Opinion ID: 501705
Heading Depth: 2
Heading Rank: 5

Heading: Security Pacific's Claims

Text: 108 Security Pacific proposed in its application that its subsidiary engage in bank-ineligible securities activities constituting up to 15 percent of the subsidiary's gross revenues. The Board approved a lower level of up to five percent of gross revenues, consistent with its orders approving the other subsidiaries' activities. Security Pacific argues that the Board abused its discretion in setting the lower limitation and by failing to adopt a case-by-case approach to determining appropriate levels of Sec. 20 activity. 109 The gravamen of Security Pacific's argument is that its subsidiary should not be equated with the other bank holding company subsidiaries, all of which are based in New York. Security Pacific is located in California. The New York subsidiaries, Security Pacific argues, will be able to engage in a higher level of bank-eligible activities and, consequently, a higher level of bank-ineligible activities, since bank-ineligible activity levels correspond directly with the total securities activity of the subsidiary. Security Pacific claims that this mandates allowing a higher level of activity for its subsidiary. 110 We disagree. Section 20 must be read to set down at some point a hard and fast limit on the amount of bank-ineligible securities activity, and we have determined that the Board's limit of five to ten percent of the gross revenue is reasonable. Beyond this limit, there is no room for adjustment in order to ameliorate competitive inequality. 111 Within the range set by the Board there is, of course, leeway for adjustments that reflect the competitive positions of certain subsidiaries. Security Pacific declined to submit evidence of special circumstances that might distinguish it from the other affiliates involved and warrant approval of a level of bank-ineligible activity greater than five percent. Given this failure, the Board's approval of a five percent level for Security Pacific was not an abuse of its discretion. 112 Security Pacific also argues that the Board's limitations are inconsistent with Board precedent holding that quantitative measures should be determined on a case-by-case basis. As noted above, Sec. 20 sets down a line that cannot be crossed no matter how exceptional the circumstances, and it cannot be drawn differently in each case.