Notes Banks and Banking: Conflict in Federal Courts as to the Extent State Law Standards Control in Establishing National Bank Branches

SECTION 36 (c) (1) of the National Bank Act permits a national bank to establish branches within the city of the parent bank "if such establishment and operation are at the time expressly authorized to State banks by the law of the State."1 The quoted clause is also contained in section 36 (c) (2) which authorizes the establishment of national branches at any point in the state, expressly subject, however, to those restrictions on location which are imposed on state banks by state law.2 In separate cases involving the establishment of national branch banks within the city of the parent bank, two federal district courts have expressed conflicting views as to the effect of state law limitations upon national branch banking. Both decisions involved the law of Utah, which forbids branches for its state banks in cities with at least one bank unless the branch would take over an existing bank.3 In each case, the Comptroller of the Currency had authorized a national bank to establish a branch in the city of its principal office, even though it would not be taking over an existing bank. In Walker Bank & Trust Co. v. Saxon,4 a