*1 457 COMPANY v. BANK & TRUST ARKANSAS DOUGLASS, the State of Insurance Commissioner Lee Arkansas, Life Underwriters State Association of Arkansas 885 S.W.2d 93-1242 Arkansas Court of Supreme October delivered Opinion *3 Watson, III, B. and Robert S. Paul Benham Dewey John Shafer, for appellant.
Jean Langford for appellees.
Michael G. Smith for Independent Intervenors-Appellees, Ins. of Arkansas. Agents curiae,
Candace Franks for amicus Arkansas State Bank Dep’t. Jr., Gill, F. Crotty,
Robert M. John and Michael for Clearly, curiae, Bankers American Bankers Ass’n and Arkansas amici Ass’n. Glaze, Bank & Trust Justice. The Arkansas
Tom appellant (ABT) in Hot state-chartered bank located Springs. Company 1907, ABT been in the business of Since its has incorporation banking of full-line insurance selling policies through ABT Insurance a division ABT. of a Agency, Because change law, in insurance ABT had to license apply corporate-agency was issued insurance commissioner appellee grandfathered 1970. under the new statutes prohibit- banks from in full-line insurance engaging business. While the individual sold who on behalf employees policies 1970, of ABT were licensed the insurance did prior department not licenses issue corporate-agents prior 1980, Bancshares,
In the stockholders of ABT formed ABT a one bank holding and transferred all their in ABT company, stock bank, to Bancshares. As part ABT insurance became wholly-owned Bancshares. In First Com- (FCC), mercial Corporation multi-bank holding company, 30, 1990, became On May Banc- incorporated. acquired 1,090,836 shares exchanging FCC common all shares for FCC, of the ABT shares held by Bancshares. As the ABT part insurance agency became a of the multi-bank part group. FCC received a notice of hearing from insur- ance department, ABT that advising the'purpose hearing was to determine if the license issued in corporate-insurance 1970 to ABT should be revoked. State Arkansas Asso- Appellee ciation of Life (ASALU) Underwriters intervened admin- istrative proceeding, ABT’s license arguing grandfathered *4 be should revoked as result of the of Bancshares acquisition by FCC. the Following an hearing, commissioner issued order permanently ABT’s license. ABT revoking to the cir- appealed cuit court of Garland which the County affirmed commissioner without comment. the Having stay obtained a commissioner’s order, ABT brings this The State appeal. Arkansas Bank Depart- ment, and the American Bankers and Arkansas Bankers associ- have ations filed amici curiae briefs in favor of ABT.
Review of administrative agency decisions both by the circuit court and this is court limited in The scope. appellate directed, court, court’s review is not toward the circuit but toward the decision of the the and construction of agency, a statute by an administrative is not overturned agency unless it is clearly Inc., Dynamic v. wrong. Douglass 315 Ark. Enterprises, However, S.W.2d (1994). 869 14 where the statute is and plain this will unambiguous, court the statute mean interpret only 456, 855 313 Ark. Dist. v. Alphin, Sch. City Junction what it says. addition, its court will not substitute this (1993). S.W.2d is decision unless agency’s that of agency judgment Inc., at Enterprises, Dynamic arbitrary capricious. in favor force its given strongest probative the evidence Finally, the agen- court not reverse ruling, may and this of the agency’s there is evidence to support if substantial cy’s any decision Board, 312 Id.; v. Licensing Brimer Ark. Contractors decision. (1993). S.W.2d 948 Ark. decision, relies on
In its commissioner’s appeal commis- (1) the statute which the three following points: license is to revoke ABT’s insurance agency sioner relied on nature, in dero- ABT’s in grandfather rights, penal restrictive of construed; law, (2) be the common and must gation strictly under and may the statute “great grandfather” rights ABT has license, notwithstanding acqui- maintain its insurance agency FCC; an (3) sition of ABT Bancshares statute permits a bank to be bank is also exempt agency acquired without its insurance license. losing holding company A number of raised control issues statutory provisions cause, 23-64-203(a) the first of Ark. this which is Code Ann. § 1991)1,which provides follows: (Supp. part state,
For the the com- protection this people issue, continue, shall or exist any missioner not permit broker, consultant, or to insur- solicitor license as agent, than ance other life and disability, compliance except with this chapterf.]
