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definition of a bank for purposes of BHCA but excluded from that
definition institutions engaging only in credit card transactions
(credit card banks).4 Thus, a company like petitioner, which was
engaged in neither banking nor a banking related business, could
own a credit card bank without violating BHCA. CEBA cleared the
way for petitioner to own a bank that could charge a uniform rate
of interest on credit card sales.5
As of March 15, 1989, World Financial Network National Bank
(WFNNB) was organized under the National Bank Act, see 12 U.S.C.
3(...continued)
related to banking. Id. at 7-9. To close the nonbank loophole,
Congress expanded the definition of the term “bank” in BHCA to
include any bank whose deposits are insured by the Federal
Deposit Insurance Corp., as well as any institution that
(1) accepts demand deposits or deposits that the depositor may
withdraw by check or similar means for payment to third parties
and (2) engages in the business of making commercial loans. See
12 U.S.C. sec. 1841(c)(1) (1994), as amended by CEBA, sec. 101,
101 Stat. 554-557. Congress maintained certain express
exclusions from the definition of the term “bank” and provided
certain, additional limited exceptions for, among other
institutions, credit card banks. See 12 U.S.C. sec. 1841(c)(2)
(1994); S. Rept. 100-19 supra at 11. An institution qualifies as
a credit card bank if it (1) engages only in credit card
operations, (2) does not accept demand deposits or deposits that
the depositor may withdraw by check or similar means for payment
to third parties or others, (3) does not accept any savings or
time deposits of less than $100,000 (except for certain deposits
held as collateral), (4) maintains only one office that accepts
deposits, and (5) does not engage in the business of making
commercial loans. 12 U.S.C. sec. 1841(c)(2)(F) (1994).
4 See supra note 3.
5 In 1986, Ralph E. Spurgin believed that the Comptroller of
the Currency had put a moratorium on the organization of nonbank
banks that would issue credit cards.
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