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WASHINGTON- The U.S. Supreme Court declined a request by General Electric Co.'s Monogram Credit Card Bank of Georgia to clarify whether a federal judge's decision to send a case back to state court can be challenged in a federal appeals court.

Lurking behind the jurisdictional spat was a more interesting question that had caught the attention of federal and state banking regulators and groups like the American Bankers Association.

The issue: Whether banks like Monogram can sidestep tough consumer-protection laws in some states by basing operations in a state with more lenient rules on interest rates and fees.

At issue was whether Monogram is a "state bank" under the Federal Deposit Insurance Act. State banks can export to the rest of the country any rates and fees allowed in their home states. Since Georgia, where Monogram is based, allows the higher rates, Monogram's actions would be perfectly legal.

The statute defines a state bank as an institution "engaged in the business of receiving deposits." Attorneys for a consumer suing the bank said Monogram didn't meet that definition, in part because the bank's only deposits were about $670 million from other GE units.

But Monogram's attorneys said the credit card bank is backed by the Federal Deposit Insurance Corp., which approved Monogram for deposit insurance in 1988. The FDIC for years has said Monogram met the definition.

Monogram argued that the lawsuit should be heard in federal court, since it is a "state bank" governed by federal law. A federal district judge disagreed in 1999, ruling that the company is not a state bank and sending the suit back to state court for trial.

Monogram appealed the ruling to the U.S. Court of Appeals for the Fifth Circuit, which concluded that it lacked jurisdiction to hear the company's challenge. In the Supreme Court appeal, Monogram's attorneys said the Fifth Circuit's reasoning was at odds with decisions from several of its sister circuits.

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