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    F. W. Pitts v. William B. Camp, Comptroller of The Currency of The United States, 463 F.2d 632, 4th Cir. (1972)

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    This document is a court case summary regarding an application for a new national bank that was denied by the Comptroller of the Currency. The applicants sued, arguing the Comptroller failed to state the grounds for the denial and that the decision was arbitrary. The court found that the Comptroller did not adequately explain his reasoning for finding a lack of "need" and remanded the case back to the district court for a new trial, rather than back to the Comptroller, so the applicants could present evidence in support of their application.

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    F. W. Pitts v. William B. Camp, Comptroller of The Currency of The United States, 463 F.2d 632, 4th Cir. (1972)

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    This document is a court case summary regarding an application for a new national bank that was denied by the Comptroller of the Currency. The applicants sued, arguing the Comptroller failed to state the grounds for the denial and that the decision was arbitrary. The court found that the Comptroller did not adequately explain his reasoning for finding a lack of "need" and remanded the case back to the district court for a new trial, rather than back to the Comptroller, so the applicants could present evidence in support of their application.

    Original Description:

    Filed: 1972-08-30 Precedential Status: Precedential Citations: 463 F.2d 632 Docket: 71-1965

    Original Title

    F. W. Pitts v. William B. Camp, Comptroller of the Currency of the United States, 463 F.2d 632, 4th Cir. (1972)

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    This document is a court case summary regarding an application for a new national bank that was denied by the Comptroller of the Currency. The applicants sued, arguing the Comptroller failed to state the grounds for the denial and that the decision was arbitrary. The court found that the Comptroller did not adequately explain his reasoning for finding a lack of "need" and remanded the case back to the district court for a new trial, rather than back to the Comptroller, so the applicants could present evidence in support of their application.

    Copyright:

    Public Domain
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    22 views4 pages

    F. W. Pitts v. William B. Camp, Comptroller of The Currency of The United States, 463 F.2d 632, 4th Cir. (1972)

    Uploaded by

    Scribd Government Docs
    This document is a court case summary regarding an application for a new national bank that was denied by the Comptroller of the Currency. The applicants sued, arguing the Comptroller failed to state the grounds for the denial and that the decision was arbitrary. The court found that the Comptroller did not adequately explain his reasoning for finding a lack of "need" and remanded the case back to the district court for a new trial, rather than back to the Comptroller, so the applicants could present evidence in support of their application.

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    of 4

    463 F.

    2d 632

    F. W. PITTS et al., Appellants,


    v.
    William B. CAMP, Comptroller of the Currency of the United
    States, Appellee.
    No. 71-1965.

    United States Court of Appeals,


    Fourth Circuit.
    Argued March 7, 1972.
    Decided June 28, 1972.
    Rehearing Denied Aug. 30, 1972.

    Benny R. Greer, Darlington, S. C. (Greer & Chandler, Darlington, S. C.,


    on brief) for appellants.
    Walter H. Fleischer, Atty., Dept. of Justice (L. Patrick Gray, III, Asst.
    Atty. Gen., Stanton R. Koppel and Robert E. Kopp, Attys., Dept. of
    Justice, and John K. Grisso, U. S. Atty., and Wistar D. Stuckey, Asst. U.
    S. Atty., on brief), for appellee.
    Before BRYAN, BUTZNER and FIELD, Circuit Judges.
    ALBERT V. BRYAN, Circuit Judge:

    An application for the organization of The First National Bank of Hartsville,


    South Carolina, was filed by F. W. Pitts and others with the Comptroller of the
    Currency in August 1967, under the provisions of the laws of the United States,
    12 U.S.C. Secs. 21-27.1 The request was rejected originally on April 15, 1968,
    and upon reconsideration on July 29, 1969. The soul of the Comptroller's
    decision was that "we were unable to reach a favorable conclusion as to the
    need factor". (Accent added.) The determination was stated in letters from the
    Comptroller to the applicants' attorney.

    Concededly, the application complied with all of the statute's essentials. On that
    basis, suit was brought in the District Court to compel the Comptroller to grant

    the bank charter. No evidence was taken, decision going for the Comptroller on
    his motion, with affidavits, for summary judgment. Appealing, the applicants
    attack the denial on the ground that no hearing was granted them by the
    Comptroller prior to his decision. Also, it is averred that his action was
    arbitrary and capricious, wholly without supporting proof. Lastly, the
    appellants assert that the need for a new bank is a factor beyond the
    Comptroller's scope of consideration.
    3

    The District Judge upheld the Comptroller, although he was doubtful that the
    statute "commits the determination of * * * need to the Comptroller's
    discretion". However, he was persuaded by the "long and continued practice of
    the Comptroller of considering the need of the community". Continuing he
    said, "Although acknowledging that the plaintiffs presented a convincing case
    in favor of establishment of their bank, the court cannot say that the conclusion
    of the Comptroller is not adequately supported under the substantial evidence
    rule."

