UNITED STATES COURT OF APPEALS FOR THE D.C. CIRCUIT


INDEP COMM BNKR AMER

v.

FRS


98-1482a

D.C. Cir. 1999


*	*	*


Williams, Circuit Judge: Travelers Group, Inc. applied to  the Board of
Governors of the Federal Reserve System to  become a bank holding
company. Under s 3(a)(1) of the  Bank Holding Company ("BHC") Act, 12
U.S.C. s 1842(a)(1)  (1994), Travelers needed Board approval before it
could pro- ceed with its plan to acquire all of the voting stock of an
 existing bank holding company, Citicorp, Inc., and thereby  add all
of Citicorp's banking and nonbanking subsidiaries to  its group of
companies. After completing this transaction  Travelers planned to
rename itself Citigroup, Inc. The  Board approved Travelers's
application on the condition that  the new enterprise divest itself of
its insurance business  within two years, so as to comply with s
4(a)(2) of the BHC  Act, 12 U.S.C. s 1843(a)(2) (1994). And it found
the acquisi- tion in compliance with s 20 of the Glass-Steagall Act,
12  U.S.C. s 377 (1994), as none of Citigroup's affiliates would 
derive more than 25% of its gross revenues from bank- ineligible
securities. See Order Approving Formation of a  Bank Holding Company
and Notice to Engage in Nonbank- ing Activities, 84 Fed. Res. Bull.
985, 985 (1998), reprinted in  J.A. 1, 3-4 ("1998 Order").


The Independent Community Bankers of America  ("ICBA"), representative
of 5300 "community banks," i.e.,  relatively small and local ones,
petitions for review of the  Board's approval order. It claims that
Citigroup's obligation  to dispose of its insurance business within
two years, as  specified by s 4(a)(2) of the BHC Act, is not good


As to Glass-Steagall, ICBA says that the Board's construc- tion of s
20--imposing only a proportional limit on revenues  from ineligible
activities--is too loose, and should be supple- mented either with
some absolute volumetric limit so as to  prevent creation of a
diversified financial services behemoth,  or with a case-specific risk
analysis, or both. ICBA objected  to the acquisition in the Board's
proceedings, as required for  standing to challenge the action in
court. Jones v. Board of  Governors of the Fed. Reserve Sys., 79 F.3d
1168, 1170-71  (D.C. Cir. 1996). We have jurisdiction to review under
12  U.S.C. s 1848 (1994). We find the Board's interpretation and 
application of the statutes reasonable, and therefore affirm.


* * *


Section 4 of the BHC Act, 12 U.S.C. s 1843, limits the  permissible
financial activities for bank holding companies:


Except as otherwise provided in this chapter, no bank  holding company
shall--


...


(2) after two years from the date as of which it be- comes a bank
holding company, ... retain direct or  indirect ownership or control
of any voting shares of  any company which is not a bank or bank
holding  company or engage in any activities other than (A)  those of
banking or of managing or controlling banks  and other subsidiaries
authorized under [the BHC Act]  ..., and (B) those permitted under
[section 4(c)(8) of  the BHC Act]....


The Board is authorized ... to extend the two year  period ... for not
more than one year at a time ... but  no such extensions shall in the
aggregate exceed three  years.


12 U.S.C. s 1843(a) (1994) (emphasis added).


Travelers, the acquiring entity, was engaged in various  activities,
mainly insurance, not allowed for bank holding  companies under
exceptions (A) and (B). Accordingly, the  emerging bank holding
company could not lawfully "retain" 


stock in any subsidiary conducting that business for more  than two
years after the transaction by which it became a  bank holding
company. The Board thus made its approval of  the Travelers-Citicorp
transaction contingent on a commit- ment that Citigroup would conform
to the two-year divesti- ture requirement. ICBA offers a series of
arguments de- signed to prove that this literal compliance with s
4(a)(2) is  inadequate.


Section 5(b) of the BHC Act and Board practice. First,  ICBA urges that
s 5(b) of the BHC Act, 12 U.S.C. s 1844(b)  (1994), a general grant of
power to issue regulations and  orders so as to carry out the purposes
of the Act,1 requires  the Board to reject applications that would
frustrate its  purpose. Here, ICBA claims, Citigroup is thwarting the 
purposes of the BHC Act because it has no bona fide intent to  divest
itself of its insurance activities. Instead, it is using its 
temporary power to mix large-scale insurance and banking to  put
pressure on Congress to amend the BHC Act to allow  that mix. ICBA
also claims Citigroup will use the two years  to gain competitive
advantage over other financial corpora- tions.


