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MCENTEER v. CLARKE

September 25, 1986

BEN McENTEER, Secretary of Banking, Commonwealth of Pennsylvania
v.
ROBERT L. CLARKE, Comptroller of the Currency of the United States of America; BANK OF NEW JERSEY, N.A., a national banking association; and HORIZON BANCORP, a bank holding company



The opinion of the court was delivered by: KATZ

 MARVIN KATZ, J.

 In this case of first impression, I uphold a decision of the Comptroller of the Currency of the United States of America allowing the relocation across state lines of the main office of a national bank. 5 U.S.C.A. § 702 et seq. (West 1972). *fn1" A Pennsylvania statute to the contrary, 7 Pa. Cons. Stat. Ann. § 115 (Purdon Supp. 1986), cannot stand.

 On May 13, 1986, the Comptroller granted the request of the Bank of New Jersey, a national bank, which is a subsidiary of Horizon Bancorp, a New Jersey bank holding company, to relocate the national bank's main office from Moorestown, New Jersey to Philadelphia, Pennsylvania. The bank moved for legitimate business reasons to be active in the Philadelphia market.

 Plaintiff Ben McEnteer, Secretary of the Pennsylvania Department of Banking, has sued to invalidate the Comptroller's decision and to enjoin the move.

 This Court has jurisdiction of the subject matter of this action to review the final decision of the Comptroller under the Administrative Procedure Act. This action also arises under the National Bank Act, 12 U.S.C.A. § 21 et seq. (West 1980 & Supp. 1986). Venue in this district is proper under 28 U.S.C.A. § 1391(b) and (e) (West 1976 & Supp. 1986).

 Plaintiff is responsible for the administration of the Pennsylvania Banking Code. Pa. Stat. Ann. tit. 7, §§ 101-2204 (Purdon 1967 & Supp. 1986). Plaintiff is specifically authorized to enforce Section 115 of the Pennsylvania Banking Code. See id. at § 115 (c). As the state official responsible for effectuating state banking policy, plaintiff has standing to litigate this case.

 Defendant Robert L. Clarke is the Comptroller of the Currency of the United States of America. The Comptroller is responsible for the supervision and regulation of the operation of national banks chartered under the National Bank Act. *fn2" The Bank of New Jersey, N.A. ("the New Jersey Bank") is a banking association duly incorporated under the laws of the United States and authorized to engage in the business of banking under the National Bank Act.

 On May 6, 1985, the New Jersey Bank made application to the Comptroller to relocate its main and only office from 312 West Route 38, Moorestown, New Jersey to 226 Rittenhouse Square, Philadelphia, Pennsylvania, a distance of approximately 11 1/2 miles. *fn3"

 On June 5, 1985, the Pennsylvania Department of Banking filed a timely comment letter with the Comptroller of the Currency in opposition to Bank of New Jersey's relocation. The Department stated in its letter that: (a) 12 U.S.C.A. § 30 does not permit interstate relocation of a main office, (b) the Commissioner's approval of the relocation would violate § 1842(d) of the Bank Holding Company Act. 12 U.S.C.A. § 1842(d) (the "Douglas Amendment"), and (c) approval would violate section 115 of the Pennsylvania Banking Code, Pa. Stat. Ann. tit. 7, § 115 (Purdon Supp. 1986).

 By decision dated May 13, 1986, signed by Judith A. Walter, Senior Deputy Comptroller for National Operations, the Comptroller granted the application of the New Jersey bank to relocate its sole banking office from Moorestown, New Jersey to Philadelphia, Pennsylvania. The Comptroller ruled that 12 U.S.C.A. § 30(b), rather than state law, controlled in this matter and that this statute allowed the interstate relocation of a main office, based on a reading of that statute as amended in 1959 and in 1982 and 1983. Decision of the Comptroller of the Currency on the Application of the Bank of New Jersey, National Association, Moorestown, New Jersey, to Relocate Its Main Office to Philadelphia, Pennsylvania, at 6-9. The Comptroller ruled that section 1842(d) of the Bank Holding Company Act (12 U.S.C.A. § 1842(d)) was inapplicable to the facts of this case. Decision of the Comptroller, at 6-9. In addition, the Comptroller ruled that even if state law, rather than federal law, applied to this case, the Pennsylvania statute at issue probably violated the Commerce Clause and thus would not withstand constitutional scrutiny. Decision of the Comptroller, at 10-14. The New Jersey bank, in light of the Comptroller's decision, opened its office in Philadelphia, Pennsylvania on May 23, 1986.

 Plaintiff contends that the decision of the Comptroller is unlawful for the same reasons raised in its letter of opposition to the Comptroller. Plaintiff, in this proceeding, moved for a preliminary injunction to enjoin the New Jersey bank from conducting business in Philadelphia, Pennsylvania, to enjoin Horizon Bancorp from owning or controlling any bank in Pennsylvania, and to enjoin the Comptroller from taking any action to implement or enforce the decision approving the relocation. I denied the motion for a preliminary injunction, following a hearing, in my Order and Memorandum of June 27, 1986.

 Section 30(b) of the National Bank Act provides in part as follows:

 
Any national banking association, upon written notice to the Comptroller of the Currency may change the location of the main office . . . with a vote of the shareholders owning two-thirds of the stock of such association . . . and upon receipt of a certificate of approval from the Comptroller of the Currency, to any . . . location within or outside the limits of the ...

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