The Comptroller's Office has urged a federal judge in Connecticut to rule that Fleet Financial Group can sell insurance statewide provided it locates its agency within a small town.
Arguing in a friend-of-the-court brief, the Office of the Comptroller of the Currency said two federal appeals courts have already decided that section 92 of the National Bank Act does not impose any geographic restrictions on bank insurance sales.
The case pits Fleet against Connecticut's attorney general and the state's powerful insurance industry lobby. Insurance industry lawyers have repeatedly argued that the National Bank Act only permits banks to sell insurance to residents of the small town where it operates.
The OCC said in its Aug. 14 brief that this argument doesn't hold water.
First, the agency said, Congress did not include a specific geographic restriction in the law.
Second, it said, lawmakers authorized the OCC to decide where banks can sell policies.
Finally, the agency said, a 1916 letter from the comptroller to Congress indicates that the purpose for the new law was to expand bank business opportunities. That doesn't make sense if banks can't sell insurance to people who live outside of its hometown, the agency argued.