Opinion ID: 764169
Heading Depth: 3
Heading Rank: 3

Heading: Merger Application

Text: 15
16
17 (c) Establish the location in South Bend, formerly the main office of Society-N.A., Indiana, as a branch. 18 KeyCorp's master plan also involved a subsequent relocation of the Angola, Indiana, main office from Angola, Indiana, to Bryan, Ohio, about 25 miles away. 5 Through that relocation and other mergers, KeyCorp sought to own and operate a three-state midwestern regional bank with its headquarters in Cleveland, Ohio, and over 420 branches. For purposes of this appeal, we consider only the three applications outlined above. 19 On October 31, 1995, the Assistant Vice-President and General Counsel of Society-Michigan sent a letter to the Commissioner of the Michigan Financial Institutions Bureau, Patrick McQueen (Commissioner), which basically outlined the company's intentions that had been discussed at an earlier meeting between Commissioner McQueen and representatives of Society-Michigan. 6 The letter indicated that Society-Michigan believed that the mergers could not take place before June 1, 1997, unless Indiana and Ohio enacted qualifying opt-in legislation. On November 15, 1995, however, a Deputy Comptroller telephoned the Commissioner's Chief Deputy and informed him that the OCC was of the view that Society-Michigan's main office could be established at any location at the time of conversion, just as in the case of a de novo charter. Thus, under the OCC's view as espoused by the Deputy Comptroller, the mergers could be accomplished under the existing federal law despite the serious problem recognized only a few days before by Society-Michigan's general counsel. 20 On November 22, 1995, the Commissioner submitted a formal written protest to the OCC to object to the bank's plan. Concurrently with his protest, the Commissioner issued a cease and desist order against the bank to prevent it from pursuing the plan in Michigan. That Michigan administrative proceeding is presently stayed pending this appeal. 21 On January 5, 1996, the OCC issued a 38-page decision approving all three of the applications filed by KeyCorp/Society Bank. On February 27, 1996, the Commissioner filed his complaint in the district court seeking judicial review of the OCC's decision, asking that the court set it aside as having been arbitrary and capricious, an abuse of discretion, and not in accordance with the law. The complaint also sought a declaration that the OCC's simultaneous approval of the three applications: (1) violated state law; (2) violated federal law; (3) resulted in competitive inequality between state chartered banks and national banks; (4) subverted the long-standing competitive equality concept; and (5) circumvented the Riegle-Neal Act and the McFadden Act. Pub.L. No. 103-328; 108 Stat. 2338 (the Riegle-Neal Act); 12 U.S.C. § 36(c) (the McFadden Act). 22 The parties filed cross-motions for summary judgment, and the district court granted summary judgment in favor of the OCC in all respects. First, the court found that the OCC's decision to allow Society-Michigan to designate Bronson as the location of its main office, rather than choosing the original principal office located in Ann Arbor in the state charter, constituted a reasonable interpretation of the applicable statutes. Next, the court upheld the OCC's decision to allow what would then be called Society-N.A. to relocate its main office to Angola, Indiana, and to retain its Michigan branches after the relocation, in accordance with Ghiglieri v. Sun World Nat'l Ass'n, 117 F.3d 309 (5th Cir.1997). The district court further upheld both the OCC's decision to permit Society-N.A. to establish a branch at the former main office Bronson location, and its conclusion that because it was approving the first two applications, there was no obstacle to approving the merger involved in the third application.