Opinion ID: 437176
Heading Depth: 1
Heading Rank: 2

Heading: the applications and proceedings.

Text: 9 Mercantile filed its application in February, 1979. The Board approved Mercantile's application without a hearing even though the IIAA had objected to the application and specifically requested a hearing. IIAA appealed to this court, which held that the Board cannot lightly dismiss a protestant's request for an evidentiary hearing. Mercantile I, 658 F.2d at 574. The court determined that an evidentiary hearing must be held when a material fact is contested and the protestant has made a minimal showing that a substantial inquiry would be worthwhile. Id. The court found that IIAA had contested material facts concerning several aspects of Mercantile's application, and remanded for a hearing. The Board was directed to allow the presentation of testimony and documentary evidence on the following issues: 10 (1) the precise manner in which the de novo entry is to be affected; (2) the general cost of insurance to be issued by MBI in comparison to insurance issued by independent agencies; (3) the potential conflict of interest which may result when, as planned, Mercantile's loan officer and insurance agent will be the same person; (4) the potential for tying (coercive and voluntary) the issuance of loan approval to the purchase of insurance; and (5) the competitive impact of MBI's entry into the relevant insurance market in relation to existing insurance agencies. 11 Id. at 576 (footnotes omitted). 12 On remand, the hearing on Mercantile's application was consolidated with a hearing on Commerce's application, which had been filed in September, 1981. An Administrative Law Judge (ALJ) issued findings of fact and recommended that Commerce's application be granted. The ALJ recommended that Mercantile's application be denied because of the ALJ's view that Mercantile did not recognize its fiduciary duty to provide insurance at the lowest practicable cost. The Board for the most part adopted the ALJ's findings and recommendations. It granted Commerce's application and Mercantile's application after a showing that Mercantile recognized it was under a fiduciary duty to provide insurance at the lowest practicable cost. 13