Further, the commissioner is authorized to regula- promulgate effectuate the of the statute which are “to help tions to purposes maintain the between institutions and the insur- separation and to unfair com- ance business minimize possibilities their institutions or petitive deceptive practices by lending brokers, affiliates or affecting agents, public.” subsidiaries 23-64-204(b)(5) 1991). Ann. These code pro- Ark. Code (Supp. *5 a also contain the issuance general prohibition against visions institution, an or license to lending any any currently 23-64-203 23-64-203 was amended in 1993 and is found at 1 Section § 1993). (Repl. institution, a affiliate of to officer lending any or or employee a institution in with a lending any exceed- municipality population five thousand to ing according the latest federal decennial cen- sus. Ark. Code Ann. In 23-64-203(b) 1991). addition to (Supp. § here2, are which not at issue these code providing exceptions pro- — visions contain a with clause certain limitations grandfather — mentioned for licensed agents employed lending institu- tions. That clause as follows: provision provides However,
(1) institution, lending subsidiary, affil- iate, officer, or the holder the control employee, lending institution may otherwise be issued a qualified license to: brokers, solicitors,
(C) Successor agents, are who brokers, otherwise as qualified, successors those agents, and solicitors who are from the restrictions set exempt out turn, in this section and their successors so long for institution with agency which successor broker, or solicitor agent, appointed is continuing 25, 1975, as it was constituted on March and no function broker, successor agent, or solicitor is permitted to be or employed directly controlled indirectly any lend- institution ing agency except agency he was so licensed as a successor. addition, 23-64-203(b)(l)(C) added). (Emphasis 23-64- § § 203(b)(2) provides qualified grandfather clause for corporate such as agencies ABT as follows: hereof,
For the purposes transfer of subsequent or control of a agency other subsidiaries or of that affiliates lending institution 25, 1975, with which the associated on March not shall prohibit commissioner from granting renewals brokers, orof license to successor agents, and solicitors. added). (Emphasis
And finally, 23-64-203(b)(3) is a provision acknowledging 2 Despite general institutions, prohibition against licensing lending statute’s may mortgagor’s commissioner issue a license to a institution to sell decreas insurance, accident, insurance, mortgagor’s term life health sickness credit life insurance, accident, 23-64-203(b)( )(A). credit and credit health and accident insurance. I
463 business, but insurance doing institutions lending grandfathered lose an institution to such that could cause out events also spells 23-64-203(b)(3) reads as follows: Section status. its Likewise, restrict the shall in this section nothing bro- additional agents, of the by appointment expansion solicitors, kers, through purchase the by acquisition lending an existing and consolidation merger or of 25,1975, was March on agency where agency institution or, a an partnership individual proprietorship, operated owned by was not its stock capital a corporate agency if the profits institution and no part a lending of insti- lending a indirectly or directly inured benefit of However, the licensing relative to those restrictions tution. brokers, and its agency, agents, a institution lending solicitors, the agency shall attach upon transfer of the right partic- or either of indirectly transfer directly the agency ipation profits of added). to a institution. lending (Emphasis the foregoing statutory pro- For of understanding purposes visions, is defined as has any entity a where it of money of business this state accepts deposits place banks and including savings from the lends public money, addition, 23-64-203(b)(4)(A). In con- and loan associations. § exercise a influence over deciding is defined as power trol institution, unless is solely management power 23- an with the institution. the result of official position § 64-203(b)(4)(E). that,
