The comptroller of the currency's nearly unfettered authority to let national banks enter new lines of business may be in jeopardy.

Federal courts have recently overturned agency decisions permitting banks to offer the Retirement CD and to sell crop insurance outside small towns.

"This certainly is not good news for the banking industry or the comptroller," said Richard Whiting, acting executive director of the Bankers Roundtable. "It puts limits on their ability to allow banks to expand their offerings and to adjust to the changing marketplace."

The recent rulings come despite a string of four impressive Supreme Court decisions in this decade upholding the comptroller's power to let national banks sell annuities and insurance.

In the Retirement CD case, a federal appeals court in Atlanta ruled April 5 that the Office of the Comptroller of the Currency had overstepped its authority in letting Blackfeet National Bank of Browning, Mont., underwrite the annuity-like product. It compared underwriting annuity-like products to underwriting securities, which the Glass-Steagall Act bars banks from doing.

The crop insurance decision, by Judge June L. Green of U.S. District Court for the District of Columbia, overturned an OCC ruling permitting banks to sell the product to farm loan customers statewide.

Instead, the judge said section 24 of the National Bank Act requires institutions selling crop insurance to have offices in towns with 5,000 or fewer residents.

"The combination of the crop insurance and Retirement CD cases could certainly be perceived as a change in momentum," said Kathleen W. Collins, Washington counsel for the Financial Institutions Insurance Association.

Gary Hughes, general counsel to the American Council of Life Insurance, said the Retirement CD case will make it difficult for the OCC to let banks underwrite annuities. The agency would have to rely on the same legal logic rejected in this case to authorize annuity underwriting in operating subsidiaries, he said.

"We have believed for some time that the easy cases for the OCC had been won and that as we went forward it would get harder and harder for the comptroller of the currency to make these decisions stick," Mr. Hughes said. "That seems to be what is happening."

Michael F. Crotty, deputy general counsel for litigation at the American Bankers Association, said the Retirement CD case is significant because the court went beyond the issue before it, which was whether Florida's insurance commissioner could regulate the annuity-like product. "If followed elsewhere, you have to wonder about how much deference the comptroller is going to be given now," Mr. Crotty said.

An OCC spokesman said industry lawyers should not overreact to these losses. The Retirement CD case involved a unique product, he said, and the crop insurance ruling was only a trial court decision that the agency will appeal. "No one should conclude that our ability to deal with insurance issues has been compromised by these two cases," the spokesman said.

Other lawyers cautioned against reading too much into either decision. "It is way too early to draw any conclusion from these two cases that the OCC is at the end of its string of legal victories," said Robert L. Clarke, a former comptroller who is now a partner in the Houston office of the Bracewell & Patterson law firm.

Robert Rusboldt, executive vice president of the Independent Insurance Agents of America, said the cases should not affect the debate over financial reform. Lawmakers still must limit the courts' deference to federal banking agencies.

"This does not change the political dynamic on Capitol Hill at all," he said. "These cases were decided on the merits rather than on deference. The merits of the law were clearly not on the side of the OCC."

Mr. Crotty predicted that the OCC would win at the Supreme Court if either case makes it that far. "I'm not concerned," he said. "In the end, we shall prevail."

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