ICBA is correct that Citigroup and the Board are in favor  of amending
the BHC Act. The officers of Citicorp and  Travelers have openly said
that they hope that Citigroup's  structure will encourage Congress to
amend the BHC Act.  See Trading Places: Travelers/Citicorp Press
Conf., CNNfn  (CNN television broadcast, Apr. 6, 1998), available in 
LEXIS, NEWS library, ALLNEWS File (quoting Sanford  Weill, Chairman
and CEO of Travelers). And the Board has  sent a unanimous letter to
Congress supporting amendment  of the BHC Act to permit the
combination of banking and  insurance activities. See id. (quoting
John Reid, CEO of  Citicorp). (Recent news reports indicate, in fact,
that Citi- group and the Board may be about to have their way. See 
Michael Schroder, "Glass-Steagall Compromise Is Reached:  Lawmakers
Poised To Pass Banking-Law Overhaul After 




__________

n 1 12 U.S.C. s 1844(b) provides in relevant part:


The Board is authorized to issue such regulations and orders as  may be
necessary to enable it to administer and carry out the  purposes of
this chapter and prevent evasions thereof.


Last-Minute Deals," Wall St. J., Oct. 25, 1999, at A2.) But  s 4(a)(2)
makes no mention of applicants' legislative hopes or  schemes, and the
Board's order, which ICBA acknowledges  tracks the statutory language,
clearly requires Citigroup to  make the necessary divestitures within
the specified time  period. See 1998 Order at 3, 12-13, 18, 66-67,
89-90, 107.  There is not the slightest suggestion that the Board
would  have applied the statute any other way if its policy views had 
been different.


Perhaps ICBA means to argue that the contingent charac- ter of
Citigroup's intent--the intent to comply with the law  unless Congress
amends the BHC Act--so deeply reduces the  probability of compliance
that its commitment should be  disregarded. But the statute does not
assign any role to the  emerging entity's reluctance to divest; and if
Citigroup ig- nores the Board's order (and the statutory mandate), the
 Board has adequate tools to force it into compliance and  punish its
misbehavior. See, e.g., 12 U.S.C. s 1847 (1994).


ICBA is on similarly thin ice with its charge that Citigroup  seeks an
unfair competitive advantage. As part of its condi- tional approval,
the Board secured commitments from Citi- group designed to prevent it
from leveraging its grace period  into a competitive advantage or
creating corporate relation- ships that could not be easily unwound.
See 1998 Order at  86-93.


So we are rather uncertain just what "purpose" of the BHC  Act ICBA
believes will be thwarted by the Board's adherence  to its language.
But even if there is some such frustrated  purpose, there is no basis
for ICBA's assumption that the  Board could have freely used the
general terms of s 5(b) to  trump specific statutory language. ICBA
points to instances  where, in ICBA's view, the Board did so. See,
e.g., Citicorp  (South Dakota), 71 Fed. Res. Bull. 789 (1985);
Wilshire Oil  Co. v. Board of Governors of the Fed. Reserve Sys., 668
F.2d  732, 733 (3d Cir. 1981). But the Board in those cases found 
that the proposed transaction had no purpose other than to  evade the
BHC Act's provisions. See Citicorp, 71 Fed.Res. Bull. at 789 (ordering
that Citicorp could not acquire a state- chartered South Dakota bank
to take advantage of a state law  allowing out-of-state bank holding
companies to engage in  large-scale insurance activities so long as


pete with South Dakota insurance or banking interests);  Wilshire Oil,
668 F.2d at 733 (upholding the Board's ruling  that a bank holding
company could not opt out of the BHC  Act by making a small change to
its withdrawal policy that it  had no intent to enforce).2 Here the
Board specifically found  that the merger was not an attempt to evade
the prohibitions  of the BHC Act. 1998 Order at 11.


More importantly, since those decisions the Supreme Court  has ruled
that the Board cannot use s 5(b) to bend its  statutorily granted
authority. Board of Governors of the Fed.  Reserve Sys. v. Dimension
Fin. Corp., 474 U.S. 361, 373 n.6  (1986). The Eleventh Circuit has
applied the Dimension  decision to overturn a Board ruling factually
similar to the  one in Wilshire. See Florida Dep't of Banking &
Finance v.  Board of Governors of the Fed. Reserve Sys., 800 F.2d 1534
 (11th Cir. 1986). Here, too, the Board cannot exercise non- existent
authority to alter the statutory text.


