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POWER TO REGULATE COMMERCE COMPREHENDS

THE POWER TO CONTROL ENTITIES HAVING A SUBSTANTIAL

EFFECT

Black's Law Dictionary, 2nd Ed. states:

The power to regulate commerce, vested in congress, is the power to prescribe

the rules, by which it shall be governed The power embraces within its control all the instrumentalities by which commerce may be carried on, and the

means by which it may be aided and encouraged.

Article one Section 8 of the Constitution states congress shall have the power to

regulate commerce among the several states. This commerce clause is the legal

bedrock for all federal regulation of business activity that crosses state lines. Every

piece of federal economic regulation from the Sherman Antitrust Act (1890) to all of

the 1930s New Deal securities and The National Bank Act of 1933 has been made

constitutional by reference to the Commerce Clause.

In Federal Reporter, Vol. 66, No. 100, p. 28595). The OCC stated:

Federal authority over national banks stems from several constitutional

sources, including the Necessary and Proper Clause and the Commerce Clause

of the United States Constitution. . McCulloch v. Maryland.

In McCulloch v. Maryland, 17 U.S. 316, 406-408 (1819) the court noted that,

Among

the enumerated powers, we do not find that of establishing a bank or creating a

corporation. But there is no phrase in the instrument which, like the Articles of

Confederation, excludes incidental or implied powers and which requires that

everything granted shall be expressly and minutely described. [W]e find the great

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powers, to lay and collect taxes; to borrow money; to regulate commerce; The

power being given, it is the interest of the Nation to facilitate its execution. The court

concluded that the Necessary and Proper Clause required a construction that Congress

may exercise the implied powers to effectuate the enumerated powers.

In United States v. Wrightwood Dairy Co., 315 U.S. 110 (1942) the court said:

The power of Congress over interstate commerce is plenary and complete in itself, may be exercised to its utmost extent, and acknowledges no limitations

other than are prescribed in the Constitution.

To this end " [T]he bank is an instrument which is 'necessary and proper

for carrying into effect the powers vested in the government of the United

States.." Easton vs Iowa, 188 US 220, 231 Thus national banks perform a

public function.

PRIVATE PARTIES ENDOWED WITH STATE POWERS GOVERNMENTAL IN

NATURE ARE INSTRUMENTALITIES SUBJECT TO CONSTITUTIONAL

LIMITATIONS

In Terry v. Adams, 345 U. S. 461(1953) (Democratic primary considered state

action for constitutional limitations) the court said [W]hen private individuals or

groups are endowed by the State with powers or functions governmental in nature;

they become agencies or instrumentalities of the State and subject to its constitutional

limitations. "It is apparent that Jaybird activities follow a plan purposefully

designed to exclude Negroes from voting and,. to escape the Fifteenth Amendment's

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command that the right of citizens to vote shall neither be denied nor abridged on

account of race.

How is this different where, as the court in Easton, at-p.231 said The whole

opinion of the Court in the case of McCullough v. Maryland is founded on and

sustained by the idea that the bank is an instrument which is 'necessary and proper

for carrying into effect the powers vested in the government of the United States.'"

NATIONAL BANKS is an instrument and participant in Commerce carrying into

effect the powers vested in the government of the United States following a plan

purposely designed to deny homeowners of due process and equal protection and

escape the 5th Amendment.

National Banks mortgage lending powers are granted by the NBA. The power to

foreclose is incidental to its federally granted powers. All by virtue of the Commerce

Clause and All-- under color of federal law.

Alexander Hamilton believed in a symbiotic relationship between agriculture,

commerce, and manufacturing, and that progress in each of these sectors was

necessary for Americas economic development. (Report of Credit II, Dec. 1790)

In Montgomery County v. Federal National Mortgage Association, 13-1752

(2014), the court was Convinced that mortgage lending has a substantial effect

on the nations economy. Thus, the Fourth Circuit held that the tax exemption was

a necessary and proper exercise of Congress Commerce power. By implication,

foreclosures also have a substantial effect on the nations economy. The

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Substantial Effect Test determines the extent that Congress may control private

entities engaged in Commerce. Congress Commerce power may be exercised in

individual cases without showing any specific effect upon interstate commerce if

in the aggregate the economic activity in question would represent a general

practice . . . subject to federal control. Wickard v. Filburn, 317 U.S. 111, 127,128

(1942)

No elaborate explanation is needed to make evident the broad impact of

commercial lending on the national economy or Congress power to regulate

activities pursuant to the Commerce Clause. Lewis v. BT Investment Managers,

Inc., 447 U.S. 27, 38, 39 (1980)

By extending credit, national banks reach every manner of commercial

enterprise in the stream of commerce such, that its effect can properly be termed

pervasive.

