## Facts

- A grocery chain installed, owned, and maintained an ATM at its store in Canandaigua, New York, displaying the grocery chain’s branding.
- The ATM was available for use by customers of multiple financial institutions.
- A national bank entered an agreement allowing its depositors to use the grocery chain’s ATM.
- Canandaigua had about 11,000 residents and was the location of another bank’s home office.
- Under New York’s “home-office-protection” rule, a bank generally could not open a branch in a community under 50,000 where another bank maintained its home office.
- Plaintiffs claimed the national bank’s participation made the grocery-store ATM the national bank’s “branch,” violating federal branching limits that incorporate state branching restrictions.

## Issues

1. Whether the national bank’s arrangement allowing its customers to use a third-party-owned ATM constituted establishing or operating a “branch” under 12 U.S.C. § 36 and the OCC’s CBCT regulation.
2. What weight to give the Comptroller’s interpretation of “branch” and “established” for shared ATMs.
3. Whether New York’s home-office-protection restriction barred the national bank’s participation if the ATM was not the bank’s “branch.”

## Decision

- The Second Circuit reversed the district court and vacated the injunction barring the national bank from using the grocery-store ATM.
- The court held the national bank did not “establish” a branch at the ATM location because it neither owned nor leased the machine.
- The court accepted the OCC’s regulatory definition tying “established” to ownership or rental/lease by the bank and found it consistent with § 36.
- Because no branch was established, the state home-office-protection restriction incorporated through § 36 did not apply to the bank’s participation in the shared ATM.

## Legal Principles

- Under 12 U.S.C. § 36, national bank branching is limited to what state law would permit for state banks, but whether a facility is a “branch” depends on the federal definition as implemented by the OCC.
- Under the OCC’s CBCT regulation, an off-premises terminal is treated as a bank “branch” only if it is “established” by the national bank, defined as owned or rented/leased by the bank.
- A national bank’s customers’ access to an ATM owned and controlled by a third party, including a shared network arrangement, does not alone mean the bank has established a branch.
- Courts generally defer to the OCC’s reasonable interpretation of its own banking regulations unless inconsistent with the governing statute.

## Conclusion

The court held that a national bank’s participation in a shared ATM owned and maintained by a third party is not branch banking under § 36 where the bank does not own or lease the terminal, so state branching limits tied to “branch” status do not bar the arrangement.


Indep. Bankers Ass’n of N.Y. State, Inc. v. Marine Midland Bank, N.A., 757 F.2d 453 (2d Cir. 1985)