561 (1969). This is the standard for judicial review set by the Administrative Procedure Act.
An examination of the record discloses that, prior to granting his approval, the Comptroller had conducted a hearing at which several protestants expressed their views, conducted a field investigation and accumulated extensive documentation regarding economic and bankings conditions in Alaska and in the Fairbanks area. He considered the present and future banking needs of that city and the effects of the proposed branch on its banking community, including the possibility of loss of banking business to plaintiff and other competitor banks.
In First Citizens Bank and Trust Company v. Camp, 409 F.2d 1086 (4 Cir. 1969), involving approval of a branch where the State law required that the branch "meet the needs and promote the convenience of the community to be served" and that the "solvency" of the branch be assured, the Court first found that the Comptroller was bound by those requirements and then noted that neither the State statute nor any decided cases define those concepts or provide any specificity as to the factors which would show the presence or absence of "needs and convenience."
No Alaska statute or cases have been found which define what is meant by "a sound banking system" or which suggest factors, proof of which would show that a proposed branch was or was not "detrimental to a sound banking system." In the absence of any binding State standard and because the Comptroller had sufficient evidence from which to determine whether or not the new branch would be detrimental to the soundness of Fairbanks' banking system, his construction of that criterion cannot be upset. That he determined the new branch would not be detrimental to sound banking is implicit in his approval.
No precedents have been found under Alaska law for the "deceptive name" provision. The Comptroller however has preconditioned his approval of the branch charter on the use of a distinctive designation by that branch to eliminate any possibility of confusion arising from name similarity. FNB Anchorage has agreed and undertaken to stress the name "Interior City Branch" predominantly, in its advertisements and other public representations concerning this banking office. It is obvious that the Comptroller considered himself bound by, and did follow, the "deceptive name" restriction in the Alaska statute. His determination that the use of a distinctive designation would satisfy that restriction is not improper or an abuse of discretion.
As further grounds for requesting this Court to set aside the Comptroller's approval of the FNB Anchorage application, plaintiff claims that the Comptroller arbitrarily and capriciously violated its rights to administrative due process (1) in approving the branch for reasons not made public (2) in acquiescing in the applicant's refusal to testify and submit to cross-examination at the hearing and (3) in failing to accord the proper weight to the application and supporting data in light of the Comptroller's rules governing the hearing, with respect to witnesses who fail to testify.
The clear weight of authority holds that the Comptroller in considering branch bank applications is not subject to the hearing procedures found in the Administrative Procedure Act, 5 U.S.C. §§ 554-557, and that the same considerations which led Congress to exempt him from the necessity of holding a formal adversary hearing also excuse him from filing written opinions expressing his reasons for approval or denial, e.g., Sterling National Bank of Davie v. Camp, 431 F.2d 514, 517 (5 Cir. 1970); accord, National Bank of McKeesport v. Saxon, 268 F. Supp. 720, 723 (D.C. Pa. W.D. 1967). There are no provisions in the National Bank Act branching section, 12 U.S.C. § 36, requiring that the Comptroller either issue an opinion or make his reasons public.
Hearings conducted by the Comptroller have an investigative or fact-gathering, not a fact-finding purpose. First Citizens Bank and Trust Company v. Camp, supra.
The record discloses that at the hearing FNB Anchorage offered no oral testimony but rested on its application. Plaintiff and several other protestants, including the State Director of Banking and Securities, testified in opposition to the branch application. Plaintiff made no objection during the hearing to the refusal of FNB Anchorage to offer testimony or submit to cross-examination. Indeed plaintiff's president appeared at the hearing, which had been granted at the request of the protestants, without counsel.
There is no evidence in the record as to what weight the Comptroller accorded to the applicant's failure to offer testimony at the hearing. Plaintiff refers to the Comptroller's hearing procedures which provide in part:
The refusal of a witness to submit to such questioning shall be considered by the Regional Administrator in determining the weight, if any, to be accorded that witness' testimony.
No objection was raised at the hearing to the applicant's reliance on previously submitted written testimony.
It does not follow from the approval of the application that the Comptroller accorded any weight or did not accord sufficient weight to the fact that the applicant failed to offer oral testimony at the hearing. That failure to testify was only one of the factors included in the extensive quantum of evidence upon which the Comptroller based his approval.
After oral argument by counsel and careful examination of the entire administrative proceedings, the motions for summary judgment and the supporting points and authorities, the Court finds that the Comptroller's approval of the branch application is substantially and rationally supported and is neither arbitrary, capricious nor unreasonable. The Court further finds that the Comptroller did not violate plaintiff's administrative due process.
Accordingly, it is this 14th day of May, 1971,
Adjudged that defendant's and intervenor's motions for summary judgment be and they are hereby granted and plaintiff's motion for summary judgment is denied. Plaintiff's motion for a preliminary injunction to restrain the Comptroller from issuing a certificate authorizing operation of the branch pending a decision on the merits is hereby rendered moot.
This memorandum opinion will constitute findings of fact and conclusions of law. Counsel for defendant will submit an appropriate order.
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