## Facts

- The Comptroller of the Currency examined First National Bank of Bellaire multiple times (including 1978, 1979, and June 1980) and concluded the Bank had statutory violations and supervisory deficiencies.
- After the June 1980 examination, the Comptroller alleged violations involving real-estate holdings and bank premises, single-borrower lending limits, and insider lending, and further asserted the Bank’s capital was “unsafe and unsound.”
- The Comptroller also asserted the Bank intended to relocate its main office without the required certificate of approval.
- The Bank was served with a notice of charges (July 1980), amended charges (August 1980), and participated in a formal administrative hearing before an ALJ (September 1980).
- The ALJ transmitted the record and recommended decision to the Comptroller, and the Acting Comptroller issued a cease-and-desist order (May 1981).
- The Bank petitioned for judicial review in the Fifth Circuit, challenging the evidentiary and legal bases for multiple directives in the order.

## Issues

1. What standard governs judicial review of a Comptroller cease-and-desist order, including the level of deference to factual findings and statutory interpretations.
2. Whether substantial evidence supported the Comptroller’s findings that the Bank violated statutory limits on real-estate holdings and premises investments under 12 U.S.C. §§ 29 and 371d.
3. Whether substantial evidence supported the Comptroller’s determination that the Bank’s capital condition was “unsafe and unsound,” justifying capital-related remedial directives.
4. Whether the record supported a finding that the Bank intended to “relocate” its main office without required approval under 12 U.S.C. § 30.
5. Whether substantial evidence supported findings of violations concerning single-borrower limits and insider lending under 12 U.S.C. §§ 84 and 375a.

## Decision

- The court granted the petition in part and denied it in part, modifying and partially setting aside the cease-and-desist order.
- The court upheld only those portions of the order supported by substantial evidence and consistent with the governing statutes.
- The court rejected the Comptroller’s capital-adequacy determination as an “unsafe and unsound” condition on the record presented, and set aside related directives.
- The court also set aside or limited additional directives resting on unsupported factual findings or erroneous statutory applications, while leaving in place requirements tied to adequately proven violations.

## Legal Principles

- A Comptroller cease-and-desist order is subject to judicial review; factual findings must be supported by substantial evidence in the record as a whole.
- The Comptroller has broad supervisory authority over national banks, but that discretion must be exercised within statutory limits and supported by evidence sufficient to justify compulsory remedial measures.
- An “unsafe and unsound” capital determination cannot rest on generalized supervisory concern; it must be anchored to a demonstrable factual record adequate to support the mandated corrective actions.
- Enforcement findings under the National Bank Act require correct application of statutory categories (e.g., permissible bank premises and future expansion holdings) to the bank’s actual use, intent, and documented plans.
- A relocation violation under 12 U.S.C. § 30 requires evidence of conduct meeting the statutory meaning of relocation (or sufficiently concrete steps toward it), not merely tentative or unsubstantiated planning.

## Conclusion

The Fifth Circuit enforced the Comptroller’s order only to the extent it was supported by substantial evidence and consistent with the National Bank Act, and it notably set aside the capital-related portions after concluding the record did not justify labeling the Bank’s capital position “unsafe and unsound.”


First Nat’l Bank of Bellaire v. Comptroller of the Currency, 697 F.2d 674 (5th Cir. 1983)