First, FCC a holding because argues company institution, of it FCC did not and not a lending acquisition 23-64-203(a) license under divest ABT of corporate-agency own- (b) because those do not address provisions, provisions (But 23-64-203(b)(l) dis- see holding ership by company. below.) In ABT cites Glastonbury cussed its argument, support Gillies, (1988), A.2d 8 wherein the v. Conn. Co. subsidiary’s, insurance commissioner rescinded bank Connecticut to sell insurance. status Glastonbury grandfathered Company’s, obtaining law bank subsidiaries from Connecticut prohibited licenses, to sell insurance but banks licensed lawfully in the insurance law went into effect could continue when the status, business. While Glastonbury qualified grandfathered sold its insurance subsequently business and did not seek reli- After ten censing. years passed, Glastonbury was relicensed to *7 insurance, sell but the Connecticut insurance commissioner license, rescinded the he had erred. stating The commissioner that explained Glastonbury lost its status because it failed exempt to hold its license The trial continuously. court and disagreed, the Connecticut Supreme Court the trial upheld court’s holding that the Connecticut law was not ambiguous and that the grand- father clauses did not impose requirement continuous licen- so, sure. In doing Connecticut court held that it must apply terms; statutory enactments to their according plain concluded that if the state’s legislature had desired a continuous licensure requirement, legislature could have inserted it into the law. The Glastonbury case is readily distinguishable from the case, if for present no other reason than Arkansas’s statutory pro- visions set out above do provide certain conditions must continue in order for a lending to remain licensed to sell insurance. For ABT example, was grandfathered to continue to sell insurance so as it long continued to function as it was 25, constituted on March Also, See 23-64-203(b)(l)(C). ABT would become subject to license restrictions to lending if institutions its ownership transferred or it transferred par- in its ticipation profits directly to a indirectly institu- See 23-64-203(b)( tion. )(C)1 and -203(b)(3). We turn now to those and pertinent facts evidence on bearing these con- statutory ditions for required ABT’s continued grandfather status.
The Arkansas insurance commissioner found that on May 1990, FCC acquired 1,090,836 Bancshares by exchanging of FCC common shares for one hundred (100% percent 116,596) of the ABT shares. Bancshares was created as a solely stock, one-bank holding for ABT’s company performed no Thus, other functions. one hundred percent ABT, including ABT insurance agency, to FCC passed essen- as ABT existed tially when it was first licensed. FCC,
At the time of the transfer to FCC awas multi-hold- for other company lending institutions and ABT became part of that affiliate which the group, commissioner characterized as a “multi-bank or multi-lending group.” Management super- visory over authority institutions within the group, ABT, vested in FCC’s “Affiliate Bank Network.” As including FCC received income from the fol- corporate parent group, (1) all of subsidiary lending two sources: institutions lowing FCC in an to one-half a dividend to amount equal provided net in each of the fiscal first three earnings year’s their pre-tax quar- ters, and an fourth dividend to all quarter earnings adjusted equal in excess of seven cent of from each subsidiary, per capital (2) under service fees to its subsidiaries “ser- charged by review, audit, vice as loan necessary services such agreements” and data all the ABT insurance from processing. profits $100,000 in excess of were to FCC a dividend paid which was with dividends other subsidiaries pooled paid by to benefit the and FCC’s shareholders. Witnesses for ABT group admitted that the other institutions within the “indi- group shared in the of the ABT insurance rectly” profits agency. *8 Finally, commissioner’s FCC func- findings suggest tions more like a bank than as a His holding company. findings recited Annual FCC’s 1990 wherein Stockholders FCC Report stated that financial in many institutions other of parts “[w]hile are under due to severe country siege asset quality problems strains on resulting FCC continues to liquidity capital, be one of the safest and soundest in the banking organizations FCC nation.” On fails to show the of fact appeal, findings by were in error or that the commissioner law the com- prevents missioner from the form of the looking beyond organization its substance.
