ARKANSAS STATE BANK COM'R v. Resolution Trust Corp.
| Decision Date | 09 July 1990 |
| Docket Number | No. LR-C-90-124.,LR-C-90-124. |
| Citation | 745 F. Supp. 550 |
| Parties | ARKANSAS STATE BANK COMMISSIONER, Plaintiff, v. The RESOLUTION TRUST CORPORATION, an agency of the United States; The Federal Deposit Insurance Corporation, an agency of the United States; and Robert L. Clarke, in his official capacity as the Comptroller of the Currency of the United States, Defendants, Arkansas Independent Bankers Association, A Non-Profit Arkansas Corporation; and Worthen Bank & Trust Company, N.A., Intervenors. |
| Court | U.S. District Court — Eastern District of Arkansas |
Jeanette Denhammcclendon, Atty. Gen's. Office, Little Rock, Ark., for plaintiff.
Harry Light, Friday, Eldredge & Clark, Little Rock, Ark., Michael Tucci, Washington, D.C., Patrick C. Harris, U.S. Atty's. Office, Little Rock, Ark., Mark L. Leemon, Office of Comptroller of the Currency, Washington, D.C., for defendants.
David M. Hargis, Little Rock, Ark., Leonard J. Rubin, Bracewell and Patterson, Washington, D.C., Hermann Ivester, Ivester, Skinner & Camp, Little Rock, Ark., for intervenors.
Plaintiff, Arkansas State Bank Commissioner, brings this action for declaratory and injunctive relief against the Resolution Trust Corporation, the Federal Deposit Insurance Corporation, and Robert L. Clarke in his official capacity as the Comptroller of the Currency. Relief is requested pursuant to 12 U.S.C. § 36(c); 12 U.S.C. § 1823(k) of the Financial Institutional Reform, Recovery, and Enforcement Act of 1989 (hereinafter "FIRREA"); 28 U.S.C. §§ 2201 and 2202; and 5 U.S.C. §§ 701 and 706. This Court has jurisdiction under 28 U.S.C. §§ 1331 and 1346; and 5 U.S.C. §§ 702, 703, and 704.
Plaintiff, Arkansas State Bank Commissioner (hereinafter "Commissioner"), is charged with the execution of all laws passed by the State of Arkansas relating to the organization, inspection, supervision, control, liquidation, and dissolution of banks, bank holding companies, trust companies, industrial loan institutions, finance companies, and the banking business of Arkansas, as stated in Ark.Code Ann. § 23-31-205 (1987 & Supp.1989). In addition, the Commissioner has the power to make such rules and regulations as may be necessary to carry out the intent and purposes of all Arkansas laws and to issue cease and desist orders to any state bank, trust company, or other financial institution under his jurisdiction found to be violating the banking laws of this state or the rules and regulations promulgated by him. See Ark.Code Ann. § 23-31-205(b) (Supp. 1989).
Intervenor-plaintiff, Arkansas Independent Bankers Association (hereinafter "Independent Bankers"), is an Arkansas non-profit, incorporated association, representing 196 commercial banks with home offices in the State of Arkansas. Independent Bankers brings this action for declaratory and injunctive relief on behalf of its members who have been, or will be, injured by the defendants' alleged unlawful acts.
Defendant Resolution Trust Corporation (hereinafter "RTC") was established by Section 501 of FIRREA, 103 Stat. 369 (1989). In pertinent part, Section 501 provides that the RTC is an instrumentality and agency of the United States, exclusively managed by the Federal Deposit Insurance Corporation. One of the purposes of FIRREA was to establish the RTC to contain, manage, and resolve failed savings associations. See 103 Stat. 187 (1989). One of the duties of the RTC is to carry out a program to manage and resolve all cases involving depository institutions, the accounts of which were insured by the Federal Savings and Loan Insurance Corporation before the enactment of FIRREA, and for which a conservator or receiver has been or may be appointed. See 12 U.S.C. § 1441a(b)(3) (Supp.1990). The RTC, in conducting its operations, is directed, among other things, to maximize the next present value return from the sale or other disposition of the depository institution, and to minimize the impact of such transaction on local financial markets.