ICBA is also incorrect that the Board is bound by its cases  decided
under s 4(c)(9) of the BHC Act, 18 U.S.C.  s 1843(c)(9), which allows
the Board to exempt foreign bank  holding companies from the Act upon
determining that an  exemption would not be substantially at variance
with the  Act's purposes.3 In Fortis, 1994 Fed. Res. Interp. Ltr. 
LEXIS 313, and a related line of letter rulings, the Board  


__________

n 2 ICBA also argues that the Board has regularly departed from  the
statutory text by granting grace periods to existing bank  holding
companies whose acquisitions cause them to violate  s 4(a)(1) of the
BHC Act, 12 U.S.C. s 1843(a)(1). This case pres- ents no opportunity
to review the Board's practice of granting grace  periods under s


3 Section 4(c)(9) of the BHC Act, 18 U.S.C. s 1843(c)(9) provides  in
relevant part:


(c) The prohibitions in this section shall not apply to


...


(9) ... [a] company organized under the laws of a foreign  country ...
if the Board ... determines that ... the exemp- tion would not be
substantially at variance with the purposes  of this chapter and would
be in the public interest.


granted exemptions, but imposed substantial restrictions on  Fortis's
and the other companies' insurance activities. ICBA  asks why not
here? But the Board distinguished those cases  as being based on the
foreign bank holding companies' unique  ability to expand their
insurance businesses during any period  of exemption, and on the
Board's broad discretionary power  under s 4(c)(9) to grant or
withhold exemption altogether.  See 1998 Order at 87 n.102.


Board regulations. ICBA argues that the Board's regula- tions require
Citigroup to come into compliance with s 4(a)(2)  as quickly as
possible and to submit a detailed divestiture  plan before, or soon
after, the merger's approval. See 12  C.F.R. s 225.138(b)(1) (1999)
("[T]he affected company should  endeavor and should be encouraged to
complete the divesti- ture as early as possible during the specific
period."); id.  s 225.138(b)(2) (1999) ("[A bank holding company]
should  generally be asked to submit a divestiture plan promptly."). 
But these regulations are explicitly labelled "statement[s] of 
policy," and accordingly bind neither the agency nor the  public.
Syncor Int'l Corp. v. Shalala, 127 F.3d 90, 94 (D.C.  Cir. 1997). We
note, in any event, that the Board here  explained that a detailed
plan was unnecessary because of the  voluminous material in the record
concerning Travelers's  ability to comply with the divestiture


* * *


ICBA's second claim rests on s 20 of the Glass-Steagall  Act (the
"Act"), 12 U.S.C. s 377.4 The Act limits the  securities-related
activities of commercial banks and their  affiliates. Section 16 of
the Act, 12 U.S.C. s 24 (Seventh),  prohibits banks from underwriting
or dealing in any securi- ties, but specifically permits them to
underwrite United  States government obligations and state or
municipal general  obligations. The allowed activities are commonly
referred to  as "bank-eligible securities," while all others are
called, not  surprisingly, "bank-ineligible securities." See




__________

n 4 The Glass-Steagall Act is the common name for several scat- tered
provisions of the Banking Act of 1933.


dustries Ass'n v. Board of Governors of the Fed. Reserve  Sys., 900
F.2d 360, 361 (D.C. Cir. 1990). In contrast to s 16's  general
prohibition, s 20 permits companies affiliated with  banks to
underwrite or deal in securities so long as the  affiliate is not
"engaged principally" in those activities:


[N]o member bank [of the Federal Reserve System] shall  be affiliated
... with any corporation, association, busi- ness trust, or other
similar organization engaged princi- pally in the issue, flotation,
underwriting, public sale, or  distribution ... of stocks, bonds,
debentures, notes, or  other securities.... 


12 U.S.C. s 377 (1994) (emphasis added). The Board and the  courts have
read this limit as applying only to bank-ineligible  securities, see
Securities Industry Ass'n v. Board of Gover- nors of the Fed. Reserve
Sys., 839 F.2d 47, 58-62 (2d Cir.  1988) ("SIA I"), and ICBA does not
contest that reading.


