Independent Bankers Ass'n of America v. Smith

Opinion for the Court filed by Circuit Judge WILKEY.

This is an appeal by the Comptroller of the Currency from a judgment of the United States District Court for the District of Columbia (Robinson, J.) declaring unlawful and enjoining an interpretive ruling of the Comptroller relating to the use of electronic funds transfer systems by national banks.1 Appellant Comptroller challenges the district court’s memorandum and order by arguing (1) that plaintiffs’ challenge to his interpretive ruling is not ripe for judicial resolution, (2) that, in any event, he correctly ruled that customer-bank communication terminals are not “branches” under the National Bank Act,2 and (3) that the district court erred in granting an injunction against his ruling. We agree with none of these contentions and, therefore, affirm the judgment of the district court.

I. FACTUAL BACKGROUND

On 11 December 1974 the Comptroller of Currency issued an interpretive ruling in which he construed the National Bank Act as permitting national banks to establish customer-bank communication terminals (CBCT’s) apart from their main offices and branches.3 The Comptroller’s ruling required national banks to give the Comptroller written notice of proposed CBCT operations thirty days before terminals were established, and a later amendment imposed a fifty mile geographical restriction on exclusive (unshared) terminals.4

CBCT’s are manned or unmanned electronic terminals which, depending on how the machines are programmed, permit an existing bank customer to accomplish various financial transactions, including the deposit and withdrawal of funds and the transfer of funds between accounts. These automated tellers may be installed off bank premises in shopping centers, supermarkets, stores, factories, office buildings, etc., and any approved bank customer with a plastic “key card” can effect transactions at these terminals. Some CBCT’s are connected directly to their bank’s central computer, while others record transactions on electronic tapes which are later decoded or read by a machine at the bank. Most CBCT’s which accept deposits and dispense funds require some periodic transportation of funds to and from the bank.5

The central, substantive issue in this case is whether CBCT’s are bank “branches” under the National Bank Act. If they are, then CBCT’s are subject to the restrictions of the Act governing branching; if they are not, national banks can install and operate CBCT’s anywhere (even across state lines) *188subject only to the thirty day filing requirement and the fifty mile geographical limitation of the Comptroller’s ruling. For our purposes, the important restrictions of the Act applicable to “branches” are found in sections 36(c), 36(d) and 51. Section 36(c) outlines the terms under which a national bank may establish and operate a new branch. First, the bank must secure the approval of the Comptroller. Second, the establishment and operation of the branch must be expressly authorized to state banks under state law. Third, the branch must comply with state law restrictions governTnglocation and state law requirements "as to minimum capital stock and surplus.6 In

short, section 36(c) provides “that a ‘branch’ may be established only when, where, and how state law would authorize a state bank to establish and operate such a branch . .”7 The other two sections mentioned above, sections 36(d) and 51, set an additional minimum capital requirement for national banks and their branches.8

The Comptroller’s ruling states that CBCT’s are not “branches” within the meaning of section 36(f) of the National Bank Act.9 Under this interpretation, the restrictions of sections 36(c), 36(d), and 51 are totally circumvented. The ruling would permit national banks to install and operate *189CBCT’s without reference to, or limitation by, state laws regulating or prohibiting branching by state-chartered banks. Also, insofar as CBCT’s are concerned, it would permit national banks to ignore the minimum capital requirements established by sections 36(d) and 51. The ruling does not provide for public notice of the thirty-day filings; nor is there any requirement for approval by the Comptroller, as there would be for the establishment of a traditional branch.10 As of 9 July 1975 twenty-eight national banks in seventeen states had filed notices of intention to establish 155 CBCT’s in accordance with the Comptroller’s ruling.11

On 20 January 1974 plaintiff-appellee, Independent Bankers Association of America (IBAA), filed a petition asking the Comptroller (1) to repeal his interpretive ruling and (2) to conduct formal rulemaking proceedings under the Administrative Procedure Act. IBAA is a nonprofit Minnesota corporation representing over 7300 commercial banks. After the Comptroller denied both requests, IBAA, ten state-chartered banks, and an individual bank customer filed the complaint in this case and Robert A. Mampel, Commissioner of Banks for the State of Minnesota, joined as an additional party plaintiff. The Comptroller then moved to dismiss the action on grounds of nonjusticiability or, in the alternative, for summary judgment on the merits, and plaintiffs filed a cross-motion for summary judgment.

