State ex rel. Colorado State Banking Bd. v. Resolution Trust Corp.

• Citation: 926 F.2d 931
• Decision Date: 11 February 1991
• Docket Number: 90-1279 and 90-2107,Nos. 90-1276,s. 90-1276
• Parties: STATE OF COLORADO, ex rel. COLORADO STATE BANKING BOARD; Independent Bankers of Colorado, a non-profit corporation, Plaintiffs-Appellees, v. RESOLUTION TRUST CORPORATION, an agency of the United States; 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-Appellants. CONFERENCE OF STATE BANK SUPERVISORS; Independent Bankers Association of America, Amicus Curiae. State of Colorado, ex rel. Colorado State Banking Board; Independent Bankers of Colorado, a non-profit corporation, Plaintiffs-Appellees, v. RESOLUTION TRUST CORPORATION, an agency of the United States; Federal Deposit Insurance Corporation, an agency of the United States, Defendants, and Robert L. Clarke, in his official capacity as the Comptroller of the currency of the United States, Defendant-Appellant. Conference of State Bank Supervisors; Independent Bankers Association of America, Amicus Curiae. INDEPENDENT COMMUNITY BANKERS ASSOCIATION OF NEW MEXICO, a non-profit New Mexico corporation; Plaintiff-Appellant, The State of New Mexico, the Financial Institutions Division, Plaintiff-Intervenor-Appellant, v. RESOLUTION TRUST CORPORATION, an agency of the United States; Federal Deposit Insurance Corporation, an agency of the United States and; Robert L. Clarke, in official capacity as Comptroller of the currency of the United States, Defendants-Appellees. State of Colorado; Independent Bankers of Colorado, a Colorado non-profit corporation; Conference of State Bank Supervisors; Independent Bankers Association of America, Amicus Curiae.
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)

Page 931

926 F.2d 931

59 USLW 2497

STATE OF COLORADO, ex rel. COLORADO STATE BANKING BOARD;

Independent Bankers of Colorado, a non-profit

corporation, Plaintiffs-Appellees, v. RESOLUTION TRUST CORPORATION, an agency of the United

States; 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-Appellants.

CONFERENCE OF STATE BANK SUPERVISORS; Independent Bankers

Association of America, Amicus Curiae.

State of Colorado, ex rel. Colorado State Banking Board;

Independent Bankers of Colorado, a non-profit

corporation, Plaintiffs-Appellees, v. RESOLUTION TRUST CORPORATION, an agency of the United

States; Federal Deposit Insurance Corporation, an

agency of the United States, Defendants,

and

Robert L. Clarke, in his official capacity as the

Comptroller of the currency of the United States,

Defendant-Appellant.

Conference of State Bank Supervisors; Independent Bankers

Association of America, Amicus Curiae.

INDEPENDENT COMMUNITY BANKERS ASSOCIATION OF NEW MEXICO, a

non-profit New Mexico corporation; Plaintiff-Appellant,

The State of New Mexico, the Financial Institutions

Division, Plaintiff-Intervenor-Appellant, v. RESOLUTION TRUST CORPORATION, an agency of the United

States; Federal Deposit Insurance Corporation, an agency of

the United States and; Robert L. Clarke, in official

capacity as Comptroller of the currency of the United

States, Defendants-Appellees.

State of Colorado; Independent Bankers of Colorado, a

Colorado non-profit corporation; Conference of

State Bank Supervisors; Independent

Bankers Association of

America, Amicus Curiae.

Nos. 90-1276, 90-1279 and 90-2107.

United States Court of Appeals Tenth Circuit.

Feb. 11, 1991.

Rehearing Denied March 25, 1991.

Ann Southworth, Dept. of Justice, Washington, D.C. (L. Robert Griffin, Director, Litigation Division and Caren S. Hersh, Atty., Office of the Comptroller of the Currency, Washington, D.C., of counsel, Stuart M. Gerson, Asst. Atty. Gen., William L. Lutz, Michael J. Norton, U.S. Attys., and Douglas N. Letter, Dept. of Justice, Washington, D.C., with her on the briefs), for Comptroller of the Currency of the U.S.

Dorothy L. Nichols, Associate Gen. Counsel, Federal Deposit Ins. Corp., Washington, D.C. (Alfred J.T. Byrne, Gen. Counsel, Ann S. DuRoss, Asst. Gen. Counsel, and Thomas D. Holzman, Federal Deposit Ins. Corp., Washington, D.C., John H. Bernstein and Diana C. Fields, Kutak Rock & Campbell, Denver, Colo., Michael E. Tucci, Sr. Counsel and Robert A. Ward, Counsel, Resolution Trust Corp., Denver, Colo., with her on the briefs), for The Resolution Trust Corp. and the Federal Deposit Ins. Corp.

I. Thomas Bieging, McKenna & Cuneo, Denver, Colo. (Stephen B. Shapiro, McKenna & Cuneo, Denver, Colo., Barbara M.A. Walker, First Asst. Atty. Gen. and Sherrie D. Vincent, Asst. Atty. Gen. for the Atty. Gen. Regulatory Law Section, Denver, Colo., with him on the briefs), for Independent Bankers of Colorado and State of Colorado, ex rel. Colorado State Banking Bd.

Leonard J. Rubin, Bracewell & Patterson, Washington, D.C. (Virginia E. O'Neill and Ellen C. Starr, Bracewell & Patterson, Washington, D.C., for Independent Community Bankers Ass'n of New Mexico, G.T.S. Khalsa and Jonathan L. Barela, Office of the Atty. Gen., Santa Fe, N.M., for State of N.M., Financial Institutions Div., with him on the briefs).

Before ANDERSON, BALDOCK, and EBEL, Circuit Judges.

STEPHEN H. ANDERSON, Circuit Judge.