This court defined generally “holding company” “a which owns or least controls such a super-corporation at dom inant in one interest or more that it is enabled corporations dictate their through voting policies power; corporation orga nized to hold the stock of Cheney other v. corporations.” Stephens, 541, 549, (1960) 231 Ark. (Citation omitted).3 S.W.2d 949 In Cheney, this court looked to the record and to the articles of in whether were incorporation determining activities Stephens’ acts of stocks in other whether “merely holding corporations” were its activities those of corporation actively busi engaged Id. ness. at 550. holding company 3 Thedefinition of bank is found in Ark. Code Ann. 23-64-
1802(b) 1994); 1841(a). (Repl. see also 12 U.S.C. § Here, there is substantial evidence to the commis- support sioner’s that FCC finding than actively engaged more merely holding stock its institutions. Ray Cash, an with officer ABT since testified that FCC had Further, $6 “infused million into ABT.” Cash plus testified that the intent of the FCC merger of and ABT was to achieve “an of scale” economy by and that ABT pooling operations, had a reduction in costs as a experienced result. Additionally, Cash testified “we are better on some getting expertise of our areas, loan review areas some of the other that we didn’t Jr., have before the Cecil merger.” chairman of Cupp, ABT’s directors, board and on FCC’s board of testified that even though none of the affiliate institutions within the have a group contractual to obtain right dividends and from ABT insur- profits ance there is indirect agency, and benefit those participation by Jr., affiliates through pooling FCC, dividends. Lynn Wright, chief financial officer for testified that the sharing expenses through FCC’s pooled operations “inures to the benefit of each of the Scott, subsidiaries as well as the acquired company.” Bobby CPA, documents, testified that review upon of various he deter- mined that ABT $3.4 dividend to FCC paid million in 1991 which was used to for the pay expenses maintaining pooled subsidiaries, services provided by to its and that part dividend came from paid earned profits ABT’s insur- Olson, ance Jake agency. Finally, Vice President and Manager of ABT’s insurance agency, testified as follows:
It used to be that the individual subsidiaries of [FCC] would obtain insurance in their coverages various munic- locations. Now there ipal is a ‘consolidation process’ ongo- all ing whereby the subsidiaries’s insurance business will be placed our ABT through Insurance Agency. Just the and property liability and the policy Directors and Offi- $540,000 cers liability policy should add about in addi- tional for our premium agency. added). (Emphasis From the it foregoing, is clear that FCC is actively involved institutions, the business of its affiliate lending and does more than hold their merely stocks or set policy through voting services, FCC power. manages pooled some of which are institution, strictly services performed by lending such as loan review. FCC Additionally, dictates to the affiliates which ser- Further, FCC determines their costs. be and are to pooled vices to it, dividends are to when those of dividends paid the amount Finally, to the affiliates. are allocated back and how those be paid, resource to be used as pool agency the ABT insurance management. under FCC’s insurance needs the affiliates’ (b) is clear and unam 23-64-203 The language § ABT With the 1990 merger, as indeed ABT concedes. biguous, with held a shell cor its stock from changed corporation Bancshares, corporation to a parent poration, The subsidiaries. involved in the business of its actively 1,090,836 common shares of all of ABT’s shares for exchange Further, and a transfer of control. FCC’s stock was in the of its sub was involved business actively in the ABT the stock transfer resulted use of Finally, sidiaries. affiliate insti to benefit ABT’s profits tutions, and the of those affiliates to participate prof right and allo through services agency indirectly pooled its of FCC. cation of dividends controlled Next, in argument addition to its clause involv- discussed, 23-64-203(b) another argues ing sion, just provi- mentioned, 23-64-203(c), not but which it yet through 203(c) was claims ABT Provision “great grandfathered.” pro- follows: vides as contained in sub-
