Independent Bankers Association of New York v. Marine Midland Bank

Under the McFadden Act, a national bank could not establish and operate a branch bank in circumstances under which a state-chartered bank would not be permitted to operate a branch bank. Under New York state law (home-office-protection law), a bank could not open a branch bank in any community with a population under 50,000 that already had the home office of another bank. In 1982, the Office of Comptroller of the Currency (the comptroller) adopted a regulation regarding the operation of a customer-bank communication terminal (CBCT or automated teller machine) branch. The regulation provided that a CBCT branch was an automated device, established (i.e., owned or rented) by a national bank at an off-premises location that provided certain banking services. Wegmans was a grocery-store chain that installed automated teller machines (ATMs) at dozens of its stores. Marine Midland Bank, N.A. (Marine) (defendant) was a national bank. In 1983, Wegmans and Marine agreed to permit Marine depositors to use the ATM located in the Wegmans store in Canandaigua, New York. This ATM was installed by Wegmans and had the Wegmans logo on it. Wegmans was obligated to service and maintain the ATM. Account holders at various financial institutions were permitted to use the ATM. Canandaigua had a population of 11,000 and was the location of Canandaigua National Bank’s home office. The Independent Bankers Association of New York (Bankers Association) and Canandaigua National Bank (plaintiffs) sued Marine, alleging that Marine’s use of the ATM constituted branch banking in violation of the McFadden Act and the home-office-protection law. The district court found that Marine’s use of the ATM constituted impermissible branch banking and enjoined Marine from using the ATM in Wegmans’s Canandaigua store. Marine appealed.