This appeal consists of two cases challenging a Resolution Trust Corporation ("RTC") regulation, 55 Fed.Reg. 22,323 (1990) (to be codified at 12 C.F.R. Sec. 1611.1) (the "Override Regulation"), allowing banks that acquire failed or failing savings and loan associations ("thrifts") to operate the thrifts' offices ¹ as bank branches, notwithstanding state laws that would prohibit the acquiring bank from operating such branches. We are confronted with a split between two district courts within the Circuit. The State and Independent Community Bankers of New Mexico appeal a New Mexico district court order upholding the Override Regulation as a valid exercise of the RTC's statutory rulemaking authority. The RTC appeals a Colorado district court order holding that the Override Regulation is void and contrary to the authorizing statute. We respectively affirm and reverse.

BACKGROUND

In response to the savings and loan crisis, Congress enacted the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA"). Pub.L. No. 101-73, 103 Stat. 183 (1989). In FIRREA, Congress created the RTC and granted it the same conservatorship, receivership, and assistance powers and duties the FDIC possesses. 12 U.S.C. Sec. 1441a(b)(4). ² Congress also granted the RTC broad authority to "issue such rules, regulations, standards, policies, procedures, guidelines, and statements" as it "considers necessary or appropriate to carry out" its statutory purpose. 12 U.S.C. Sec. 1441a(b)(12)(A). That purpose, simply put, is to "contain, manage, and resolve failed savings associations." FIRREA Sec. 101(7), 103 Stat. at 187. FIRREA instructs the RTC to accomplish this objective "in a manner which maximizes the net present value return from the sale or other disposition of [failed] institutions," and "minimizes the amount of any loss realized in the resolution of cases." 12 U.S.C. Sec. 1441a(b)(3)(C)(i), (iv).

Relying upon this instruction, and the language of 12 U.S.C. Sec. 1823(k), the RTC has interpreted FIRREA as authorizing it to override state branch banking laws preventing banks that acquired failed or failing thrifts in emergency acquisitions under FIRREA to retain and operate the thrifts' offices as bank branches. The RTC published a notice of its intent to adopt a rule (the Override Regulation) formalizing this statutory authorization. 55 Fed.Reg. 13,543 (proposed April 11, 1990). After considering comments, the RTC Board of Directors adopted the Override Regulation, which was published in the Federal Register as a final rule, effective June 1, 1990.

The Override Regulation provides, in pertinent part:

Sec. 1611.1 Retention of thrift branches acquired by banks

(a) Purpose. (1) Section 13(k) of the Federal Deposit Insurance Act (12 U.S.C. 1823(k)) ... grants to the RTC the power to authorize emergency acquisitions of failed or failing savings associations. Under section 13(k), the RTC may authorize such acquisitions notwithstanding any provision of State law, upon making a determination that severe financial conditions threaten the stability of a significant number of savings associations, or savings associations possessing significant financial resources, and a determination that such authorization would lessen the risk to the RTC. Authorizations of acquisitions of State-chartered savings associations are subject to prior RTC consultation with State officials and a vote of 75 percent of the voting members of the RTC Board of Directors to authorize such acquisitions over objection of State officials.

(2) The regulations of this section provide for the retention and operation by acquiring banks of the offices of savings associations acquired pursuant to section 13(k).

(b) Each existing office or other existing facility of each savings association that is merged or consolidated with, or the assets and liabilities of which are transferred to, an insured bank pursuant to section 13(k) may be retained by the insured bank and operated by the bank as a branch or other facility.

55 Fed.Reg. 22,323 (1990) (to be codified at 12 C.F.R. Sec. 1611.1).

On May 24, 1990, First National Bank in Albuquerque ("First National") submitted a bid to purchase certain assets and liabilities of New Mexico Federal, a failed thrift in RTC conservatorship, including New Mexico Federal's main office in Albuquerque and its branch offices in Santa Fe, Taos, and Espanola. First National's bid was expressly contingent upon RTC override of New Mexico state branch banking law, which would not permit First National to operate branches at the locations of New Mexico Federal's offices. ³ On May 30, 1990, the RTC notified New Mexico of its intent to override New Mexico's branch banking laws pursuant to its proposed acceptance of First National's bid.

On June 1, 1990, the Independent Community Bankers of New Mexico ⁴ filed suit against the RTC, the Federal Deposit Insurance Corporation ("FDIC"), ⁵ and the Comptroller of the Currency ("Comptroller"), ⁶ challenging the legality of the Override Regulation and its application in New Mexico. On the same day, the Financial Institutions Division of the State of New Mexico ⁷ intervened as a plaintiff. On June 5, 1990, the Board of Directors of the RTC unanimously approved First National's bid for New Mexico Federal and authorized the override of New Mexico branch banking law. The State and Community Bankers of New Mexico filed motions for a temporary restraining order and preliminary injunction. The RTC, FDIC, and Comptroller moved to dismiss the complaint for failure to state a claim upon which relief could be granted. The district court heard argument on the motions and on June 15, 1990, dismissed the complaint and held that the Override Regulation is a "reasonable, permissible, and plausible" interpretation of FIRREA. R.Vol. I, Tab 39, at 14.

Before the Override Regulation was adopted, a similar RTC transaction was challenged in Colorado. In December, 1989, or January, 1990, Mesa National Bank ("Mesa National") submitted a bid for Valley Federal Savings & Loan Association ("Valley") and Mesa Federal Savings & Loan Association ("Mesa Federal"), both in RTC conservatorship. Mesa National bid $675,000, contingent on retaining and operating the former thrift offices as a bank office and branches, which was not permitted by Colorado Law. ⁸ The RTC approved Mesa National's proposal in January, 1990. The State ⁹ and Independent Bankers of...