
    Savings Bank’s Agency.
    
      Banks and banking — Savings bank — Agency to receive deposits — Act of May 20, 1889.
    
    
      1. A savings bank has no authority to appoint an agent for the collection of deposits in a locality other than that particularly designated in its certificate of incorporation.
    2. Savings banks should be held strictly within the privileges expressly granted to them by the Act of May 20, 1889, P. L. 246.
    May 8, 1924.
   Department of Justice. Opinion to Hon. Peter G. Cameron, Secretary of Banking.

Brown, Dep. Att’y-Gen.,

— This department is in receipt of your request for an opinion upon the following state of facts:

A savings bank in this State, incorporated under the Act of May 20, 1889, P. L. 246, has an agency in a town some miles distant from the town in which the bank is located. This agency is in charge of a man who acts in the capacity of a clerk for the bank, and is under bond for the faithful performance of his duties. He receives deposits and receipts for them, and deposits so received are placed to the credit of the savings bank in a national bank in the town where they are received, but such deposits can be withdrawn only at the main office of the savings bank. No other business is transacted at this agency. You ask to be advised if such transaction is legal.

In section 2 of the Act of May 20, 1889, P-. L. 246, it is provided that in the certificate of incorporation of savings banks the location or place of business shall be particularly designated.

Section 3 of the same act provides that the location shall be convenient of access to depositors, and that the Auditor General is to determine whether the population in the neighborhood designated affords reasonable promise of the support of the bank.

By the provisions of section 6, process is to be served on the president or cashier during the usual hours of business, and, according to the provisions of section 9, the name and post-office address of each officer and trustee, and the place where the bank’s business is to be carried on, designating the same by street and number, are to be sent to the Auditor General, and section' 10 provides that there must be no change of location of the bank without the consent of the Auditor General.

By the.establishment of a Banking Department the Auditor General has been relieved of the duties imposed by the act, and they have been placed upon the Commissioner, now Secretary of Banking.

It will be seen that in the Act of 1889 the law contemplates that the savings bank is to have one place of doing business and is to be located in one place, and this is to be in a community of sufficient population to make its success a certainty. Nowhere in the act does it provide that there are to be different places of doing business. Neither does it contemplate that agents are to be employed for the purpose of soliciting or receiving deposits, nor is there any provision in the law for the payment of agents to solicit or receive deposits, or for any appropriation of the funds of depositors for any such employment.

The designation of places or persons simply to receive deposits is not doing business at a different place from the location of the bank to as great an extent as if a general business was transacted at such agency, but where the person receiving such deposits is the agent of the bank, whether paid for his services or not, even the receiving of a deposit and the issuing of the bank’s credit in return for the deposit so made is such a doing of business at different places as is not clearly permitted or contemplated by the act. If one or a dozen such agencies may be established, there can be no limit placed upon their number or upon the amount of deposits which may be received by them.

I have no doubt that depositors or groups of depositors may select any one of their number, a shareholder or trustee of the bank, or any other person, and designate such a one as their agent to receive their deposits and take them to the savings bank. This is not a doing of business by the bank itself at different places or through different agencies; but when the bank goes beyond this and designates agents at different points distant from the bank itself to receive deposits on the credit of the bank, it is doing business in different places at the same time and in a manner not authorized by law.

The Act of 1889, so far as I am able to find, has never received judicial construction. In view of the fact that the institutions for which it provides are without capital stock and in their supervision grave responsibilities are imposed upon the Department of Banking, and in view of the fact that these institutions obtain their credit and standing in great degree from the fact that their operations are under the supervision of the Department of Banking, it is clear that they should be held strictly within the privileges expressly granted them by the legislature. To permit these to be transcended would be a violation of the plain intent of the law.

I am of the opinion, and, therefore, advise you, that no authority exists for savings banks to establish agencies for doing business in different places or in any place other than that particularly designated in their certificate of incorporation or in that to which it is changed by proper legal proceeding.

From C. F. Addams, Harrisburg, Fa.  