The FINITE STRING, Volume 14, Number 1 (continued)

Ph~l~p S, Nyborg, Director Wash~ngton Offlce d% Washington Report t * * * * * * * * * * C * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Amer~can Federabon of lnforrna on Processing Soaebes, Inc Su~te 420 2100 L Street, N W , Wash~ngton, D C 20037 202-296-0590 Vol. 11, No. 10 November, 1976 NASHINGTON DEVELOPMENTS SUPREME COURT DENIES CBCT PETSTIONS; COMPTROLLER CURRENCY TO ISSUE NEW CBCT &GULATIONS Consolidated petitions from two Chicago banks and t h e Comptroller of the Currency seeking review of Pedeyal Appeals Court rulings which equate customer-bank conlmunications terminals (CBCTs) with bank branches, and thus forbid CBCTs in nonbranching states, were denied by the Supreme Court last month ttwithout dissent or explanation ." Banks ' response. The petitioning banks, Gontinental Natiofial Brink and Trust Co. of Chicago and the First National Bank of Chicago, this month deactivated their combined total of seven CBCTs . The terminals' three uses permit deposits t o be made, funds t o be transferred, or funds t o be borrowed; each of the5e functions, various appea-1s courts have held, constitute branch bank- ing under the National Bank IMcFadden) Act. New CBCT regutatiom. The Currency Comptrollerts Attorney Edward Jiran told AFIPS P~ehington Report in October that the Comptroller w i l l issue new regu- lations for nat%onal bank CBCTs this month. Rules may be written t o liberalize minimum capitalization requirements for terminals shared by more than one financial institution, according t o the Comptroller s Electronic Banking Systems Division Chief Claude A. Raworth. Pawortb told AFIPS that the new regulations w i l l permit banks Itto use the [EFTS] technology without heavy capitalization requirements; [otherwise, 1. some thinly capitalized [banks] would have problems ." Thus, according to the Currency Comptroller official , the regulations would encourage sharing EFTS facilities with smaller banks. NCEFT'and ZegisZatim a c t i ~ t i e s . Prior t o the Supreme Court action denying the CBCT petitions, National Commission on Electronic Funds Transfer (NCEFJ') Executive Director John B. Benton told this writer i n Washington that the braaching issue should be resolved in the U.S. Congress, Benton added that "it's going t o be some time before 1egi.slation is passed i n CongressIt on whether CBCPs are branches. Last month, the NCEFT convened hqar~ngs osl both brahching and corlsumer issues. The Senate Subcommittee on Financial ~hsstitutions, chaired by Sen. Thomas d r McIntyre ID-N .H .) , w i 11 hold hearings on the branching question i n December. CBCT court action. Fedgral courts i n various jurisdictions have bean almost unanimous i n their interpretation of the McFad&n Act disallowing off-premises CBCTs. Last August, the U.S. Court of Appeals for the Tenth Circuit, ruling i n a Colorado case, upheld a lower district court judgment that receipt of deposits by CBCTs vialates the McFadden Act. …

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