## Facts

- Business organizers applied to the Comptroller of the Currency for authority to organize Meadowbrook National Bank in east Fort Worth, Texas.
- City National Bank, an existing bank in the area, opposed the application and requested (and received) a public hearing.
- At the hearing, both sides presented evidence about economic conditions, community need, and competitive effects of a new bank.
- Near the end of the hearing, City claimed the organizers had misrepresented the identity or role of Dee Kelly, a proposed 5% shareholder, in the charter materials.
- The administrative record reflected that the regional administrator knew Kelly’s identity and communicated it to the Comptroller.
- The Comptroller granted preliminary approval, finding (among other things) that local population supported a new bank and existing banks were large enough to withstand competition, without expressly discussing the misrepresentation allegation.
- City sued in federal district court, arguing the alleged misrepresentation invalidated approval, the Comptroller failed to investigate and decide that issue, and the explanation was insufficient for judicial review.
- The district court granted summary judgment for the Comptroller and Meadowbrook; City appealed.

## Issues

1. Whether alleged misrepresentations about a proposed shareholder’s identity or role required setting aside the Comptroller’s charter approval.
2. Whether the Comptroller inadequately investigated and failed to resolve the asserted misrepresentation issue.
3. Whether the Comptroller’s stated reasons and the administrative record were sufficient to permit meaningful judicial review under APA standards.

## Decision

- The court of appeals affirmed the district court’s grant of summary judgment for the Comptroller and Meadowbrook.
- The alleged misrepresentation did not invalidate the approval because the record showed the agency knew the true facts about the challenged individual and did not act on a false premise.
- The Comptroller’s investigation and consideration of relevant statutory and regulatory factors were adequate, and City’s disagreement with predictive economic judgments did not show legal error.
- The Comptroller’s explanation, read with the administrative record as a whole, was sufficient to permit effective judicial review.

## Legal Principles

- The Comptroller has broad statutory discretion to grant national bank charters based on economic considerations and the fitness of organizers and management.
- Under APA review, a court sets aside agency action only if it is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.
- Inaccuracies or omissions in an application do not require reversal absent material, prejudicial effect—i.e., where the agency was misled or the decisionmaking process was tainted.
- An agency’s rationale may be supported by the full administrative record; a reviewing court may uphold the decision where the record makes the basis for action reasonably clear.

## Conclusion

The D.C. Circuit upheld the Comptroller’s preliminary approval of a new national bank charter, holding that an alleged misrepresentation was not material where the Comptroller had accurate information, the investigation satisfied applicable requirements, and the decision was reviewable on the administrative record.


City Nat’l Bank v. Smith, 513 F.2d 479 (D.C. Cir. 1975)