In response to these motions, the district court dismissed several state bank plaintiffs (who were not within fifty miles of a proposed CBCT) and the individual plaintiff for lack of standing. The court found that all other plaintiffs satisfied the requirements for standing to sue and that their challenge to the Comptroller’s ruling presented a justiciable case or controversy. On the merits, the district judge ruled that, within the meaning of section 36(f) of the National Bank Act, a CBCT was a “branch bank, branch office, branch agency, additional office, or any branch place of business ... at which deposits are received, or checks paid, or money lent.” Accordingly, he held the Comptroller’s ruling null and void, permanently enjoined further implementation of the ruling, and rescinded any authority given to national banks by the ruling. On 4 August 1975 the district court denied the Comptroller’s motion for a stay of the injunction pending appeal, and on 10 October 1975 this court denied a similar motion.

II. RIPENESS

While standing to sue focuses on the parties before the court, ripeness asks whether the issues presented by those parties are appropriate for judicial review at this time. After resolving the threshold question of standing, the district court below correctly held,

[Although the Comptroller labelled his ruling “interpretive” and has indicated his intention to monitor the development of CBCT’s, the ruling represents the definitive position of the Comptroller on this issue and the challenge presented herein “raises a clearcut legal issue susceptible of judicial solution.”12

In Abbott Laboratories v. Gardner,13 the leading case on ripeness, the Supreme Court articulated two policy objectives un*190derlying the ripeness doctrine: (1) avoiding premature adjudications Which could embroil the courts in abstract debates over administrative policy; and (2) protecting the agencies from judicial intervention before administrative decisions are formalized and felt in a concrete way by the affected parties. The Court also announced a twofold test for ripeness requiring courts “to' evaluate both the fitness of the issues for judicial decision and the hardship to the parties of withholding court consideration.”14

A. Fitness for Judicial Decision

While deciding in favor of reviewability in Abbott Laboratories, Justice Harlan found three factors controlling on the issue of fitness for judicial review — these same factors emphasize the correctness of the district court’s decision:

1. A Purely Legal Issue — First, Justice Harlan recognized that “the issue tendered is a purely legal one: whether the statute was properly construed by the Commissioner . . ,”15 i. e., whether the statutory term “prominently” authorized the Commissioner to promulgate the challenged regulations. In the instant case the issue facing the district court was strikingly similar: Did the Comptroller act within the scope of his delegated authority when he construed the statutory definition of “branch” to exclude the CBCT operations authorized by his ruling? It is well settled that similar issues of delegated authority and statutory interpretation raise “purely legal” questions.16

The Comptroller now argues that the issue before the district court was not purely legal. He contends that “there is a very definite problem of identifying and refining pertinent facts with respect to how particular CBCT’s operate, the differences in their operation, their varying and diverse functions, how they affect the plaintiffs, and their legal status under State law.”17 This is somewhat — but not completely — inconsistent with appellant’s position in the district court where he moved to dismiss the action on grounds of ripeness or, in the alternative, for summary judgment on the merits. By submitting the case for summary judgment the Comptroller necessarily argued that there was no genuine issue as to any material fact and that he was entitled to judgment as a matter of law.18 Moreover, the district court properly relied on a stipulation of facts where all parties agreed that

[t]he Comptroller’s ruling authorizes one or more of the following banking functions to be performed by electronic devices or machines:

(a) Receive cash or checks in accordance with a request or instruction by the customer; or

(b) Dispense cash in accordance with a request or instruction by the customer; or

(c) To received from a customer:

(1) a request for a withdrawal of funds either from the customer’s deposit account or from a previously authorized line of credit; or

(2) an instruction that the bank receive funds or transfer funds for the customer’s benefit.19

