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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.
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
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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