in Section 143.3 of the regulations relating to the initial steps to be taken in forming an association in which there is specific provision that the subscriptions to the capital of the institution shall be paid into a 'savings account.'
The defendants in their trial brief point out another important distinction between the status of a bank depositor and a depositor in a savings and loan association. A bank depositor does not in that status have any voice in the administrative operation of the bank but is in all respects a mere creditor. On the other hand, a depositor in a federal savings and loan association becomes a member of the association and is entitled to vote in determining management policies. This fact again emphasizes the status of the depositor as a shareholder.
Reference is next made to Section 145.2 of the challenged regulations. This section provides that a federal savings and loan association 'shall issue to each holder of its savings accounts an account book, or a separate certificate, evidencing the ownership of the account and the interest of the holder thereof in the capital of such federal association.' (Emphasis supplied.)
Other sections of the regulations are quoted by the defendants as further substantiating their position in this case, but the Court believes that further enumeration of these provisions and their legal significance is unnecessary for the purpose of this opinion. The Court must look to actualities rather than terminologies in this situation. The legal distinctions between the status of a depositor in a bank and a depositor in a federal savings and loan association are well defined. It is probable, as plaintiffs suggest, that many depositors in federal savings and loan associations do not recognize their legal status or the distinctions that exist between their savings accounts and a similar account in a state or national bank. This lack of understanding, or lack of interest, has not however anything to do with the legality of the defendants' regulations. There is nothing in the record to indicate that depositors in a federal savings and loan association are being misled. Their status is correctly defined in the regulations and in the account books or certificates which are issued to them. The fact that the word, 'savings,' is used now where the word, 'shares,' or 'shareholders,' was used prior to 1949 has no significance in determining the legality of the action of the defendants. As a matter of fact, Congress has specifically provided that a federal association shall be called a 'savings and loan association.'
The observations which the Court has outlined to this point, while confined in the Court's discussion to regulations, apply equally to the charter changes which are similarly the subject of plaintiffs' complaint.
The Court is of the opinion that the 1949 regulations of the Federal Home Loan Bank Board here under attack are legal, authorized and enacted within the authority of the Board.
The Court must point out that the question of whether the conduct of the federal savings and loan associations in accepting 'deposits' in 'savings accounts' constitutes 'engaging in banking business' is not before the Court for decision at this time.
2. The plaintiffs' legal standing to sue upon the basis of the defendants stipulating for purpose of determining this question that the business of banking may be conducted in Wisconsin by only such organizations, including plaintiffs, as are chartered to operate as banks, and upon the assumption for the purpose of determining this question that the factual allegations of the complaint are true.
The plaintiffs allege that they have an exclusive right to conduct a banking business within the State of Wisconsin and that this right has been invaded by federal savings and loan associations illegally conducting a banking business since promulgation of the regulations of March 7, 1949 by the Federal Home Loan Bank Board, to the loss and damage of the plaintiffs. In addition, the plaintiffs contend that the defendants as administrative officials have acted illegally, that the illegal acts are individual acts and not sovereign acts, that the defendants' acts are ultra vires and therefore may be made the object of specific relief, since the defendants' illegal acts have resulted in a tortious invasion of plaintiffs' property right to exclusively conduct banking business in the State of Wisconsin. The plaintiffs, therefore, invoke the provisions of Sections 1331, 1391 and 2201 of Title 28, and Section 1009 of Title 5, United States Code (The Administrative Procedure Act).
The defendants answer that they have not undertaken to regulate the plaintiffs in any way, have not ordered the plaintiffs to abandon any of their activities, nor have they subjected plaintiffs to any obligations or duties. Defendants say that the plaintiffs' complaint is merely that they are suffering competition from federal savings and loan associations, that Congress has granted the plaintiffs no right to be free from such competition, and that the plaintiffs' sole object is to eliminate a competition which they fear. The defendants deny that the plaintiffs have alleged any injury or threat to a particular right of their own and therefore challenge the plaintiffs' status to sue.
Briefly stated, then, the defendants rely upon a substantial number of cases cited in the footnote below which set forth the established principle that in order to have status to sue, the plaintiffs must establish that some legal interest of theirs, personal to them and recognized by law, has been violated to their legal injury.
The Court has carefully reviewed the cited cases and finds in them no situation legally comparable to the status of these defendants. Collectively the plaintiffs by federal or state charters are empowered to conduct banking business in the State of Wisconsin. No other institutions are so empowered. The plaintiffs' charter, then, represents a property right which they are entitled by law to protect. As indicated, this status differentiates these plaintiffs from all of the plaintiffs in the enumerated cases.
The defendants challenge the applicability of Section 10 of the Administrative Procedure Act, basically upon the contention that the plaintiffs do not show a legal wrong because of agency action. As indicated, the Court believes that plaintiffs have legal rights for the protection of which they are entitled to seek judicial action and legal redress. The Court concludes, consequently, that the plaintiffs do have the necessary standing to maintain this suit.
In summation, then, the Court is of the opinion (1) that the plaintiffs have legal capacity toto maintain this action, but that (2) the regulations and charter changes promulgated by the defendants are within their statutory authority and are authorized and legal. The Court, accordingly, finds for the defendants upon this second point.