American Trust Company, Inc. v. South Carolina State Board of Bank Control

The NCNB Corporation (plaintiff) was a bank holding company in North Carolina. NCNB owned a subsidiary, North Carolina National Bank (the bank) (plaintiff). The bank was headquartered in Charlotte, North Carolina, and operated a trust department. The bank had South Carolina residents as customers, who named the bank as their testamentary trustee. In 1970, South Carolina enacted a statute that barred corporations domiciled or licensed in North Carolina or Georgia from serving as testamentary trustees for the estates of deceased South Carolina residents. Subsequently, NCNB formed American Trust Company, Incorporated (American Trust) (plaintiff) as a South Carolina corporation for the purpose of transacting trust business in South Carolina. As required by federal law, NCNB sought approval from the Board of Governors of the Federal Reserve System (the board) for American Trust to commence its trust business. While the application was pending, South Carolina enacted a new law that had the effect of prohibiting American Trust from serving as executor, administrator, or testamentary trustee because American Trust belonged to NCNB, a foreign corporation. Regardless, the board approved NCNB’s application to the extent permitted by South Carolina law. Then, NCNB, the bank, and American Trust sued the South Carolina Board of Bank Control (SC bank board) (defendant), arguing that the South Carolina laws restricting the operation of trust companies based on the domicile of their corporate ownership violated the Equal Protection Clause of the United States Constitution, among other claims.