In 1996 the Board adopted its current test, stating that if  an
affiliate derives more than 25% of its revenues from bank- ineligible
securities, it is "engaged principally" in such activi- ties. See
Revenue Limit on Bank-Ineligible Activities of  Subsidiaries of Bank
Holding Companies Engaged in Un- derwriting and Dealing in Securities,
61 Fed. Reg. 68,750,  68,754 (1996) ("1996 Order"). Instead, says
ICBA, at least  for a merger of this size the Board should examine the
risks  associated with the particular kind of bank-ineligible securi-
ties at issue and the absolute size of the merging entities' 
ineligible securities activities. Under those standards, ICBA  urges,
Citigroup--which contains several large securities  companies
including Salomon Smith Barney--is "engaged  principally" in
bank-ineligible securities activities.5


We must first consider our jurisdiction. The rule applied  to the
Travelers-Citicorp transaction is the rule adopted in 




__________

n 5 ICBA, in advocating an absolute volumetric test argued that one  of
the proper units of analysis was Citigroup as a whole, whereas  the
Board continued its policy of examining the businesses only 
subsidiary by subsidiary. In light of our disposition of the case we 
need take no position on this issue.


the Board's 1996 Order, which was reviewable in the court of  appeals
by a petition filed "within thirty days after the entry  of the
Board's order." See 12 U.S.C. s 1848. ICBA sought  no review.
Responding to the suggestion that this inaction  might preclude part
of its appeal, ICBA speaks as if it  challenged only the application
of the 25% rule to this case  rather than the rule itself. But in fact
there is not a great  deal left to ICBA's appeal if we must assume the
lawfulness  of the rule's standard--a 25% ceiling on the ineligible
busi- nesses' contribution to revenue, functioning as the exclusive 
limit under s 20. So we must decide whether the time limit  in s 1848
bars our review of ICBA's substantive claim against  the rule


We have frequently said that a party against whom a rule  is applied
may, at the time of application, pursue substantive  objections to the
rule, including claims that an agency lacked  the statutory authority
to adopt the rule, even where the  petitioner had notice and
opportunity to bring a direct chal- lenge within statutory time
limits. See Graceba Total Com- munications, Inc. v. FCC, 115 F.3d
1038, 1040-41 (D.C. Cir.  1997); Public Citizen v. NRC, 901 F.2d 147,
152 & n.1 (D.C.  Cir. 1990); NLRB Union v. Federal Labor Relations
Auth.,  834 F.2d 191, 195 (D.C. Cir. 1987); Montana v. Clark, 749 
F.2d 740, 744 n.8 (D.C. Cir. 1984) ("[W]here ... the petitioner 
challenges the substantive validity of a rule, failure to exer- cise a
prior opportunity to challenge the regulation ordinarily  will not
preclude review."); Functional Music, Inc. v. FCC,  274 F.2d 543, 546
(D.C. Cir. 1958) ("[U]nlike ordinary adjudi- catory orders,
administrative rules and regulations are capa- ble of continuing
application; limiting the right of review of  the underlying rule
would effectively deny many parties  ultimately affected by a rule an
opportunity to question its  validity."). Although the discussions of
the application excep- tion in several of these cases were dicta,
Graceba clearly  applied the exception. 115 F.3d at 1040-41 (excusing
failure  to challenge May 1994 rulemaking). By contrast, we have  said
that procedural attacks on a rule's adoption are barred  even when it
is applied. See Jem Broadcasting Co. v. FCC,  22 F.3d 320, 325 (D.C.


dural lineage of agency regulations, whether raised by direct  appeal,
by petition for amendment or rescission of the regula- tion or as a
defense to an agency enforcement proceeding,  will not be entertained
outside the 60-day period provided by  statute."); NRDC v. NRC, 666
F.2d 595, 602-03 (D.C. Cir.  1981) (dismissing petition alleging
procedural defects as un- timely); see also Public Citizen, 901 F.2d
at 152 ("[A] statuto- ry review period permanently limits the time
within which a  petitioner may claim that an agency action was
procedurally  defective.").


