- 22 -
respondent's motion with respect to this issue, we believe we
would need to know how time deposits and CD’s are regarded in
banking and commercial practice--and how, in that practice, they
are considered to differ (if at all) from "bank loans made to
customers". Or, to put it another way, we would need to know
whether bankers consider time deposits and CD’s to be "acquired"
or "issued", in a sense in which bank loans are not.
In addition, we would need to know whether time deposits and
CD’s are considered to be "investments" similar to third-party
commercial paper, while "loans" are considered to be
noninvestment "business done with customers". In this regard, it
would be helpful to know how the documentation evidencing--or
perhaps constituting--time deposits and CD's, differs from the
standard bank loan agreement or promissory note.19
In short, we believe that a number of factual questions
should be answered, before we could properly answer the legal
question raised by respondent's third argument: Whether our
holdings in Security Bank Minn. v. Commissioner, supra, and
Security State Bank v. Commissioner, supra--that Congress did not
intend sections 1281 and 1283 to apply to loans made by banks to
19 Other possible questions concern the importance of the
facts that the time deposits and CD's held by IFNB were in exact
multiples of $1 million, and that the majority of the obligors
were large foreign banks, both of which are factors that would
tend to make the time deposits and CD's much more liquid than a
typical bank loan.
Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 NextLast modified: May 25, 2011