*191The Comptroller argues that, because there are several types of CBCT’s and because his interpretive ruling is framed in general terms, we must await a more specific fact situation before we can properly adjudicate the validity of his ruling. Admittedly, there are several different kinds of CBCT’s which perform divers functions. Nevertheless, it is also true that all CBCT’s perform at least one of the three functions of branch banks listed in section 36(f), and that “since § 36(f) is phrased in the disjunctive, the offering of any one of the three services mentioned in that definition will provide the basis for finding that ‘branch’ banking is taking place.”20 Therefore, the Comptroller’s argument that “a case-by-case review of particular CBCT’s is called for in order to establish the legal parameters of when, if at all, a CBCT is a branch . ”21 misses the mark entirely. The district court properly limited its focus to the illegality of the Comptroller’s ruling. Because all CBCT’s perform one of the branch banking functions described in section 36(f), it was unnecessary to explore the particular capacities of individual units. There is no problem of identifying or refining pertinent facts insofar as this court is

acked to consider the validity of the Comptroller’s interpretation of his governing statute.22

2. Judicial Efficiency — In Abbott Laboratories immediate review was “calculated to speed enforcement. If the Government prevailed], a large part of the industry [was] bound by the decree; if the Government [lost], it [could] more quickly revise its regulation.”23 In other words, immediate review was calculated to avoid a multiplicity of litigation. Similarly, in the present case judicial economy is again served by our finding of ripeness. In effect, the Comptroller argues that plaintiffs must file a separate lawsuit against each national bank noticing a proposed CBCT.24 This approach flies directly in the face of efficient judicial administration; there is no sound reason why the Comptroller’s ruling cannot be tested in this action. Also, our decision may assist other courts which are presently struggling with this same issue, and thereby prevent further duplication of legal effort and expense.25

3. Finality — In Abbott Laboratories Justice Harlan explained, “The regulation challenged here, promulgated in a formal manner after announcement in the Federal *192Register and consideration of comments by interested parties is quite clearly definitive. There is no hint that this regulation is informal ... or tentative.”26 The Comptroller’s interpretive ruling was not issued after formal notice-and-comment hearings, but judging from the Comptroller’s negative response to IBAA’s request for such rulemaking procedures, his ruling is every bit as “definitive” as the Federal Drug Administration regulation encountered in Abbott Laboratories, i. e., administrative reconsideration of the ruling seems quite unlikely. Recognizing this, the district judge ruled that although the Comptroller labeled his ruling “interpretive” and indicated his intention to monitor the development of CBCT’s, his ruling represented his “definitive position” on the issue and plaintiffs’ challenge raised “a clearcut legal issue susceptible of judicial solution.”27 This analysis comports with the “flexible” and “pragmatic” view of finality expressly approved by the Supreme Court in Abbott Laboratories 28 Furthermore, this court has frequently held that an agency’s interpretation of its governing statute, with the expectation that regulated parties will conform to and rely on this interpretation, is final agency action fit for judicial review.29

B. Hardship to the Parties

Turning to the second prong of the Abbott ripeness test, we must balance the hardships to the parties of withholding court consideration. The ultimate question is whether the immediate harm to plaintiffs caused by the Comptroller’s ruling outweighs the advantage of allowing the Comptroller to consider the problem more fully and the disadvantage of having a court decide issues which might otherwise become more sharply defined. Since here the latter two factors are almost without weight, this is not a particularly difficult balancing task.

The Comptroller argues that appellees “have not demonstrated any hardship to themselves if judicial review is deferred until such time as their challenge of CBCT’s arises in a concrete factual setting.”30 To the contrary, continuing reliance on the Comptroller’s ruling by national banks could create an acute competitive disadvantage for state-chartered banks located in states where off-premises CBCT’s are not permitted under state law. Absent the district court’s injunction, national banks would already have hundreds of off-premises CBCT’s operating throughout the country. Also, without the injunction below, this court would have been forced to consider the enormous economic waste involved in a decision that these terminals constitute “branches” and, therefore, must be dismantled.

