## Facts

- The Comptroller of the Currency issued an interpretive ruling (Dec. 11, 1974) stating that national banks could establish off-premises customer-bank communication terminals (CBCTs), similar to early ATMs, and that CBCTs were not “branches” under 12 U.S.C. § 36(f).
- CBCTs allowed customers to conduct core transactions—such as making deposits, withdrawing cash, and transferring funds—through electronic communication with the bank’s systems at locations away from a bank’s main office and existing branches.
- The ruling required national banks to provide advance written notice before establishing a CBCT and later imposed a mileage limit on certain exclusive terminals.
- A trade association representing smaller banks and related plaintiffs challenged the interpretive ruling, alleging CBCTs performed branch banking functions and thus triggered federal branching limits and state branching restrictions incorporated through § 36.
- The district court held CBCTs were “branches,” declared the interpretive ruling unlawful, and enjoined its implementation nationwide.
- The Comptroller appealed, contesting ripeness, the statutory interpretation of “branch,” and the propriety of injunctive relief.

## Issues

1. Whether the challenge to the Comptroller’s interpretive ruling was ripe for judicial review.
2. Whether off-premises CBCTs constitute “branches” under 12 U.S.C. § 36(f) because they perform deposit-taking and cash-dispensing functions.
3. Whether the district court properly enjoined implementation of the interpretive ruling after finding it contrary to the statute.

## Decision

- The court held the case was ripe because the interpretive ruling had immediate and significant legal and competitive effects and presented a predominantly legal question fit for review.
- The court affirmed that CBCTs are “branches” under § 36(f) when they operate as bank “offices” where deposits are received and money is paid out, even if transactions occur electronically.
- The court upheld the injunction, concluding the district court acted within its equitable discretion to prevent continued implementation of an unlawful nationwide policy.
- The judgment of the district court was affirmed in all respects.

## Legal Principles

- Under 12 U.S.C. § 36(f), a “branch” is defined functionally as an office, other than the main office, where the bank receives deposits, pays checks (or pays out money), or lends money.
- A facility that performs core banking functions for customers at an off-premises location qualifies as a “branch” notwithstanding the use of electronic devices instead of staffed counters.
- Section 36’s structure ties national-bank branching authority to state branching limits; interpretations that permit national banks to expand through functionally equivalent facilities outside § 36 risk defeating that statutory scheme.
- Agency interpretations receive limited weight when they conflict with clear statutory text and effectively alter Congress’s branching framework.

## Conclusion

The D.C. Circuit held that off-premises electronic banking terminals performing core deposit and payment functions are “branches” under § 36(f), making them subject to the branching limits incorporated from state law, and it sustained injunctive relief against the Comptroller’s contrary interpretive ruling.


Independent Bankers Ass'n of Am. v. Smith, 534 F.2d 921 (D.C. Cir. 1976)