In one case, Raton Gas Transmission Co. v. FERC, 852  F.2d 612 (D.C.
Cir. 1988), we suggested that even at a time of  application
petitioners may obtain review of an agency regula- tion outside of a
statutorily prescribed period only for "gross  violations of statutory
or constitutional mandates, or denial of  an adequate opportunity to
test the regulation in court." Id.  at 615. We offered no explanation
for suddenly limiting  permissible statutory challenges to ones of
"gross" violation,  and we proceeded to reach the merits of the
petitioner's  claim, see id. at 617. Our later cases have returned to
the  long standing position allowing substantive challenges to the 
application of a regulation. See, e.g., Graceba, 115 F.3d at  1040;
Public Citizen, 901 F.2d at 152 & n.1. As a result, we  think it
inappropriate to follow the language of Raton. See  Haynes v.
Williams, 88 F.3d 898, 900 n.4 (10th Cir. 1996)  ("[W]hen faced with
an intra-circuit conflict, a panel should  follow earlier, settled
precedent over a subsequent deviation  therefrom."); Texaco Inc. v.
Louisiana Land & Exploration  Co., 995 F.2d 43, 44 (5th Cir. 1993)
("In the event of conflict- ing panel opinions ... the earlier one
controls, as one panel of  this court may not overrule another.")


Finally, one of our cases held that (absent special excep- tions, as
for a challenger that lacked a meaningful opportuni- ty to challenge
the rule during the review period) even a  party subjected to a rule
could not bring a substantive  challenge to the rule at the time of
enforcement. Eagle- Picher v. EPA, 759 F.2d 905, 914 (D.C. Cir. 1985)
(the "mere  fact that the rule is applied to the petitioner after the 
statutory period expires" is not enough to permit review); see 


also id. at 911-12 (discussing the limited exceptions). But in 
Eagle-Picher the statute authorizing judicial review explicitly 
prohibited all review after the prescribed period. See 42  U.S.C. s
9613(a) (1982) ("Any matter with respect to which  review could have
been obtained under this subsection shall  not be subject to judicial
review in any civil or criminal  proceeding for enforcement."), quoted
in Eagle-Picher, 759  F.2d at 911. The Administrative Conference of
the United  States in 1982 urged Congress not to prohibit challenges
to  the statutory authority for a rule unless there were a compel-
ling need for prompt compliance on a national or industry  wide basis,
see Recommendations of the Administrative Con- ference, 47 Fed. Reg.
58207, 58210 (1982), and the dearth of  statutes that prohibit review
after the statutory period has  run suggests that Congress has
generally agreed. See gen- erally Frederick Davis, "Judicial Review of
Rulemaking: New  Patterns and New Problems," 1981 Duke L.J. 279, 281,
282- 90 (reviewing statutes and cases). The statute at issue here,  12
U.S.C. s 1848 (1994), contains no such explicit bar. Ac- cordingly, we
may now turn to the merits and consider  ICBA's attack on the Board's
exclusive 25% revenue limit.


Section 20 of the Glass-Steagall Act prohibits a member  bank from
being affiliated with any corporation "engaged  principally" in
various bank-ineligible securities transactions.  We agree with the
Second Circuit that the term "engaged  principally" is "intrinsically
ambiguous." SIA I, 839 F.2d at  63. Thus we defer to any reasonable
Board interpretation.  See Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837,
842-43  (1984).


ICBA argues that s 20 is designed to minimize risk, and  therefore the
Board cannot confine itself to the revenue share  contributed by
bank-ineligible activities but must examine  such risk variables as
the nature of the bank-ineligible assets  at issue and the absolute
size of the merger participants. We  first address the Board's
selection of 25% for the limit, and  then these two special


Before 1987 the Board had no occasion to test the meaning  of s 20. In
1987, in response to specific requests to allow  non-bank affiliates
to engage in underwriting and dealing of 


bank-ineligible securities, the Board decided that an affiliate  is
"engaged principally" in bank-ineligible activities if: (1) the  gross
revenue from such activities exceeds 5-to-10 percent of  the
affiliate's total gross revenues; and (2) the affiliate's  activities
in each type of ineligible security accounts for more  than 5-to-10
percent of the total domestic market for that  activity in the prior
year. See J.P. Morgan & Co., 73 Fed.  Res. Bull. 473 (1987). As a
prudential matter, the Board  initially limited the share of
ineligible revenue to 5% so that it  could gain experience in
supervising such affiliates. The  Second Circuit struck down the
market share portion of the  test, leaving in place only the gross
revenues test. SIA I, 839  F.2d at 67 (2d Cir. 1988). It reasoned that
Congress had  been fully aware of the growing proportional role of
commer- cial banks in securities origination, and yet had explicitly 
chosen a formula directly reflecting its anxiety "over the  perceived
risk to bank solvency resulting from their over- involvement in
securities activity." Id. at 68. In Securities  Industries Ass'n v.
Board of Governors of the Fed. Reserve  Sys., 900 F.2d 360, 364 (D.C.
Cir. 1990), we noted that the  Second Circuit's decision had
necessarily upheld a pure reve- nue share test as an adequate


