AGO 96-5.

• Case Date: January 08, 1996
• Court: South Carolina

South Carolina Attorney General Opinions 1996. AGO 96-5. 22January 8, 1996 OPINION NO. 96-5The Honorable Louie A. JacobsCommissioner of Banking Board of Financial Institutions 1015 Sumter, Street, Room 309 Columbia, South Carolina 29201

Re: Informal Opinion

Dear Commissioner Jacobs: You have requested our advice regarding the scope of authority of an out-of-state bank which has been selected by the federal government to serve Marine Corps Recruit Depot, Paris Island (hereafter MCRD). Apparently, the Fort Sill National Bank of Fort Sill, Oklahoma, will establish a facility at MCRD Paris Island. Although the authority of the federal government to establish banking facilities on military installations is well founded, the issue you have raised is critical to an understanding of the services which Fort Sill National may provide to its customers. Clearly, as a general matter, the South Carolina General Assembly possesses broad authority to regulate the operation of banks in South Carolina. Floyd v. Thornton, 220 S.C. 414, 68 S.E.2d 334 (1951); Am. Trust Co. v. S. C. State Bd. of Bank Control, 381 F. Supp. 313 (D. S. C. 1974); FDIC v. American Bank Shares, 460 F. Supp. 549 (D. S. C. 1978). While this regulatory power apparently does not extend to banking operations within the confines of MCRD Paris Island, any attempt by Fort Sill National to establish a facility outside the physical limits of the base would fall within the South Carolina Legislature's authority to circumscribe branch banking. To that end, even a bank which is federally chartered is not completely immunized from state law. FDIC v. Raffa, 882 F. Supp. 1236 (D. Conn. 1995). 23Specifically, 12 U.S.C. Section 36 provides the conditions upon which a national banking association may retain or establish and operate a branch or branches. Subsection (c) in pertinent part states:

[a] national banking association may, with the approval of the Comptroller of the Currency, establish and operate new branches; (1) Within the limits of the city, town or village in which said association is situated, if such establishment and operation are at the time expressly authorized to State banks by the law of the State in question; and (2) at any point within the State in which said association is situated, if such

...