Supreme Court Rules on Banking Law

NATIONAL banks in midsized and large cities may sell annuities, the Supreme Court ruled unanimously yesterday.

The justices reversed a lower-court decision that had called annuities a form of insurance, which could not be sold by banks in cities of more than 5,000 residents. The decision agreed with the government's and nationally chartered banks' interpretation of a murky federal law.

The lower court ruling had been appealed by a brokerage subsidiary of NationsBank and by the federal comptroller of the currency.

``We respect as reasonable the comptroller's conclusion that brokerage of annuities is an `incidental power necessary to carry on the business of banking,' '' Justice Ruth Bader Ginsburg wrote.

Banks sold about $12 billion worth of annuities in 1992, representing one-fifth of all annuities sold nationwide.

NationsBanc Securities - the brokerage subsidiary of NationsBank of North Carolina, based in Charlotte - got approval from the federal government in 1990 to sell annuities to its customers.