts with identical ownership cannot be
insured for over $100,000 in the aggregate, and (3) no one
person's insured interest in the joint account category can
exceed $100,000." Federal Deposit Insurance Corporation, Your
Insured Deposit (1993) (emphasis added).
            insured up to the $100,000 maximum. Each
            person's interest in a joint account is
            deemed equal unless otherwise stated on the
            deposit account records.

Federal Deposit Insurance Corporation, Your Insured Deposit
(1993).    In the booklet's example,   A and B share joint accounts

with each other and separately have interests in joint accounts

held with other individuals.    Step one regards A and B as one

depositor, entitled to a maximum of $100,000 insurance on

deposits held in those joint accounts.    Then, in step two, A's

and B's individual interests in that insured amount are broken

out.   These interests -- which may total $50,000 apiece -- are

added to A's and B's insured interests in joint accounts held

with other people.    This step assures that for each individual

that aggregate of insured interests may not exceed the $100,000

maximum.

            As the district court found, these pamphlets were made

available to the public.    We agree that a person "proceeding in

good faith should not be subjected to a trap brought about by an

interpretation of a regulation hidden in the bosom of the

agency."    Gardner, 882 F.2d at 71 (quoting Mangifest, 826 F.2d at

1325).    But there is no "trap" when the agency's interpretation

of a regulation is public and long-standing.

                                 4.

            We have consistently recognized that:
            The responsibility to promulgate clear and
            unambiguous standards is upon the Secretary.
            The test is not what he might possibly have
            intended, but what he said. If the language
           is faulty, the Secretary has the means and
           the obligation to amend.

Bethlehem Steel v. Occupational Safety and Health Review Comm'n,
573 F.2d 157, 161 (3d Cir. 1978);     See also Mangifest, 826 F.2d

at 1324.   We agree the language of the regulation is ambiguous.

Nevertheless, it has posed no trap for the unwary.     The agency's

interpretation and application have been consistent with the

statute and the legislative purpose and joint account holders

have not been misled about the impact of the regulation on their

deposit insurance.   Accordingly, because the regulation's meaning

can be satisfactorily established by applying standard principles

of statutory construction and by referring to the agency's

interpretation, which is long-standing and consistent, we

conclude that the regulation limits insurance for joint account

deposits to a maximum of $100,000.21

                                IV.

           A.   Rule-Making Procedures.

           The Sekulas contend the agency's interpretation of 12
C.F.R. § 330.7(b) is itself a legislative or substantive rule and

therefore is invalid because it was not promulgated in accordance

with provisions of the APA requiring notice and an opportunity to

comment, 5 U.S.C. § 553 (1988).     But those procedures are
21
 . While the meaning of the regulation is satisfactorily
established by textual analysis and the agencies' long-standing
application and interpretation of it, we hope in the future the
RTC will be more careful in the language it adopts in its
regulations.
required only if a substantive change is proposed and do not

apply to "interpretative rules, general statements of policy, or

rules of agency organization, procedure, or practice."      5 U.S.C.

§ 553(b)(A) (1988).   Interpretive rules constitute a body of

experience and informed judgment to which courts and litigants

may properly resort for guidance.    Interpretive rules are not

intended to alter legal rights, but to state the agency's view of

what existing law requires.    Such rules "merely clarify or

explain existing law or regulations."    Southern California Edison

Co. v. Federal Energy Regulatory Comm'n, 770 F.2d 779, 783 (9th

Cir. 1985).     "If the rule in question merely clarifies or

explains existing law or regulations, it will be deemed

interpretive."   Bailey v. Sullivan, 885 F.2d 52, 62 (3d Cir.

1989).

          Section 330.7(b) was published by the FDIC pursuant to

the notice and comment procedure.    See 54 Fed. Reg. 52,399 (Dec.

21, 1989); 55 Fed. Reg. 20,111 (May 15, 1990).    The RTC contends

its interpretation of the regulation merely clarified and

explained it.    The Sekulas claim the regulation was so changed by

the RTC's interpretation that it amounted to a new rule and that

the RTC engaged in rule-making.     But we have found the

interpretation did not change the meaning of the regulation:

rather it merely explained and clarified it.     Furthermore, agency

manuals, guidelines, and memoranda are interpretive rules not

subject to the APA.   See Creighton Omaha Regional Health Care
Corp. v. Bowen, 822 F.2d 785, 791 (8th Cir. 1987).   The RTC's

predecessor's publication of pamphlets describing its procedures

for calculating insurance for joint accounts was clearly meant to

interpret and clarify the insurance regulations, which have been

applied consistently in accordance with the publications'

descriptions.   Because we find the RTC's interpretation of the

regulation was not substantive rule-making, this claim must fail

also.

          B.    Deprivation of Property Interest.

          The Sekulas' argument that they are being deprived of a

protected property interest without due process is without merit.

Congress gave the agency the authority to promulgate regulations

defining the scope of its insurance coverage.   12 U.S.C. §

1813(m)(1) (1988); Nimon v. Resolution Trust Corp., 975 F.2d 240,

245 (5th Cir. 1992).   The agency did so and provided notice to

depositors.

                                V.

          For the foregoing reasons, we will affirm the judgment

of the district court.