## Facts

- A national bank sought to operate two off-premises customer electronic funds transfer centers (CBCTs) in Fargo, North Dakota, capable of providing banking services without in-person contact and outside the bank’s main premises.
- The Comptroller of the Currency approved the bank’s applications (in 1976 and 1977), including authorizing the facilities under “branch bank authority.”
- A state-chartered competitor bank sued for declaratory and injunctive relief, alleging the CBCTs were unlawful “branches” under federal law because national-bank branching is limited by state branching restrictions.
- North Dakota enacted a 1975 statute permitting state banks to offer off-premises electronic services to the same extent federally chartered financial institutions were permitted to provide similar services.
- The district court granted summary judgment for the national bank and the Comptroller, concluding the authorizations were lawful and the CBCTs could be operated.
- The state bank appealed from the summary judgment.

## Issues

1. Whether the CBCTs constituted “branches” whose off-premises operation by a national bank was barred by the National Bank Act’s incorporation of state branching limits.
2. Whether North Dakota law permitted state banks to operate comparable off-premises electronic facilities, thereby allowing national banks to do the same consistent with federal branching restrictions.
3. Whether the Comptroller’s approvals and interpretation of national-bank authority to operate CBCTs were valid and entitled to judicial weight on summary judgment.

## Decision

- The court of appeals affirmed the summary judgment for the national bank and the Comptroller.
- It held that, under applicable federal law and North Dakota’s statutory scheme, the national bank was entitled to operate the two CBCTs pursuant to the Comptroller’s authorizations.
- It concluded that North Dakota law did not impose a prohibition that would invalidate the Comptroller’s approvals under the National Bank Act’s state-law branching limitation.
- It upheld the use of summary judgment because the dispute turned on statutory construction and legal authority rather than material factual conflicts.

## Legal Principles

- A national bank may operate off-premises electronic funds transfer terminals when authorized by the Comptroller, so long as the operation is consistent with the National Bank Act’s limitations tied to state branching law.
- When state law permits state-chartered banks to provide off-premises electronic services to the same extent as federally chartered institutions, a national bank’s operation of comparable electronic facilities is not barred by the Act’s state-law branching constraint.
- Courts give substantial weight to the Comptroller’s administration of national-bank powers regarding electronic banking facilities absent a clear conflict with governing statutes.

## Conclusion

The Eighth Circuit upheld the Comptroller’s approvals and allowed the national bank to operate two off-premises CBCTs in Fargo because North Dakota law permitted comparable electronic banking services and no state-law branching restriction invalidated the federal authorization.


State Bank of Fargo v. Merchants Nat'l Bank & Tr. Co. of Fargo, 593 F.2d 341 (8th Cir. 1979)