In 1989, the Board raised the ceiling on affiliates' ineligible 
activities to 10% of total revenue. See 1996 Order at 68751 &  n.10.
Finally, in 1996 it raised the ceiling to the current 25%.  1996 Order
at 68754. It noted at the time that some com- mentators worried that
its new rule would allow banks to  "affiliate with the nation's
largest investment banks, contrary  to the express purpose of section
20 of the Glass-Steagall  Act." Id. But it set the concern aside with
a look at history,  identifying the controlling question as whether
its test would  have allowed the sort of securities affiliations
prevalent in the  1920s and 1930s--the apparent sources of
congressional con- cern. Id. At that time, firms "deriving more than
25% of  their income from underwriting and dealing in securities were 


In its 1996 Order the Board also considered--and reject- ed--the idea
that increasing the gross revenues limit from  10% to 25% would cause
"an increased risk to the safety and 


soundness or reputation of the nation's banks or to the  federal safety
net." 1996 Order at 68755. It based that  conclusion on bank holding
companies' demonstrated ability  to manage the risks of investment
banking over the previous  nine years, the substantial safeguards in
place to insulate  banks from the failure of their affiliates, and the
independent  regulatory requirements administered by the Securities
Ex- change Commission that protect against insolvency of s 20 
affiliates. Id.


Where a statute can reasonably be understood to invite an  agency to
draw a quantitative proportional line, it is rare that  a court can
reject the agency's selection of one percentage  over another. We see
no basis for doing so here. According- ly, we turn to ICBA's main
attack, which is directed to  whether the statute allows the Board to
choose a purely  quantitative proportional line and thereby to
disregard other  indicia of risk and/or the absolute level of sales


Risk. In its 1996 Order, the Board determined that s 20  does not allow
for an independent examination of the risk  associated with the
particular type of securities activities at  issue. Instead, the Board
may only decide whether an affili- ate is "engaged principally" in
bank-ineligible activities. 1996  Order, 61 Fed. Reg. at 68754
("Congress itself has decided  when a company's risks of underwriting
and dealing are too  great to allow affiliation with a bank: whenever
they consti- tute a principal activity of that company."). The Board 
decided that more individualized analyses would be unwork- able, and a
case-by-case analysis would produce substantial  uncertainty among
affiliates and examiners. Id. at 68754.  (Recall that the limit
endures, rather than being a one-shot  issue at a moment of
acquisition.) Moreover, the Board  found that the level of risk from
an affiliation is already  examined as part of the required analysis
under the BHC  Act. See 12 U.S.C. s 1842(c); 1998 Order at 14-21, 74
n.19;  1996 Order at 68755. Although this analysis is limited to the 
moment a company applies to become a bank holding compa- ny, the Board
has continuing authority to examine the invest- ment activities of
affiliates whose investments put the bank  holding company's


s 1844(e)(1). The Board's decision appears entirely reason- able in
light of Congress's chosen language.


Absolute sales volume. As we observed before, the Second  Circuit in
SIA I found that the Board lacked the power to use  a market share
test. 839 F.2d at 67-68. It nonetheless left  open the possibility of
a volumetric limit of sales, id. at 68, an  option the Board had
rejected on the ground that it was too  easily subject to
manipulation, id. at 67. Thus, ICBA is  correct to observe that no
court has rejected the lawfulness of  such a volumetric limit. Nor do
we do so here. But at the  same time we believe that the phrase
"engaged principally"  strongly suggests, as the Second Circuit
observed, an over- riding concern with risks due to a bank affiliate's
"overin- volvement" in securities activity. Accordingly, we believe a 
test addressed solely to the ineligible securities business's 
proportional contribution to revenue is at least permissible  under s


* * *


ICBA concludes with a novel claim that the Board's action  violates the
constitutionally required separation of powers.  Had the Board acted
in violation of Congress's will, of course  there would be a logical
claim that such an assertion of power  by a part of the executive
branch violated "separation of  powers," but no such claim would be
necessary. Because it is  undisputed that the Board can exercise only
powers granted  by Congress, and (unlike the President) has none
supplied  directly by the Constitution, it appears that the activities
of  the Board (and other such agencies) will likely never call for 
the sort of analysis provided by the tripartite framework of 
Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 637- 38 (1952)
(Jackson, J., concurring), designed to take account  of powers held
directly by the President.


* * *


The Board's order is


Affirmed.