WASHINGTON - A class action against a GE Capital subsidiary challenges the way the Federal Deposit Insurance Corp. defines a "state bank" and may jeopardize the ability of credit card banks to impose their rates and fees on customers outside their home states.

The plaintiffs, led by consumer Patricia Heaton, are arguing that Monogram Credit Card Bank of Georgia violated state usury law by exporting its interest rates and late fees to customers in Louisiana. The suit alleges the GE Capital unit, which holds a state charter in Georgia, does not fit the definition of a state bank laid out in the Federal Deposit Insurance Act and is therefore not entitled to export its rates and fees across state lines.

FDIC officials said they consider the lawsuit groundless.

FDIC General Counsel William Kroener took issue with a judge's finding that Monogram is not a state bank in a recent speech to the Federal Bar Association, saying, "If it stands, there are likely to be class-action suits against a lot of credit card banks."

The crux of the plaintiff's argument is the assertion that the FDIC made a mistake when it determined that Monogram, which services store credit cards for retailers, is a state bank and therefore eligible for deposit insurance.

According to the Federal Deposit Insurance Act, a "state bank" must be "engaged in the business of receiving deposits." Monogram receives deposits from only two sources, both of which are units of its parent company.

U.S. District Court Judge Carl J. Barbier found the plaintiffs' claim persuasive enough to remand the case in late November to a state court for a decision on the bank's status.

"Because case law appears silent on this precise point, the court relies upon a reading of the plain language of the statute and concludes that, although Monogram receives 'deposits' from its parent company, it is not engaged in the 'business of receiving deposits' from its customers. Accordingly, under the plain language of the statute, Monogram is not a 'state bank,' " the judge wrote.

According to an FDIC motion to intervene filed in U.S. District Court in New Orleans, the suit threatens the interests not only of Monogram but also of "hundreds of institutions."

"A decision adverse to Monogram may literally open the floodgates of litigation and deluge the institutions regulated by the FDIC with a torrent of similarly frivolous suits," the agency wrote.

In an interview, FDIC Deputy General Counsel Douglas Jones said the agency has examined the question of whether institutions with a small number of depositors can rightly be considered state banks under the law.

"The conclusion has always been that limited deposits, whether they are from affiliates or employees, have been sufficient to qualify a bank as being in the business of receiving deposits," he said.

Still, the FDIC is considering an amendment to its policies that would specifically allow banks with as little as one depositor to be considered "in the business of receiving deposits." The proposal was to have been considered by the agency's board on Dec. 14 but was withdrawn from the agenda at the last minute. Last week FDIC officials refused to discuss the proposal, why it was withdrawn, or whether it would be presented at a future board meeting.

Monogram's lawyers appealed the ruling to the Fifth U.S. Circuit Court of Appeals on Dec. 13.

In a statement, a spokesman for the bank said, "GE Capital believes the decision is clearly wrong on the law, and the FDIC agrees with our position."

Louis L. Plotkin of the New Orleans firm Gertler, Gertler, Vincent & Plotkin represented the plaintiff, Ms. Heaton. "We believe that the judge was correct in the ruling, and we believe the ruling will be vindicated on appeal," he said.

The appeals court is not expected to act on the appeal for months.

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