those letters, Mr. Hill attempted to outline the rationale supporting the FCA's decision not to grant the requested charter amendments. Mr. Hill stated:
Your request for an expanded territory is not authorized under the remedies provided by the FCA Board to associations affected by 411 mergers, which require institutions to use the express merger authorities contained in section 7.8 of the Act to achieve lending authorities equivalent to those of section 411 ACAs.
Letter from David Hill to Leon Leiser (April 20, 1989) (emphasis added) (re: Buckeye Application); see also Letter from David Hill to Leon Leiser (April 20, 1989) (re: Fostoria Application). Similarly, in response to inquiries made by Ohio Congressman Michael Oxley, Marvin Duncan, Acting Chairman of the FCA, explained the basis for the agency's action in the following manner:
The FCA Board has not permitted associations to take other steps outside of the express authorities provided by the statute that would result in de facto mergers but that don't directly involve stockholders in the decision. Expanding territory through amended charters while operating under joint management results in such a situation. It has been the Board's belief that the statute intends such steps resulting in a merger to be part of a proposal submitted to the institution's stockholders so that they, the owners of the institution, may exercise their control over the destiny of their credit cooperative. . . .
The FCA has the general power to approve amendments to the charters of associations. However, the agency's interpretation of section 411 and section 7.8 precludes the FCA from using its general charter amendment authority for the purpose set forth in the request by the Buckeye PCA and the FLBA of Fostoria, FLCA.
Letter from Marvin Duncan to Honorable Michael Oxley (May 25, 1989), AR at 60-61 (emphasis added). Thus, the FCA has consistently taken the position that it lacks the authority to grant plaintiffs' requests. This Court disagrees. The FCA clearly has the power and the authority to grant charter amendments. The determination as to whether such an amendment should be approved is left to the sound discretion of the FCA and subject to judicial review. In its denial letters, the FCA did not adequately address the merits of Plaintiffs' applications. Instead, it took the position that it lacked the authority to grant the relief requested. The FCA's assertion does not comport with this Court's understanding of the provisions of the Farm Credit Act.
At this time, the record is devoid of any specific findings that led the FCA to deny the applications, other than FCA's assertion that it lacked the authority to grant Plaintiffs' applications. The Court emphasizes that it takes no position on the merits of plaintiffs' applications. Congress conferred the authority to approve or deny charter amendments upon the FCA, not upon this Court. However, in the exercise of authority, the FCA must provide a reasoned analysis and factual basis for any decision that it makes. See State Farm, supra.
Accordingly, this matter must be remanded to the FCA for reconsideration upon the merits. Because the FCA's final decision on remand may moot the issues raised in the remaining counts of plaintiffs' complaint, this Court will not rule on the merits of those claims.
An appropriate order accompanies this Opinion.
United States District Judge
ORDER - July 17, 1990, Filed
Upon consideration of the parties' cross-motions for summary judgment, after hearing oral argument from counsel, after a review of the entire record herein, and in accordance with this Court's memorandum opinion of this date, it is this 16 day of July, 1990, hereby
ORDERED that this matter be remanded to the Farm Credit Administration for reconsideration of plaintiffs' applications for charter amendments in accordance with this Court's opinion.
United States District Judge