Notwithstanding requirements section, (a) (b) this sections or commissioner may who, imme- renew or continue license of as of persons 1, 1960, were licensed as diately prior January lawfully under laws then in force. All the licenses solicitors agents shall, however, be to the other subject applicable provi- sions of this code. (1) held that: unavailable
The commissioner this subsection was 1, 1960, and ABT since held no license no prior January time; (2) at license was available to any corporate agency under the discretionary renewal of licenses subsection him; (3) the on must be resolved binding not subsection (b) (a) which were within of subsections interpretation enacted *10 commissioner,
The in to harmonize attempting provisions 203(a), (b) (c), and stated following: 468 intended to the Insurance Legislature prohibit
[T]he Commissioner from license of continuing agent’s any or affiliate of a institution ... with cer- caveats, tain including exceptions “grandfather- It agencies[.] of certain when ing” equally clear reading whole, A.C.A. 23-64-203 as a and consistent with the forth, set that purposes expressly Commissioner must view area this entire and insurance banking relation- conservatively with a ships leaning toward restricting rather promoting than dangers perceived by Legis- lature as to the being posed public It is agencies. ... manifest that overall thrust leg- islation is to “freeze” grandfathered lending institution 25, agencies in the form that existed they on March in the original). (Emphasis
ABT’s to the commissioner’s this on response ruling point even is that if it loses license under other subsections of (b), 203(c) this 203(a) grandfather clause” under “great saves it. While it had been acknowledging not a granted corporate license until argues had received a constructive license its licensed in through employees continues their successors to the through day. ABT that present argues 203(c) any and to an interpret differently, require of it express condition an license at a time holding when licens- corporate was not available would ABT of due deprive process. Finally, ABT argues 203(c) that the application of to the circumstances case is not this with discretionary commissioner.
While distinguishable this court part, addressed similar Bank, issue in v. State Simpson Monette Ark. 381 S.W.2d There, (1964). the bank commissioner instituted declara- action to determine whether a tory teller’s window operated by Monette Bank in another town could be forced to and ter- close minate business because owned and locally full-service bank in the same At began doing business town. issue was a 1963 statu- that tory stated no teller’s window provision “shall be con- tinued at any after place legally bank has chartered actually at that commenced business at Id. 315. The place.” bank argued that a clause enacted in 1961 allowed teller’s win- dows already continue to operation despite enact- operate *11 Addi- otherwise. of the statutory providing ment provision a clause it gave the the argued grandfather bank that tionally, of window. In its teller’s vested to continue the right operation the history court of the this found arguments, bank’s rejecting in attitude of the legislature confirmed consistent legislation of banks by local encouraging requir- organization were char- teller’s windows when local banks the closure of ing held such leg- this court tered. bank’s rejecting arguments, inherent of state’s proper police islation within sphere Further, is corporation only because banking by privi- power. than a conditional privilege the bank never more possessed lege, to immediate revocation. This was constantly susceptible which view, too, contained language is with the discretionary consistent 203(c) “may” is instructed he renew wherein the commissioner in January who were licensed to prior the license on persons Like the business of insurance is sub- banking, corporate regulated by of the and is Arkansas legislature to mood ject But Ann. 23-60-103 —104 Insurance Code. see Ark. Code §§ 1994) granted by (Repl. exceptions. Any privilege previously to revocation amendment of by legislative statute subject code.
