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January 30, 1991

BANK ST. CROIX, Plaintiff,

George H. Revercomb, United States District Judge.

The opinion of the court was delivered by: REVERCOMB


 Plaintiff, Bank St. Croix, Roberts, Wisconsin (the Bank), filed this action in response to a temporary cease and desist order issued by the defendant Federal Deposit Insurance Corporation (FDIC). After a hearing, the Court denied the Bank's application for a temporary restraining order to suspend the effect of the cease and desist order. The Court then ordered that the hearing on the Bank's application for a preliminary injunction be consolidated with a hearing on the merits of the Bank's case. Subsequently, the Bank withdrew its request for a hearing. The Court now considers the parties' cross motions for summary judgment as well as the Bank's application for injunctive relief based on the pleadings.

 This case arises from the events surrounding the Bank's application for FDIC approval to open a branch office in Hudson, Wisconsin. The Bank claims that approval was given on September 27, 1990, that the approval was later "withdrawn" on October 31, 1990, and then subsequently denied in a manner that was "statutorily deficient and therefore ineffective and void." Complaint at 7. Upon the advice of counsel, the Bank opened its new branch as planned on November 5, 1990, after receiving notice of the "withdrawal of approval." Id. para. 17. On November 16, 1990, the Bank received notice that the FDIC had denied its branch application. Id. para. 20. The same day, the Bank was served with the FDIC's Temporary Order to Cease and Desist pursuant to § 1818(c), Findings of Fact and Conclusions of Law, and a Notice of Charges and of Hearing pursuant to 12 U.S.C. § 1818(b). Id. para. 21. The Bank now asks this Court to suspend or set aside the temporary cease and desist order pending completion of an administrative hearing and to declare the FDIC's denial of its branch application ineffective and void. Id. at 7.

 Although requested by the Court to submit a Joint Stipulation of Facts, the parties were apparently unable to reach an agreement as to the undisputed facts. Despite this factual contention, the Court finds that the documents submitted to the record clearly set forth the factual basis underlying this case.

 Bank regulatory agencies, such as the FDIC, "are charged with the task of overseeing [the nation's] banking system for the protection of the public and the national economy as a whole, and not for the benefit or protection of individual banking institutions." First Nat'l. Bank of Scotia v. United States, 530 F. Supp. 162 (D.D.C. 1982). Congress has provided such agencies with a powerful arsenal of regulatory tools, including the power to issue and enforce cease and desist orders. To further enhance these regulatory powers, Congress has restricted the availability and extent of judicial review of such agency orders. Accordingly, although this Court may issue injunctive relief "setting aside, limiting, or suspending the enforcement, operation or effectiveness" of a temporary cease and desist order pending the completion of administrative proceedings, it will do so only when the agency has abused its discretion in issuing the order.

 The Bank has raised several arguments concerning the agency's actions in respect to its branch application. The first stems from the manner in which the FDIC approved and then later denied the Bank's application. On September 27, 1990, the Regional Director of the FDIC notified the Bank that its application had been

approved subject to the following condition:
That until such time as the branch is established, the Corporation shall have the right to alter, suspend, or withdraw its approval should any interim development be deemed to warrant such action.

 Joint Ex. 4. On October 31, 1990, the Regional Director again wrote to the Bank. In the letter, the Regional Director noted that his previous approval of the branch application had been expressly conditional. The letter went on to state:

Preliminary results of [an examination of the Bank conducted October 1, 1990] reveal adverse trends in capital, assets, management, and earnings which have left the bank in an unsound condition.
. . . .
As a result of the bank's deteriorated condition and your inability to fulfill promises of improved conditions made at prior examinations, I am withdrawing approval of the branch application and have forwarded to our Washington office a formal recommendation for denial of the application based upon the condition of the bank as we now know it. It is fully recognized that this decision will undoubtedly be a difficult one for the bank; ...

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