Could a South Carolina savings and loan association convert directly into a state bank in 1995?

Official title

Concerning whether a State chartered savings and loan association may convert its charter to a state chartered bank.

Requester

Louie A. Jacobs, Commissioner of Banking, State of South Carolina Board of Financial Institutions

Plain-English summary

The banking commissioner asked whether a state-chartered savings and loan association outside a holding company could convert directly to a state-chartered bank. The 1995 informal opinion said a court would likely uphold the board’s longstanding interpretation that such conversion was unauthorized. The savings-association statutes expressly permitted several other conversions, while no provision expressly covered the proposed savings-association-to-bank change. The author acknowledged arguments from broader reorganization and corporation-law provisions, but thought the more specific conversion provisions pointed against implied authority. He concluded that express legislative authorization would be the safest course before board approval.

Currency note

This opinion was issued in 1995. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Did the opinion find an express savings-association-to-bank conversion provision? A: No. It identified provisions for other charter conversions but none expressly authorizing this one.

Q: Did general corporation-law amendment powers settle the issue? A: No. The letter considered them but said the specific conversion scheme and board’s historical interpretation pointed the other way.

Q: Did the AG say a court was certain to reject conversion? A: No. The prediction was that a court would likely uphold the board’s existing interpretation.

Background and statutory framework

The letter compared express conversion provisions within the Savings Association Act with broader reorganization and corporation-law arguments. It also cited judicial respect for an administering agency’s statutory construction.

Citations and references

• Sections 34-28-200 and 34-28-210 and Section 34-28-220, provisions for other conversions cited in the letter.
• Dunton v. South Carolina Board of Examiners of Optometry, cited on deference to the administering board.

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/june-19-1995-1/
• Original PDF: https://www.scag.gov/wp-content/uploads/2013/12/95june19jacobs.pdf

Original opinion text

The State of South Carolina

OFFICE OF THE ATTORNEY GENERAL
CHARLES MOLONY CONDON
ATIORNEY GENERAL

June 19, 1995
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Mr. Louie A. Jacobs
Commissioner of Banking
State of South Carolina Board of
Financial Institutions
1015 Sumter Street, Room 309
Columbia, South Carolina 29201
Dear Mr. Jacobs:
You have requested the opinion of this Off ice as to whether a State chartered savings and loan association may convert its charter to a state chartered bank. The savings association in question is not owned by a holding company. According to your letter, the State Board of Financial Institutions (Board) has historically determined that this type of conversion is not authorized by State law; however, you note, as possible authority for such a conversion, s.c. Code Ann. S34-28-230 (1987) which, under the terms of that law, permits a savings association to reorganize, merge or consolidate into another association. In addition, in materials sent by a savings and loan association which are attached to your letter, reference is made to S34-28-20 of the Savings Association Act which provides that the provisions of the South Carolina Business Corporation Act apply to any savings association when not in direct conflict with or superseded by the savings association laws. Further reference is made then to S33-10-101 ( 1970) of the Business Corporation Act which permits amendment of articles of incorporation to add or change a provision. "[T]he construction of a statute by the agency charged with its administration will be accorded the most respectful consideration and will not be overruled absent compelling reasons." (Emphasis added). Dunton v. South Carolina Board of Examiners of Optometry, 291 S.C. 221, 353 S.E.2d 132, 133 (1987). Therefore,

REMBERT

c. DENNIS BUILDING

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POST OFRCE Box I 1549

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COLUMBIA, S.C. 29211-1549

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TELEPHONE:

803-734-3970

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FACSIMILE: 803-253-6283

Mr. Louie A. Jacobs
June 19, 1995
Page 2
the Board's historic interpretation of savings and bank laws as not authorizing such a conversion would be likely to be upheld by the courts. Despite the references in SS 34-28-20, 34-28-230 and 33-10101, the Board's interpretation appears to be consistent with South Carolina law. Other parts of the Savings Association Act, of which S34-28-230 is a part, specifically provide for the conversion of federal savings associations into state chartered savings associations and the conversion of state chartered associations into federal associations. Sections 34-28-200 and 34-28-210 (Act
#124, 1985 Acts 389).
Section 34-28-220 also provides for the
conversion of a state or federal mutual association to a state capital stock association. In addition, S34-1-110 authorizes the Board to permit state chartered savings associations to engage in any activities authorized for federally chartered savings associations. I also note that S34-3-810 contains provisions for conversion of a national bank into a state bank. None of these provisions expressly provide for the conversion of a state chartered savings association into a state chartered bank.

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The rule followed in this State is, "expressio unius est exclusio alterius", which means that the ".
. enumeration of
particular things excludes the idea of something else not mentioned." Pennsylvania Nat. Mut. Cas. Ins. v. Parker, 282 s.c. 546, 320 S.E.2d 458, 463 (Ct. App. 1984); Sutherland Statutory Construction, Vol. 2A S47.23. Although SS34-28-20, 34-28-230 and 33-10-101 appear to provide some general authority for such a conversion, the specific provisions for other types of conversions and for the exercise of banking powers by savings associations without any statutory reference to the conversion of a state chartered savings association into a state chartered bank, may indicate that the legislature did not intend for this type of conversion to occur absent future statutory provision. Therefore, for the foregoing reasons, a court would be likely to uphold the Board's historic interpretation of South Carolina law as not authorizing conversions of state savings associations into state chartered banks. The safest legal course of action would be to receive specific legislative authorization before the Board approves any such conversion. This letter is an informal opinion. It has been written by the designated Assistant Deputy Attorney General and represents the opinion of the undersigned attorney as to the specific questions asked. It has not, however, been personally reviewed by the Attorney General nor officially published in the manner of a formal

Louie A. Jacobs
Page 3
June 19, 1995

opinion.

I hope that this information is of assistance to you. Yours very truly,

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