State of Idaho ex rel. Robson v. First Security Bank of Idaho

• Decision Date: 22 April 1970
• Docket Number: 1-69-101.,Civ. No. 1-69-83
• Parties: STATE OF IDAHO ex rel. Robert M. ROBSON, Attorney General, and John D. Silva, Commissioner of Finance, Plaintiff, v. FIRST SECURITY BANK OF IDAHO, National Association, and William B. Camp, Comptroller of the Currency of the United States, Defendants. STATE OF IDAHO ex rel. Robert M. ROBSON, Attorney General, and John D. Silva, Commissioner of Finance, Plaintiff, v. The IDAHO FIRST NATIONAL BANK, and William B. Camp, Comptroller of the Currency of the United States, Defendants.
• Court: U.S. District Court — District of Idaho

315 F. Supp. 274

STATE OF IDAHO ex rel. Robert M. ROBSON, Attorney General, and John D. Silva, Commissioner of Finance, Plaintiff, v. FIRST SECURITY BANK OF IDAHO, National Association, and William B. Camp, Comptroller of the Currency of the United States, Defendants.

STATE OF IDAHO ex rel. Robert M. ROBSON, Attorney General, and John D. Silva, Commissioner of Finance, Plaintiff, v. The IDAHO FIRST NATIONAL BANK, and William B. Camp, Comptroller of the Currency of the United States, Defendants.

Civ. Nos. 1-69-83, 1-69-101.

United States District Court, D. Idaho, S. D.

April 22, 1970.

Robert M. Robson, Atty. Gen. of Idaho, Richard Greener, and Stewart A. Morris, Asst. Attys. Gen., Boise, Idaho, for plaintiff.

Paul B. Ennis, of Hawley, Troxell, Ennis & Hawley, Boise, Idaho, C. Preston Allen, of Ray, Quinney & Nebeker, Salt Lake City, Utah, for defendant First Security Bank of Idaho, N.A.

Willis E. Sullivan, of Langroise, Clark, Sullivan & Smylie, Boise, Idaho, for defendant Idaho First National Bank.

C. Westbrook Murphy, Office of the Comptroller of the Currency, Washington, D. C., Sherman F. Furey, Jr., U. S. Atty., D. Idaho, William D. Ruckleshaus, Asst. Atty. Gen., Harland F. Leathers, and A. James Barnes, Attys., Dept. of Justice, Washington, D. C., for defendant William B. Camp, Comptroller of the Currency.

Calvin Davison, James F. Bell, Peter B. Work, of Reavis, Pogue, Neal & Rose, Washington, D. C., John L. Runft, of Eberle, Berlin, Morgan, Kading & Turnbow, Boise, Idaho, of counsel, for National Association of Supervisors of State Banks, amicus curiae.

MEMORANDUM OF OPINION AND ORDER

FRED M. TAYLOR, Chief Judge.

The plaintiff State of Idaho brought these actions on the relation of its Attorney General and of its Commissioner of Finance, seeking a declaratory judgment of this court that an administrative ruling by the defendant Comptroller (Comptroller's Manual for National Banks, ¶ 7310) is contrary to federal and state law, and that activities undertaken by the defendant national banks under color of the authority provided by the Comptroller's ruling are similarly unlawful. The plaintiff also seeks an injunction prohibiting such authorization and enforcement thereof by the Comptroller, and further prohibiting the defendant banks from acting under the authority of that ruling.

The defendants in each action have moved to dismiss plaintiff's amended complaints on the grounds that the plaintiff lacks standing to maintain the suit; that the amended complaints present no justiciable case or controversy; and that this court lacks jurisdiction over the subject matter. In addition, the defendant Idaho First National Bank has moved to dismiss the complaint on the ground that it fails to state a claim upon which relief can be granted.

The plaintiff alleges that Title 12 U. S.C. § 85 limits a national bank to that rate of interest allowed a state bank for a specific type of loan in the state in which the national bank is doing business. That section provides in part:

"Any association may take, receive, reserve and charge on any loan or discount made, * * * interest at the rate allowed by the laws of the state, * * * where the bank is located, * * * and no more, except that where by the laws of any state a different rate is limited for banks organized under state laws, the rate so limited shall be allowed for associations organized or existing in any such state under this chapter."

The plaintiff also alleges, inter alia, that the maximum interest that may be charged on installment loans is six per cent (6%) discount per annum, which constitutes an annual effective rate of eleven and one-half per cent (11½%); that the defendant banks have initiated programs of financing consumer purchases through credit cards issued and sponsored by the banks; that the banks are presently contracting with citizens of the State of Idaho for the issuance and use of these credit cards; and that the defendant banks are presently exacting an interest rate of one and one-half per cent (½%) per month, or an effective annual rate of eighteen per cent (18%), from bank customers using these credit cards.

The plaintiff alleges that the defendant banks justify the charging of this higher interest rate on the authority of the Comptroller's ruling to the effect that a national bank may charge any rate of interest allowed to any lender under the laws of the state; that the Comptroller included in such ruling the statement that a national bank might lawfully charge that rate of interest allowed a small loan company. The plaintiff contends that the ruling of the Comptroller is contrary to state and federal law, and that the consequent unlawful exaction of interest by the defendant banks will cause great and irreparable damage to the state banking system, to the dual banking system within the state, and to the citizens of the State of Idaho. It is in this posture of the pleadings that the court must test the sufficiency of the complaints to establish the plaintiff's standing to maintain the suit, and to establish the existence of a justiciable controversy over which this court may exercise jurisdiction.

The question of standing to maintain the suit is controlled by the recent guidelines enunciated by the Supreme Court of the United States in Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970). The Court there established, 397 U.S. 150, 90 S.Ct. at 829, 830, that in order to have standing to maintain a suit, the plaintiff must allege "that the challenged action has caused him injury in fact, economic or otherwise", and must further allege that the interest which he seeks to protect is "arguably within the zone of interests to be protected or regulated by the statute * * * in question". The statute in this case is 12 U. S.C. § 85.

It is the opinion of this court that the amended complaint in each case fails to meet the requirement of alleging an injury in fact. The complaints allege only a threatened injury to the citizens of the State of Idaho, to the dual banking system of state and national banks operating within the state, and to the state banking system generally. The complaints do not allege any injury, economic or otherwise, to the Commissioner or to the Attorney General in either their individual or official capacities. The plaintiff argues that the allegation of injury to the state banking system implies an injury to the Commissioner of Finance, who is charged by statute with the execution of the State's banking laws. To give effect to the plaintiff's contention would require this court to infer facts not pleaded. The complaints not only fail to delineate the nature of the injuries which have been or will be suffered, but further fail to designate those elements of the "state banking system" adversely affected thereby. Certainly it is far too broad an inference for this court to determine that all the various entities which comprise the state banking system have parallel and equivalent interests which will suffer...