Supreme Court Rules on Banking Law

NATIONAL banks in midsized and large cities may sell annuities, the Supreme Court ruled unanimously yesterday.

The justices reversed a lower-court decision that had called annuities a form of insurance, which could not be sold by banks in cities of more than 5,000 residents. The decision agreed with the government's and nationally chartered banks' interpretation of a murky federal law.

The lower court ruling had been appealed by a brokerage subsidiary of NationsBank and by the federal comptroller of the currency.

``We respect as reasonable the comptroller's conclusion that brokerage of annuities is an `incidental power necessary to carry on the business of banking,' '' Justice Ruth Bader Ginsburg wrote.

Banks sold about $12 billion worth of annuities in 1992, representing one-fifth of all annuities sold nationwide.

NationsBanc Securities - the brokerage subsidiary of NationsBank of North Carolina, based in Charlotte - got approval from the federal government in 1990 to sell annuities to its customers.

You've read  of  free articles. Subscribe to continue.
QR Code to Supreme Court Rules on Banking Law
Read this article in
QR Code to Subscription page
Start your subscription today