On the other side of the scale, we find little, if any, hardship. It seems that the Comptroller and the national banks which he regulates can only profit from an early determination that eliminates the cloud of uncertainty surrounding off-premises CBCT’s. At the district court level, either way the court decides the issue of “branchness”, the affected parties are notified be*193fore they have detrimentally relied to any great extent on the Comptroller’s ruling, and, if necessary, the Comptroller can quickly revise his regulations to conform with the court’s decision. The basic point is that under these circumstances it would have been unfair to require state-chartered banks to suffer competitive disadvantages vis-a-vis national banks in order to challenge the legality of the Comptroller’s action. Moreover, as we have previously noted, the legal issue in this case is sharply defined and the Comptroller’s ruling represents a definitive position which is not likely to change. Accordingly, we agree with the district court’s determination that plaintiffs’ challenge presents a justiciable ease or controversy ripe for judicial resolution.

III. VALIDITY OF THE COMPTROLLER’S RULING

If “deposits are received, checks paid, or money lent” at CBCT’s, then CBCT’s are “branches” within the meaning of section 36(f) of the National Bank Act. Hence, the substantive issue in this case is whether all CBCT’s exhibit at least one of these indicia of branchness. After a careful review of the record, we agree with the district court’s conclusion that the legislative history of the National Bank Act, the plain language of section 36(f), and the Supreme Court’s decision in First National Bank in Plant City v. Dickinson31 (hereinafter referred to as “Plant City”), requires this court to find that all CBCT’s do perform one of these three branch banking services and are, indeed, branch banks.

Legislative History A.

In 1911 the Attorney General rendered an opinion restricting each national bank to one “office or banking house located in the place specified in its organization certificate.” 32 Notwithstanding this ruling, in an effort to compete with state branch banks, many national banks began to offer routine paying and receiving services at off-premises locations. In 1923 these so-called “tellers’ windows” received a limited stamp of approval in the form of a second Attorney General’s opinion.33 However, shortly thereafter, in a ease involving a “tellers’ window” engaged in more than routine services, the Supreme Court held that national banks had no implied power to branch and were limited by statute to one office or banking house.34 In this case the Court noted the possible conflict between the two Attorney General’s opinions on branching and stated that to the extent of any disagreement it accepted the view of the earlier opinion.35

Recognizing the severe handicap this decision placed on national banks in states permitting state bank branching, Congress finally passed the McFadden Act in 1927.36 The Act authorized national banks to branch within the city limits where they were located, if, under state law, state banks were allowed similarly to branch. This limited authorization was expanded to state-wide, as well as city-wide, branching in 1933.37 Thus, the Act and its subsequent amendments restored competitive equality to the dual banking system by confining national banks to the branching policies of *194the individual states. This also eliminated discrimination between state and national banks in terms of ability to branch while maintaining the preeminence of state authority in the field. Control of the nature and extent of state and national bank branching was left to the states.

Several excerpts from the legislative history of the McFadden Act convince us that Congress intended to include virtually all off-premises banking operations — even “tellers’ windows” and CBCT’s — within the Act’s definition of “branch” (now 12 U.S.C. § 36(f)). When first introducing the bill Representative McFadden made the following statement on the floor of Congress:

Under a ruling issued by ex-Comptroller of the Currency Crissinger, and supported by an opinion from the then Attorney General [34 Op.Atty.Gen. 1 (1923)] national banks in cities where State banks were engaged in branch banking were permitted to establish what has been called “additional offices” or “tellers windows” for the receipt of deposits and cashing checks. The theory of this ruling was based upon the doctrine that a national bank possessed the incidental power to perform this character of service because competition from State banks had created a condition which made it necessary. A limited number of these additional offices have been established, but their status is not legally certain in view of the implications in the decision of the Supreme Court in the St. Louis case [First City National Bank v. Missouri ex rel. Barrett, 263 U.S. 640, 44 S.Ct. 213, 68 L.Ed. 486 (1924)], and they are otherwise not adequate to meet the situation. They were designed to meet what was regarded as a dangerous emergency in the national banking system. This bill will clear up the uncertainties which may be involved in this situation,38

After the Act’s passage, Representative McFadden placed in the Congressional Record a section-by-section analysis of the statute. In this analysis he described the scope of section 36(f)’s definition as follows:

[Section 36(f)] defines the term “branch.” Any place outside of or away from the main office where the bank carries on its business of receiving deposits, paying checks, lending money, or transacting any business carried on at the main office, is a branch if it is legally established under the provisions of this act.39

Similarly, Representative Stevenson of South Carolina gave the following explanation concerning the effect of the Act’s definition of “branch”:

[It] take[s] away from the comptroller the right to say that banks can maintain offices at which they can pay checks and receive deposits. You take the right absolutely away through that clause [defining “branch”], and we have so written this bill that no power under the Federal Government shall have the right to go into a State and allow any national agency to establish or maintain any branch in violation of the law of the State. . . . [A] State has the right to have its laws respected on great policy matters like this.40

*195Clearly, Congress intended to include within its definition not only the typical brick-and-mortar branch bank, but also lesser bank agencies which provide only some of the services available at a traditional branch, i. e., agencies which accept deposits, cash checks, lend money, or transact any business generally carried on at the main office.

As noted previously, prior to 1927 the National Bank Act provided that the “usual business” of a national bank “shall be transacted at an office or banking house located in the place specified in its organization certificate.”41 In 1927 the McFadden Act amended this section to allow branching by national banks in accordance with the Act’s new approach to branching.42 Representative McFadden analyzed the effect of this amendment as follows:

[This section] amends Section 5190 of the Revised Statutes [now 12 U.S.C. § 81] so as to permit the general business of national banking associations to be carried on at the home office and in the branch or branches which the bank may legally establish or maintain in accordance with the provisions of Section 5155 of the Revised Statutes [now 12 U.S.C. § 36] as amended by this act. This section simply legalizes the business of banking that may be carried on in the branch or branches of national banks lawfully established.43

Thus, through the McFadden Act amendments Congress made it clear that national bank branches are “lawfully established” only when they conform with the branching regulations of the individual states.

Through the breadth of section 36(f)’s definition of “branch”, Congress consciously reserved for the states the control and regulation of branching by state and national banks. This is the result of a carefully worked out legislative compromise giving the federal banking regulatory authorities certain powers and determining that certain powers lie within the domain of state authorities. The Comptroller now invites this federal court to revise the balance of power hammered out by Congress almost fifty years ago. We decline the invitation. Section 36(f)’s definition of “branch” was designed to eliminate a competitive advantage favoring state banks, not to create a new competitive advantage for national banks.

B. The Concepts of Federalism and Competitive Equality

When Congress established our dual banking system it wisely placed at one cornerstone the principle of competitive equality between state and national banks. In furtherance of this principle, the National Bank Act incorporates certain fundamental aspects of each state’s banking regulations into the statute governing the federal banking system. For example, federal law does not preempt state banking law in such vital areas as branching, interest rates, and mergers.44

If allowed to stand, the Comptroller’s ruling would probably not destroy competitive equality or irreparably injure our dual banking system. At worst, the ruling would only temporarily disturb the competitive balance between state and national banks. If national banks were suddenly allowed to establish CBCT’s without regard to state branching regulations, the individual state legislatures would undoubtedly react to protect the interests of their state banking systems by enacting legislation permitting state banks to install and operate off-premises CBCT’s. In fact, several *196states have already reacted to the Comptroller’s ruling in this fashion.45

This court must decide whether the National Bank Act gives the Comptroller the power to initiate this technological revolution in banking or whether this initiative falls within the province of the states. Hence, the question we face is more of federalism and statutory interpretation than of sound banking practice or competitive equality. The Comptroller’s decision to classify CBCT’s as non-branches may be technologically a step in the right direction — that is not for us to decide. Legally, however, we conclude that it was a step beyond the authority vested in him by Congress.