Congress, having power to create a system of national banks, is the judge as

to the extent of the powers which should be conferred upon such banks, and has

the sole power to regulate and control the exercise of their operations. Easton:

238

Clearly such power is derived from the Necessary and Proper and Commerce

Clauses and "comprehends the control for that purpose.... For this purpose they

are the public property of the nation, and subject to all the requisite legislation

by Congress. United States v. Rand, 389 U.S. 121 (1967)

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NATIONAL BANKS ARE PUBLIC NOT PRIVATE CORPORATIONS

National banks are instrumentalities of the Government. Easton, 188 U.S. 220,

239

NATIONAL BANKS are not so private an entities as they would have you

believe that they should not be subject to the 5th

Amendment. National banks were

created under the Penumbra of the Constitution, and sired by the Necessary and

Proper and Commerce Clauses. Preemption of State visitorial powers is tested under

the Supremacy Clause. (12 U.S.C. 484) Even the banks ability to perform its

operations is governed under federal law.12 USC 21-43.

The NBA provides for the creation of national banks, and authorizes them to

exercise certain enumerated powers, as well as all such incidental powers as shall

be necessary to carry on the business of banking. 12 U.S.C. 24 Seventh.

Congress granted broad authority to the OCC to prescribe rules and

regulations to define the incidental powers of national banks beyond those

specifically enumerated in the statute., Wachovia Bank, N.A. v. Burke, 414 F.3d

305

In the OCCs publication National Banks and The Dual Banking System

(2003) p.11 states:

Supervision of most national banks is conducted through a network of over 60 field offices located throughout the country, while the largest, most

complex national banks are supervised by teams of examiners actually

stationed on premises at those banks.

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If national banks are such private entities why are government regulators stationed

on the premises to ensure compliance with the governmental purpose? Private entities

do not have the government quartered on their premises, and are not established

instrumentalities of the federal government.

Page 17 states:

The long-range goals of Congress for the national banking system supporting a stable national currency, financing commerce, acting as private depositories, and

generally supporting the nations economic growth and development So, today, national banks operate pursuant to federal authority contained in a

federally granted charter. [B, U]

Thus, under color of federal law.

The bank is an instrument which is 'necessary and proper for carrying into

effect the powers vested in the government of the United States.'"Easton, p. 231

Thus, ownership to control a corporation is not necessary under the Necessary and

Proper Clause.

In providing mortgage lending, national banks carry into effect the powers vested

in the government through the Commerce Clauseand a governmental function is

performed. Since the government has authorized mortgage lending it necessarily

implies authority to foreclose as part of the general lending functionsalso a

governmental function. Federal Land Bank v. Bismarck Co. of St. Paul, 314 U.S.

95 (1941)

The challenged activity here is foreclosures governed by 38-38-101, thus

establishing a nexus between the government and the private party to attribute the

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conduct of national banks to that of the government under the 5th Amendment Due

Process and Equal Protection.

Blum vs. Yaretsky, 457 US 991 (1982)

In Easton, 231 the court said [W]e cannot concur in the suggestions that national

banks, in respect to the powers conferred upon them, are to be viewed as solely

organized and operated for private gain. The court made it clear that the principles

enunciated in McCullough v Maryland, 17 U.S. 316(1819), and in Osborn v Bank of

the United States, 22 U.S.738(1824) were still applicable to the present system of

national banks. The court citing Osborn said that "The bank is not considered as a

private corporation whose principal object is individual trade and individual profit, but

as a public corporation created for public and national purposes. The court noted the

private business nature of the bank but concluded that the private parts of the bank were

subsumed by its public nature which benefits the nation.

In view of the holding in Osborn which was approved and held applicable to

later national bank corporations not directly created by Congress in Easton, why

should we now consider national banks private corporations?

Osborn made it clear that banks charter of incorporation not only creates it,

but gives it every faculty which it possesses. The power to acquire rights of any

description, to transact business of any description, to sue on those contracts, is

given and measured by its charter, and that charter is a law of the United States.

Take the case of a contract, which is put as the strongest against the Bank. . . [H]as

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this being a right to make this particular contract? [T]his question, too,

depends entirely on a law of the United States. p. 823

Did the national bank charter grant national banks the right to include power of

sale provisions that would obviate the need for meaningful hearing in a mortgage

contract? Is this not the right to deprive a person of procedural due process? Is the act

of foreclosing without a meaningful hearing within the scope of a law of Congress?

John Locke said nearly 300 years ago Nobody can transfer to another more power

than he has in himself. TWO TREATISE OF GOVERNMENT, BOOK II This

includes Congress.

Osborn tells us that national bank foreclosures must be done under the

authority of the federal charter, which is a law of the United States and therefore

under color of federal law. Thus National banks could be considered

governmental actors.

CONSTITUTION CONSTRAINS GOVERNMENTAL ACTION BY

WHATEVER INSTRUMENTS OR MODE THAT ACTION IS TAKEN

Judge Scalia in Lebron vs National Railroad Passenger Corp., 513 US

374,392 said:

If Amtrak is, by its very nature, what the Constitution regards as the

Government, congressional pronouncement that it is not such can no more

relieve it of its First Amendment restrictions than a similar pronouncement

could exempt the Federal Bureau of Investigation from the Fourth

Amendment. The Constitution constrains governmental action "by whatever

instruments or in whatever modes that action may betaken." (Cite) And under

whatever congressional label. .: "That the Congress chose to call it a

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corporation does not alter its characteristics so as to make it something other

than what it actually is . . ."

