Court Opinion

ID: 9674910
Source: CourtListenerOpinion
Date Created: 2023-08-24 04:37:08.230052+00
Date Added: 2024-06-11T18:16:30.168256
License: Public Domain

DUNN, Justice
(dissenting).
An analysis of this case must begin with words of SDCL 51-20-4: “No branch bank shall be established in a municipality of less than three thousand population where there is an existing national or state bank regularly transacting banking business The clear policy stated by the legislature is that while creation of branch banks is desirable in large towns, it is neither desirable nor justifiable in small communities (like Custer) where one or more banks are already located.
Because of this policy, the focus of this court’s inquiry should be on whether Southern Hills Bank intends to make a bona fide interchange of main offices, or merely a “paper change” to circumvent the branch banking statute. See Ramapo Bank v. Camp, 425 F.2d 333 (1970), cert. den. 400 U.S. 828, 91 S.Ct. 57, 27 L.Ed.2d 58 (1971). The majority opinion, on the other hand, focuses on the ills of the present Custer bank, rather than on whether Southern Hills’ move is actually a branch bank disguised as a main office.
The state banking statutes do not define the term “main office,” and a branch bank is simply defined as “a branch place of business maintained by a bank for conduct of banking[.]” SDCL 51-15-1(7). In Ap*318plication of Live Stock State Bank, Artesian, 252 N.W.2d 227 (S.D.1977), this court affirmed the finding that the applicant bank actually intended to move its main office from Artesian to Mitchell and to establish a branch in Artesian; unfortunately, we never established a definition of “main office” in that case. Despite this, it is important that some definition or standards be recognized so that other banks in the state cannot use the subterfuge of moving their main office in an attempt to circumvent the limits on branch banking.
The criteria used in Application of Berkeley Savings & Loan Ass’n, 115 NJ.Super. 302, 279 A.2d 718, 722 (1971), are quite helpful in defining a “main office”:
(a) The office with the highest volume of accounts; (b) the office with the highest volume of loans; (c) the office at which the board of directors regularly meet; (d) the office where the greatest number of senior officers are permanently located; (e) the office to which reports are made and orders emanate; (f) the office which is officially designated as the principal office; (g) the office which is known to the public as the principal office; (h) the office where a majority of the key departments are; (i) the office where the payroll and bookkeeping records are kept.
The facts of the present case indicate that the office in Custer will not actually be a “main office.” Only one bank officer will move to Custer; all the other officers and directors will stay in Edgemont. The Ed-gemont office will have the highest volume of accounts and loans. The important computer department will remain in Edgemont; the Custer office will be serviced by the computer over telephone lines, just as the Southern Hills Bank branch in Buffalo Gap is being serviced. In light of these facts, it appears that there will be no bona fide interchange of main offices from Edgemont to Custer. There will be the opening of a branch, similar to the one in Buffalo Gap, thus circumventing the legislative policy set forth in SDCL 51-20-4. While the Banking Commission does have broad discretion in reaching its decisions, as the majority indicates, this does not include the flaunting of clearly defined legislative policy.
For this reason I would find that the Commission’s decision allowing Southern Hills Bank to move its “main office” to Custer is clearly erroneous.