    It is unnecessary, we think, to discuss the separate assignments of error ascribed


    by the appellants to the District Court. This is because in itself the ruling of the
    Comptroller is unacceptable. It does not comply with the bare, fundamental
    principle of agency decision: that its basis must be stated. FTC v. Sperry &
    Hutchinson Co., 405 U.S. 233, 92 S.Ct. 898, 31 L.Ed.2d 170 (1972). Sperry
    reiterated the precept of SEC v. Chenery Corp., 318 U.S. 80, 94, 63 S.Ct. 454,
    87 L.Ed. 626 (1943), that "[t]he orderly functioning of the process of review
    requires that the grounds upon which the administrative agency acted be clearly
    disclosed . . . ." 405 U.S. at 249, 92 S.Ct. at 907. Indeed, the review of the
    agency action, and relief from any error therein, assured by sections 10(a), (b),
    and (e) (B) of the Administrative Procedure Act, 5 U.S.C. Secs. 702, 703 and
    706(2), would be impossible without a statement of such grounds. That the
    judicial review provisions of the Act apply to the Comptroller is unmistakably
    written in Association of Data Processing Service Organizations, Inc. v. Camp,
    397 U.S. 150, 156-157, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970).

    Even a cursory reading of the Comptroller's pronouncement here exposes his


    failure to observe the insistence of the law that the ground of determination be
    avowed. To begin with, the first word of the charter's denial appears in this
    brief letter to plaintiffs' counsel:

    6"Dear Mr. Herring:


    7
    "This
    will confirm our telegram of today's date regarding the application submitted
    by you and your associates to organize a National Bank at Hartsville, South

    Carolina.
    8 the basis of information developed by our Field Investigation, together with all
    "On
    other pertinent data relating to the proposal, we have concluded that the factors in
    support of the establishment of a new National Bank in this area are not favorable.
    9"We regret to inform you that the application has been disapproved."
    10

    The Comptroller's response to the request for reconsideration of his initial


    ruling was likewise embraced in a letter:

    11 have carefully considered the various material developed in connection with the
    "We
    reconsideration of an application for a new National Bank at Hartsville, South
    Carolina, filed by you and your associates. This review included all of the material
    submitted by you at various times since the disapproval of the application in April of
    1968, as well as the material developed during the course of the most recent field
    investigation by a National Bank Examiner.
    12 and the members of the group would be less than human not to feel strongly
    "You
    on this question which is of such importance to you. On each application we
    endeavor to develop the need and convenience factors in conjunction with all other
    banking factors and in this case we were unable to reach a favorable conclusion as to
    the need factor. The record reflects that this market area is now served by the
    Peoples Bank with deposits of $7.2MM, The Bank of Hartsville with deposits of
    $12.8MM, The First Federal Savings and Loan Association with deposits of
    $5.4MM, The Mutual Savings and Loan Association with deposits of $8.2MM and
    the Sonoco Employees Credit Union with deposits of $6.5MM. The aforementioned
    are as of December 31, 1968.
    13 was a difficult case and you and your associates certainly presented your side of
    "It
    the case with fairness and diligence. We are unable to find any basis to change the
    decision as rendered. All we can say to you is that we did give this matter the most
    meticulous consideration and reached a conclusion contrary to what you had
    sought."
    14

    Assuming that "need" is a factor to be considered in chartering a bank,


    obviously the Comptroller did not explain what was embraced in that concept.
    Questions immediately arising are, for example, whether the need is that of
    corporate or individual borrowers, local or non-resident depositors, mercantile
    or development capital, or the creation of desirable competition. Reasonably
    imaginable are other areas of pertinent consideration, untouched in the
    Comptroller's communications. Thus upon review, we cannot distinguish what
    specific factors were considered by the Comptroller, nor whether in denying

    the application he acted within permissible bounds of discretion.


    15

    Consequently we must vacate the judgment of the District Court. Since the
    Comptroller has twice inadequately and inarticulately resolved the appellants'
    presentation, we remand the cause for a trial de novo before the District Court
    rather than to the Comptroller for further consideration. The charter aspirants
    will open the trial with proof of their application and compliance with the
    statutory inquiries, and proffer of any other relevant evidence. Testimony may
    then be adduced by the Comptroller or intervenors manifesting opposition, if
    any, to the new bank. Thereupon the District Judge will determine, upon a
    statement of his findings of fact and conclusions of law, whether the appellants
    have shown by a preponderance of evidence that the Comptroller's ruling is
    capricious or an abuse of discretion. First Nat'l Bank of Smithfield, North
    Carolina v. Saxon, 352 F.2d 267, 271-272 (4 Cir. 1965).

    16

    Vacated and Remanded.

    ORDER DENYING REHEARING


    17

    Upon consideration of the petition of the appellee, William B. Camp,


    Comptroller of the Currency, of the United States, for a rehearing by the
    original panel of the court and a rehearing en banc, and the panel being of the
    opinion to deny a rehearing and no judge of the court requesting an en banc
    rehearing, it is

    18

    Ordered that the said petition be, and it is hereby, denied.

    It is to be noted that this case involves the original establishment of a national


    bank, and not a question of allowing the creation of a branch to an existing
    institution. The latter is covered by 12 U.S.C. Sec. 36(c) and is the subject of
    the more frequent precedents, such for example as First-Citizens Bank & Trust
    Co. v. Camp, 409 F.2d 1086 (4 Cir. 1969)

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