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sec. 24 (1994). On May 1, 1989, the Comptroller of the Currency
issued a charter certificate to WFNNB authorizing it to commence
the business of banking as a National Banking Association. The
articles of association of WFNNB (the articles) state that the
association is organized to carry on the business of banking
under the laws of the United States. The articles incorporate in
full the CEBA credit card institution restrictions. See supra
note 3. In pertinent part, Article THIRD provides:
The association
(i) will engage only in credit card operations;
(ii) will not accept demand deposits or deposits that
the depositor may withdraw by check or similar
means for payment to third parties or others;
(iii) will not accept any savings or time deposit of less
than $100,000;
(iv) will maintain no more than one office that accepts
deposits;
(v) will not engage in the business of making commercial
loans; * * *
Petitioner subscribed to 175,000 shares of the common stock of
WFNNB (par value $17.5 million). In consideration of receipt of
those shares, petitioner contributed all of the stock of Limited
Credit and WFN to WFNNB, which corporations were thereafter
liquidated and dissolved. WFNNB is a wholly owned subsidiary
corporation of petitioner.
Credit Operations of World Financial Network National Bank
Upon receipt of its charter, WFNNB entered into agreements
(the merchant agreements) with the stores. The merchant
agreements concerned credit cards to be issued by WFNNB to
customers of the stores and embodied the contractual relationship
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