All parties and the district court agree that the definition of “branch” as it appears in section 36(f) is exclusive, i. e., what constitutes a national bank “branch” is a threshold question of federal law to be determined without resort to state law.46 Amicus curiae, the Conference of State Bank Supervisors, disagree with this position, but since their interpretation of section 36(f)’s definition was specifically rejected by the Supreme Court in Plant City,47 we need not reopen that debate. The Comptroller and appellees agree that

. state law cannot affect the definition of terms used in this federal statute, and that a resolution of whether a CBCT is a branch for purposes of federal law should be the same, for example, in California, which permits statewide branch banking, as in Texas, whose constitution prohibits branching.48

In sum, “what constitutes a branch of a national bank . . . is to be determined by application of the standards prescribed by 12 U.S.C. § 36(f).”49

*197In the statement accompanying his ruling, the Comptroller correctly cites Plant City as supporting the exclusivity of the federal definition of “branch.” He misapprehends, however, the remainder of Chief Justice Burger’s reasoning and analysis when he states,

Consideration ... of the competitive aspects referred to by the Court in Plant City does not require CBCT’s to be viewed as branches. Additionally, an analysis of the contractual rights and liabilities under which a CBCT is operated shows that — even if a CBCT is considered to be a branch office, branch agency, or branch place of business — it is not receiving deposits, paying checks, or making loans within the meaning of 12 U.S.C. 36(f). . . . The[se] contractual rights and liabilities arise from the usual operating procedures of a CBCT, and have significant purposes other than structuring the technical and legal aspects of the transaction to avoid the branch banking statutes. Compare Plant City, supra 396 U.S. at 126, 186-137 [90 S.Ct. at 344-345,24 L.Ed.2d at 321-322].50

To the contrary, Plant City clearly supports (in fact, requires) the district court’s conclusion that all CBCT’s are branches for purposes of federal law.

During the 1960’s the Supreme Court twice focused its attention on the subject of branching. In the first of these cases, First National Bank v. Walker Bank & Trust Co.,51 Justice Clark reviewed the legislative history of section 36(c) and then gave judicial approval to the concept of competitive equality:

It appears clear from this resume of the legislative history of § 36(c)(1) and (2) that Congress intended to place national and state banks on a basis of “competitive equality” insofar as branch banking was concerned.52

Walker Bank involved the question of how much state law was incorporated into the federal system via section 36(c). The Comptroller argued that since Utah’s banking statute expressly authorized state banks to have branches, national banks could branch freely without regard to another state statutory provision restricting the method of branching. Justice Clark, writing for a unanimous Court, rejected this argument and held that “national branch banking is limited to those States the laws of which permit it, and even then ‘only to the extent that the State laws permit branch banking.’ ”53

In Plant City, the second important branching decision of the Sixties, the Court again recognized that “Congress has deliberately settled upon a policy intended to foster ‘competitive equality.’ ”54 A national bank in Plant City, Florida, had received permission from the Comptroller to provide armored car services to customers in its service area. The armored car delivered cash and received funds for deposit on a *198daily basis. The bank also established, with the Comptroller’s approval, an off-premises depository for its retail and commercial customers. This stationary receptacle, located in a shopping center near the bank, was served each day by the armored car without charge. to the depositors. Shortly after commencing these off-premises operations, the Plant City bank was notified by the Florida Banking Commissioner that these activities violated a provision of Florida law restricting the business of banking to the main banking house. The bank responded by seeking a declaratory judgment that its activities did not constitute branch banking, and, therefore, were not affected by this provision of Florida law. The district court ruled in the bank’s favor,55 but the Fifth Circuit reversed, holding that to preserve competitive equality the Comptroller must defer to Florida’s concept of branch banking.56 The Supreme Court granted certiorari, and while emphasizing the exclusivity of section 36(f)’s definition,57 affirmed the Fifth Circuit’s decision. Chief Justice Burger concluded his Plant City opinion with the following admonition:

Here we are confronted by a systematic attempt to secure for national banks branching privileges which Florida denies to competing state banks. The utility of the armored car service and deposit receptacle are obvious; many States permit state chartered banks to use this eminently sensible mode of operations, but Florida’s policy is not open to judicial review any more than is the congressional policy of “competitive equality.” Nor is the congressional policy of competitive equality with its deference to state standards open to modification by the Comptroller of the Currency.58