Here, the found that the insti lending commissioner to FCC have “the sort of ‘indirect’ right tutions within partici of 23-64- of in the second sentence profits spoken pate § which, line’ 203(b)(3) grandfather means that its ‘full necessarily, of must be lost.” substance the trans Looking protection than the form and actions between ABT FCC rather ignor shell, as a the commissioner found that corporate Bancshares of neither First Commercial Bank nor the other insti any could ABT without directly purchased tutions within FCC have Thus, the commissioner voiding ABT’s protection. held that the indirect between the insti sharing profits FCC resulted in a violation of the tutions within the network leg of full-line insurance islative intent to restrict ownership agen 23-64-203(b). cies institutions by lending pursuant § Next, that based on 23-64- language ABT argues 203(b)(3), it is from statute exempted prohibition FCC are institutions because neither Bancshares nor 23-64-203(b)(4)(A). It within the definition provided argues neither Bancshares from the deposits money nor accepts Further, ABT argues lends none FCC’s money. public have in the subsidiaries from ABT right participation profits those of that the including agency. its avers right FCC, to share flows to its is FCC profits up parent, *12 those and not the determines where affiliates. Fur- profits go ther, dollar cannot be to going from ABT to FCC traced other any since the are affiliate ABT the pooled. Additionally, argues profits commissioner the veil wrong was based piercing corporate on ABT the strictly public Finally, argues commissioner policy. 23-64-203(b)(3) as a divestiture misinterpreted provision. We touched ABT’s contention that the com- previously upon However, mission erred in the veil. it is nec- piercing corporate to the discuss further essary specific argument authority put forth ABT. In ABT cites support argument, Woodyard Co., (1980), v. Ark. Ins. Ark. 594 S.W.2d Diversified There, the where the challenged veil. subsidiary piercing corporate the commissioner had the ignored form of corporate subsidiaries them and found to avoid essentially being used the effects of the statutes issue the In parent the com- corporation. upholding decision, this court that missioner’s stated courts will the ignore form of a where fairness it. corporate subsidiary demands Fur- ther, this court stated that usually, this substance-over-form eval- will uation occur where it is to necessary prevent wrongdoing Here, and where the subsidiary is a mere tool of the ABT parent. that limits the argues Woodyard commissioner’s to ability pierce veil corporate to those cases in which there are find- specific that FCC and ings its subsidiaries have ceased functioning as entities or that subsidiaries are separate used to being pro- mote fraud.
First, reads ABT this court’s decision in Woodyard too noted, As narrowly. stated previously Woodyard court will ignore courts form where corporate “fairness” demands that, it. The court added will be this where is usually, neces and where the is a sary prevent wrongdoing subsidiary mere Here, tool of ABT’s own evidence parent. showed that form of the and FCC’s merger structure resulted the shar corporate ing by other institu agency profits Thus, tions. form allowed subsidiaries and corporate to do what could not do indirectly they No fraud was directly. but none required. ABT’s either FCC’s or parts on alleged here, the commissioner we hold described the circumstances to the substance form beyond corporate in looking correct and its subsidiaries. between FCC the relationships Next, the commissioner’s interpre ABT challenges held that wherein the commissioner 23-64-203(b)(2) tation of § and continuance allows “the reorganizations this subsection the lending there is a transfer of status whenever of the lend or affiliate other agency any institution Sec were in on March 1975.” as they place institution 23-64-203(b)(2) tion provides: hereof, the transfer of subsequent
For the purposes agency or control of a institution of affiliates of the other subsidiaries 25, 1975, March with which the was associated on renewals the commissioner from granting shall not prohibit brokers, and solicitors. license to successor agents, of or *13 ABT was divested of Under the commissioner’s interpretation, with FCC in status when Bancshares merged its grandfathered with FCC or the affil- since ABT had not been associated within the FCC network on March iate institutions lending we 23-64-203(b)(2), terms of Considering plain subsection is cor- hold the commissioner’s of this interpretation rect. that, since argues holding
Finally, companies statute, in the did not intend are not mentioned legislature a com that the transfer of lending agency holding course, divests the of its status. Of our agency pany veil answers this discussion concerning piercing corporate we would also out the introductory Nonetheless argument. point those or otherwise grandfathering exempt language provisions entities denied a license which certain or from persons being reads as follows: institution, affiliate,
However, a subsidiary, officer, or the holder the control a lending employee, of be issued a license to: institution otherwise qualified may added). 23-64-203(b)(l)) While the above language (§ (Emphasis is the only in 23-64-203 where place “the holder of the con- mentioned, trol aof institution” is would seem that the commissioner’s conclusions of law are correct that holding companies merely holding controlling stock another institution are included contemplated being within the mean- 23-64-203. ing of § conclusion, we find the commissioner’s order is thorough
and his is clear. on the reasoning Based discussion and foregoing statute, plain language commissioner’s decision was not arbitrary or substantial capricious, evidence exists his decision. support
Affirmed.