In this case, a corporation subject to the Fifth Amendment.

In Lebron, p.398 the court said:

Amtrak is not merely in the temporary control of the Government; it is established and organized under federal law for the very purpose of pursuing

federal governmental objectives, under the direction and control of federal

governmental appointees.It is in that respect no different from the so-called independent regulatory agencies which are run by Presidential appointees with fixed terms.

Like Amtrak, national banks are not merely in the temporary control of the

Government. They were established and organized under federal law for the very

purpose of pursuing federal governmental objectives, under the permanent direction

and control of a governmental appointee[s] with a fixed term. (Comptroller of the

Currency)

Justice Scalia said:

But it does not contradict those statements to hold that a corporation is an agency

of the Government, for purposes of the constitutional obligations of Government

rather than the "privileges of the government," when the State has specifically

created that corporation for the furtherance of governmental objectives, and not

merely holds some shares but controls the operation of the corporation through its

appointees. Lebron: 399

In Lebron, control by the government is exercised by a number of appointees by

the President, and confirmed by the senate to the board of Directors, while in national

banks, control by the government vests in the Comptroller of the Currency, who is

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appointed by the President for a 5 year term and confirmed by the Senate. 12 U.S.Code

2.

As Justice Scalia said, The Constitution constrains governmental action by

whatever instruments or in whatever modes that action may be taken." Lebron,

p.392

Both prongs in Lebron are satisfied to determine that NATIONAL BANKS is a

federal Instrumentality with a governmental function: The First Prong----fostering

commerce, and the very vital public purpose of the government to stabilize economic

and social conditions. Barnes v Anderson National Bank of Lawrenceburg, 169

SW2nd 833,838 (1943); and, The Second, involves the extent to which the federal

government retains control over the national banks corporation's efforts to achieve its

objectives under the Commerce and Necessary and Proper Clauses. Because they have

a Substantial Effect on Commerce, it MUST comprehend control for that purpose,

and to the extent necessary they are the public property of the nation, and subject

to all the requisite legislation by Congress. United States v. Rand, supra Therefore

NATIONAL BANKS, is a governmental actor subject to the 5th Amendment.

In Federal Land Bank of St. Louis v. Priddy, 295 U.S. 229,231-234 (1935) the

court said of land banks ".... They are 'instrumentalities of the federal government,

engaged in the performance of an important governmental function. The court noted

similarities to national banks. It concluded that land banks, although concededly

federal instrumentalities possess also characteristics of private business corporations

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distinguishable from the government itself, and from corporations wholly government

owned and created to affect an exclusively governmental purpose.

Yet, though the court in Priddy distinguished the land banks from wholly

government owned and created to effect an exclusively government purpose because

the bank had characteristics of private business corporations, six years later Scotus

decided Federal Land Bank v. Bismarck Co. of St. Paul, 314 U.S. 95 (1941) without

resort to the two prong test applied in Lebron. The court determined that the lending

functions were governmental not proprietary and said [W]hen Congress

constitutionally creates a corporation through which the federal government lawfully

acts; the activities of such corporation are governmental.

In FEDERAL LAND BANK OF WICHITA vs BOARD OF COUNTY

COMMISSIONERS OF THE COUNTY OF KIOWA, STATE OF KANSAS, 368 U.S.

146 (1961) the court, citing Bismarck at 9 said If the enabling Act is constitutional

and if the instrumentality's activity is within the authority granted by the Act, a

governmental function is being performed.

The conclusions drawn from Bismarck and County of Kiowa, as self-evident

truths, are that if the lending activities are governmental, and foreclosure is part of

the general lending functions as held, then foreclosure is a governmental activity

and the federal land bank governmental actors subject to the 5th amendment

because they must foreclose under color of federal law.

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The same is true for NATIONAL BANKS N.A. predicated on the same

premise. Scotus cases support the conclusion that NATIONAL BANKS, as a

federal instrumentality, is subject to the 5th

Amendment when pursuing

foreclosures.

Before this court are three cases that justify this conclusion, Bismarck, Kiowa and

Lebron whose approach may differ, but their analysis would arrive at the same

conclusion.

Congress, having the power to create national banks for a governmental

objective must be able to control them under the necessary and proper clause and

the commerce clause to effectuate the governmental objective. Congress must also

be able to control their private attributes to the extent necessary so as not to

undermine the governmental objective. The two prong test in Lebron firmly

imprints the mark of governmental actors on national banks like NATIONAL

BANKS N.A.

CONCLUSION

In view of the foregoing arguments, Appellant believes she is still the Real

Party in Interest and that the arguments and the issues should be decided in her

favor and remanded back to the federal court to proceed accordingly.

Respectfully,

_______________, Dated:______________, 2015

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Lisa Kay Brumfiel