Mercantile Texas Corp. v. Board of Governors of the Federal Reserve System
United States Court of Appeals for the Fifth Circuit
638 F.2d 1255 (1981)
- Written by Robert Cane, JD
Facts
Under the Bank Holding Company Act, the Board of Governors of the Federal Reserve System (the board) (defendant) had discretion to reject a proposed merger of bank holding companies upon a finding that the merger would have a monopolistic or anticompetitive effect. Mercantile Texas Corporation (Mercantile) (plaintiff) was a bank holding company that operated nine banks in Texas. PanNational Group, Incorporated (PanNational) was also a bank holding company. PanNational operated five banks, which were all in El Paso, Texas, except for one bank in Waco, Texas. None of Mercantile’s banks were in El Paso or Waco. Mercantile’s closest bank to El Paso was 500 miles away, and its closest bank to Waco was 95 miles away. Mercantile and PanNational sought to merge. The two companies applied to the board for approval of the proposed merger. The board found, without much discussion of the relevant economic data, that the merger would eliminate future potential competition between the two companies in Waco and El Paso, so the board denied the application for the proposed merger. Mercantile appealed.
Rule of Law
Issue
Holding and Reasoning (Rubin, J.)
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