Magazine article American Banker

Appeals Court Upholds OCC in Texas Loan-Limit Case

Magazine article American Banker

Appeals Court Upholds OCC in Texas Loan-Limit Case

Article excerpt

In a decision making it harder for banks to challenge enforcement actions, a federal appeals court in New Orleans has rejected three Texas banks' request for relief.

The ruling also affirmed the Office of the Comptroller of the Currency's view that banks cannot avoid loan limits by lending money to separate corporations controlled by the same people.

The U.S. Court of Appeals for the Fifth Circuit said last week that it could not overturn cease-and-desist orders and decisions by the Comptroller's office against First National Bank of Bellaire, Texas National Bank of Baytown, and Mayde Creek Bank of Katy.

The "extremely deferential standard of review by which we are here constrained mandates denial of the petition," the judges wrote in a March 13 decision.

Robert L. Griffin, director of litigation at the Comptroller's office, said the decision means that the court, even if it agrees with a bank's view, won't overturn a regulator's ruling except in extraordinary circumstances. "There hasn't been a decision as clear as this," Mr. Griffin said.

The Fifth Circuit deferred to the Comptroller's authority much as the Supreme Court did in a January decision on annuities, Mr. Griffin said.

"You have almost the same kind of language of the Comptroller's discretion on the supervisory side as you have in Valic (the January decision) on the powers side," Mr. Griffin said.

Banking lawyers, however, were not as impressed. "On its face, the decision appears to be entirely unremarkable," said Michael F. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed


An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.