Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Girard Bank v. Board of Governors of Federal Reserve System

November 27, 1984

GIRARD BANK, HERITAGE BANK NATIONAL ASSOCIATION, MELLON NATIONAL CORPORATION, AND HERITAGE BANCORPORATION, INC., PETITIONERS
v.
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, RESPONDENT AND THE NEW JERSEY COMMISSIONER OF BANKING, INTERVENOR



On Petition for Review of an Order of the Board of Governors of the Federal Reserve System

Author: Seitz

Before: SEITZ, GIBBONS, and HUNTER, Circuit Judges.

Opinion OF THE COURT

SEITZ, Circuit Judge

Girard Bank ("Girard"), Heritage Bank National Corporation ("Heritage"), Mellon National Corporation ("Mellon"), and Heritage Bancorporation ("Bancorp") petition for review of an order of the Board of Governors of the Federal Reserve System (the "Board"). This court has jurisdiction to review the Board's order pursuant to 12 U.S.C. § 1848.

I.

Heritage is a national bank that has ninety branches in New Jersey and one branch in Pennsylvania. It is owned by Bancorp, a bank holding company principally conducting its operations in New Jersey.

Heritage was engaged in interstate branch banking prior to 1927, the effective date of the McFadden Act, 12 U.S.C. § 36. The McFadden Act, as a general matter, confined national banks to intrastate branching. Heritage is one of only two national banks, however, that had branch banks in more than one state prior to the Act, and were permitted to maintain interstate branches under the Act's "grandfather clause."

Girard is a Pennsylvania state-chartered bank. It is owned by Mellon, a bank holding company that does not conduct business in New Jersey.

Girard, Heritage, Mellon, and Bancorp ("Petitioners") entered into a merger agreement. For present purposes, we may characterize the merger as a two-stage transaction. First, Girard would merge into Heritage, with Heritage as the resulting bank. Girard stock, owned by Mellon, would be converted into and exchanged for newly issued Heritage stock. At the same time, the Heritage stock owned by Bancorp would be cancelled, leaving Heritage as a wholly owned subsidiary of Mellon. Second, Bancorp would be merged into Mellon. The shares of Bancorp would be converted into a right to receive Mellon securities or cash.

Because Heritage is a national bank, petitioners filed an application with the Comptroller of the Currency of the United States (the "Comptroller") for approval of the Girard-Heritage merger under the McFadden Act. In addition, the Board requested that the petitioners file an application for approval of the entire two-stage transaction under the Bank Holding Company Act, which regulates the ownership of banks. 12 U.S.C. §§ 1841-50. Petitioners, reserving an objection to the Board's exercise of jurisdiction, complied with the Board's request. Ultimately, the Comptroller approved the Girard-Heritage merger, but the Board denied approval of the entire two-stage transaction, holding that it was prohibited by the Douglas Amendment to the Bank Holding Company Act, 12 U.S.C. § 1842(d). Only the Board's order denying approval of the two-stage merger agreement is before this court on petition for review.

II.

The Board asserts jurisdiction over this transaction under three separate subsections of the Bank Holding Company Act. 12 U.S.C. §§ 1842(a)(3), which states:

It shall be unlawful except with prior approval of the Board . . . for any bank holding company to acquire direct or indirect ownership or control of any voting shares of any bank if, after such acquisition, such company will directly or indirectly own or control more than 5 per centum of the voting shares of such bank. . . .

Since Mellon would acquire 100% of the voting shares of Heritage if this transaction were consummated, the transaction falls ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.