Brown, J., dissents. Brown, Justice, Robert L. No one dissenting. disagrees that now public policy has been set in this state to bank- separate ing institutions and insurance The companies. before question us, though, is whether the statutes in effect required in the separation case Bank (ABT). Arkansas & Trust Company I do not believe that they did.
The statutory which was language effective in on which this case turns reads:
However, those restrictions relative to the licensing brokers, lending institution agency, its agents, and solici- tors, shall attach the transfer upon either agency the transfer of or the right participation profits of directly indirectly to lending *14 institution.
Ark. 23-64-293(b)(3) Code Ann. 1991). (Supp. § 1980, ABT,
In which had an insurance agency as a compo- nent, was transferred to a one-bank ABT Banc- holding company, shares Corporation. ABT Bancshares Corporation a multi-bank acquired by holding First company, Commercial (FCC). FCC is and Corporation dividends service paid fees by its bank subsidiaries ABT Bancshares including and provides management expertise administrative services in return. The then is whether question this FCC acquisition by a constituted in indirectly or directly a bank to enabling participate transfer so, FCC would require If agency. the insurance the profits agency. of the insurance divest itself to is institution A lending institution. FCC is not state, in this business which has entity place as “any defined from public of money it deposits accepts at place and loan associations.” and savings banks money, including lends does (1987). clearly 23-64-203(b)(4)(A) Ann. Code Ark. § So a bank holding company. It is this definition. not fit under is not a to FCC Corporation ABT Bancshares the transfer of 23-64-293(b)(3) (Supp. under to lending transfer are They FCC. bank subsidiaries of 1991). leaves the other That Stated dif- made to them? was a transfer but institutions in the profits directly indirectly do ferently, they participate Surely to FCC? of the transfer because of the insurance and the in the agency’s profits, directly do not they participate Nor, think- my way admitted this. Insurance Commissioner in the agency’s profits. indirectly do ing, they participate theory contorted Commissioner adopted The Insurance are banks subsidiary to FCC by that the service fees paid FCC which is dividend paid ABT Bancshares’s subsidized This amounts to insurance agency profits. derived in from part in the agency’s profits, those banks a participation I with this convoluted reason- to the according theory. disagree ABT Bancshares pay all banks as well as ing. Again, well as service fees for a dividend to the as holding company audit, review, data loan pro- services such as managerial benefit The All subsidiaries from cessing. money pooled. fees, far indirect but that is a from cry partici- reduced service under defini- anybody’s in subsidiary’s profits another pation tion. that the statute in effect
The on to goes say majority opinion to FCC time the transfer of Arkansas Bancshares at the to bank holding embraced transfers of insurance agencies case, did the General Assem- But if that were the why companies. to amend this statute order find bly necessary Ann. Act codified at Ark. Code it? 592 of now clarify By included 23-64-203(b) 1994), the General Assembly (Repl. time causing the first grounds transfers to “affiliates” for *15 the divestiture of grandfathered agency. “Affiliate” is defined under Act as an a lending which controls entity institution. That means now would holding easily company n Act The attached Clause that the qualify. Emergency says reason for the is that the law is “in urgent need of legislation Furthermore, clarification.” Act clearly 592 is prospective it will as transfers effected application says apply only to after January 1993.
Act 592 would reached require result majority, but that Act was not effective in holding compa- nies, affiliates, were not under the prohibited “participants” —statute only lending institutions were. What majority opin- ion does is the bank structure in disregard company effect holding I 1990. would reverse the order circuit court. PICKENS, Ashman,
Andrew Pickens & Madelyn BLACK, Rebecca Jane Pickens Lambi v. Freddie B, and as Trustee Individually of R.A. Pickens A Trust & Estate; Pickens; as the Executor of R.A. Pickens Carol Black; Blackwell; Blackwell, III; Laurie Lea Owen Pickens; Lambi; Lambi; Luke Madelyn Catherine &
Daniel Pickens Lambi
94-137
Supreme Court of Arkansas 31, 1994 delivered Opinion October