Magazine article American Banker

US Sued in Interstate Banking Dispute

Magazine article American Banker

US Sued in Interstate Banking Dispute

Article excerpt

US Sued in Interstate Banking Dispute

PHILADELPHIA -- Pennsylvania Banking Secretary Ben McEnteer Thursday sued Comptroller of the Currency Robert L. Clarke for approving the relocation of a New Jersey national bank to downtown Philadelphia.

The suit, filed in U.S. District Court here, asked the court to set aside the approval and to enjoin the bank from doing business here.

Also named as defendants were Bank of New Jersey NA, which relocated its only office on May 27, and the $3,1 billion-asset Horizon Bancorp., Morristown, N.H., parent of the bank.

The bank received permission on May 16 to move from Moorestown, N.J., to Philadelphia under a section of National Banking Code that permits a national bank to relocate up to 30 miles, regardless of state boundaries.

Moorestown is 11 miles as the crow flies from the downtown location that Horizon choose. The bank has since been given a new name -- Horizon Bank of Pennsylvania NA.

In the suit, Mr. McEnteer said that Pennsylvania law fobids the ownership and control of a national bank located in Pennsylvania by an out-of-state holding company.

In Morristown, James M. Little, Horizon Bancorp.'s senior vice president and general counsel, said the bank "has the legal right to relocate and to continue to operate."

He said that the Pennsylvania law was "unconstitutional because it unreasonably discriminates" between out-of-state and in-state businesses in interstate commerce. …

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