Defendant Federal Deposit Insurance Corporation (hereinafter "FDIC") is an agency of the United States created under 12 U.S.C. § 1811, with the powers granted it under 12 U.S.C. §§ 1811-1833e.
Defendant Robert L. Clarke is the Comptroller of the Currency of the United States (hereinafter "Comptroller") and is the chief officer of the Bureau of the Department of Treasury known as the Office of the Comptroller of the Currency. See 12 U.S.C. § 1 (1989). The Comptroller is charged by law with the administration of the National Bank Act, 12 U.S.C. § 21 (1989), and his responsibilities include the chartering of national banking institutions and the approval of applications from national banking associations for permission to establish branch banking offices.
Intervenor Worthen Bank and Trust Company, N.A. (hereinafter "Worthen") is a national banking association organized under the laws of the United States with its principal place of business in Little Rock, Pulaski County, Arkansas.
The relevant facts in this case are not in dispute. On February 13, 1990, the RTC held an instructional bid meeting in Little Rock, Arkansas to provide potential purchasers of failed savings and loan associations in Arkansas with information about two savings and loan associations to be offered for sale by the RTC. During its presentation, an RTC representative explained the RTC's position that Section 217(k) of FIRREA, 12 U.S.C. § 1823(k) (1989), authorizes the RTC to preempt Arkansas' restrictions on branch banking by an acquiring bank.1
On February 15, 1990, the RTC informed the Commissioner that the RTC would be willing to institute a declaratory action in order to proceed with the sale of failed savings and loan associations to state-chartered or national banks in Arkansas contrary to Arkansas' laws restricting branching by banks. On February 21, 1990, the RTC advised the Commissioner that another bid meeting was scheduled for February 27, 1990. In an attempt to enjoin the threatened override of Arkansas law, the State Bank Commissioner, on February 23, 1990, filed a verified motion for emergency declaratory relief and for temporary restraining order and a motion for preliminary injunction. The Court conducted a hearing on the motion for temporary restraining order on February 26, 1990, and denied the motion without prejudice to plaintiff's right to renew. The Court received the assurances of defendants that plaintiff would be given forty-eight (48) business hours actual notice of any bids submitted that attempted to override state branch banking laws. The RTC then cancelled the meeting scheduled for February 27, 1990. Thereafter, the Commissioner withdrew its motion for preliminary injunction, and Independent Bankers moved, and was granted the right, to intervene in this action on April 26, 1990.
On June 8, 1990, the RTC held another bid meeting in Little Rock, Arkansas to provide potential purchasers with information about savings and loan associations in Arkansas to be offered for sale by the RTC, including Independence Federal Bank, F.S.B. (hereinafter "Independence").
On or about June 21, 1990, Worthen submitted a bid for certain assets and liabilities, as well as twenty branch offices of Independence. On June 26, 1990, the RTC notified the Commissioner of its intent to override Arkansas' branch banking laws. Worthen's bid was expressly contingent on the RTC's grant of a state law override permitting it to operate Independence's twenty branch offices, located in fifteen counties throughout Arkansas, as branches of Worthen.
Upon receipt of notice of the RTC's intent to override Arkansas law, the Commissioner and Independent Bankers each filed motions for a temporary restraining order and preliminary injunction. In conjunction with the motions for preliminary injunction, the Commissioner and Independent Bankers also requested the Court to consolidate the hearing on the preliminary injunction with a trial on the merits, which request the Court granted.
Worthen filed a complaint in intervention and a response to the motions for preliminary injunction and declaratory relief. RTC filed a response to the motions for preliminary injunction and declaratory relief and a motion to dismiss the complaints of the Commissioner and Independent Bankers. FDIC and the Comptroller also filed motions to dismiss the complaints filed by the Commissioner and Independent Bankers.
In response to several challenges to the RTC's efforts to override state law pursuant to 12 U.S.C. § 1823(k), on May 24, 1990, the RTC adopted the "Retention of Thrift Branches Acquired by Banks in Emergency Acquisitions" Rule, effective June 1, 1990 (hereinafter "Override Rule"). See 55 Fed. Reg. 22,323 (1990) ().2 The RTC derives what authority it has to make and enforce its Override Rule from 12 U.S.C. § 1823(k)(1)(A)(i) (hereinafter "Section (k)(1)") which provides as follows:
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