WASHINGTON - Two banking trade groups this week implored the Louisiana Supreme Court to resolve whether the state can prevent national banks from selling insurance in small towns.

"This case is simply too important for the court not to hear," the American Bankers Association and the Louisiana Bankers Association said in a court brief filed Monday. "On it depend both a critical interpretation of state law . . . and the opportunity for Louisiana banks to compete fairly against those of other states."

The groups want the justices to overturn the appellate court's decision in the case, First Advantage Insurance Inc. v. Green, which focuses on a 1989 attempt by First National Bank of Denham Springs to sell insurance to residents in its small town.

Both the trial court and the appellate court upheld the state insurance commissioner's refusal to grant the bank a license to sell the products, setting up this appeal.

The trade groups argued that the Louisiana prohibition against bank insurance sales applies only to state-chartered institutions, and the lower courts misinterpreted it. They also said the National Bank Act overrides any state prohibitions on bank insurance sales.

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