The same admonition applies with equal force to the facts of the instant case: Again we are confronted with an attempt to secure for national banks branching privileges which many states deny to competing state banks. The utility of CBCT’s is obvious; several states permit state-chartered banks to use this eminently sensible mode of operations, but the policy of those states who choose to prohibit CBCT’s is not open to judicial review or to modification by the Comptroller. The policy of competitive equality defers to state standards, not to standards prescribed by the Comptroller. Since 1927 Congress has made it clear that the Comptroller lacks the authority “to allow a national bank to establish as many agencies for receiving deposits and paying checks as he [the Comptroller] sees fit

” 59

*199As developed by. the Supreme Court in Walker Bank and Plant City, the policy of competitive equality “reflects the congressional concern that neither [the state bank system nor the national bank] system have advantages over the other in the use of branch banking.”60 Undeniably, the Comptroller’s ruling in the instant case would give national banks at least a temporary advantage over competing state banks in those jurisdictions which presently do not permit state-chartered banks to establish off-premises CBCT’s. The magnitude of this advantage would be determined by the haste with which state legislatures acted to amend the state statutes that now restrict the use of electronic fund transfer systems.

If a state has historically chosen not to allow branch banking because of a general fear of “bigness” and large concentrations of power, there is every evidence that Congress and the Supreme Court re-gard this decision as the state’s prerogative. A state which generally opposes “big banks” may foresee developments along this line: First, the larger banks will be able to afford more CBCT’s than their smaller competitors. Then, the added convenience of these extra CBCT’s will attract old and new customers away from the smaller banks. The end result will be fewer banks, more “big” banks, and less competition in the financial sector. Hence, a state that favors vigorous competition by many small banks may nevertheless be forced to submit to less, competition and larger banks in order to maintain a viable state banking system.61 This frustration of state policy was not the intent of Congress in the National Bank Act nor the intent of the Supreme Court in Walker Bank and Plant City. Properly construed, the National Bank Act and the policy of competitive equality leave to the states the question of branching and its inherent advantages and disadvantages.62

*201C. The Federal Definition of “Branch”

The Supreme Court in Plant City construed section 36(f)’s definition as follows:

Although the definition may not be a model of precision, in part due to its circular aspect, it defines the minimum content of the term “branch”; by use of the word “include” the definition suggests a calculated indefiniteness with respect to the outer limits of the term. However, the term “branch bank” at the very least includes any place for receiving deposits or paying checks or lending money apart from the chartered premises; it may include more. It should be emphasized that since § 36(f) is phrased in the disjunctive, the offering of any one of the three services mentioned in that definition will provide the basis for finding that “branch” banking is taking place. Thus not only the taking of deposits but also the paying of checks or the lending of money could equally well provide the basis for such a finding.63

Since the federal definition of “branch” includes “at the very least” any place where deposits are received, checks paid, or money lent (and maybe some other places as well), we will consider seriatim these three separate branch banking functions.

The appendix to the Comptroller’s ruling draws several rather fine distinctions be-' tween banking transactions executed at a CBCT and similar activities conducted at a bank’s main office or a traditional branch. In essence, the Comptroller argues that “[cjommunications between customers and their banks through CBCT’s involve instructions to consummate . . . transactions” 64 and not “transactions” themselves. This is so, we are told, because CBCT’s are not yet sophisticated enough to carry out certain procedures, e. g., to verify the authenticity of the documents they receive. Thus, the consummation of a CBCT transaction and the attachment of contractual rights and obligations must await the main bank’s verification and approval. Additionally, as to manned, point-of-sale CBCT’s, the Comptroller insists that “the customer’s direct transactions are not with the bank at all, but with a bona fide third party.”65 According to the Comptroller and one federal district court in • Oklahoma,66 these carefully drawn distinctions prove that deposits can be received, checks can be paid, and loans can be made only by the main bank, not by CBCT’s. We disagree on all three counts.

1. Deposits Received

Coneededly, in his appendix the Comptroller focuses upon several differences in the deposit-receiving functions of a CBCT *202and a typical branch.67 Yet these are differences in form, not differences in substance or result. In fact, the Comptroller’s arguments (and those adopted in the Oklahoma case)68 are precisely the arguments rejected by the Supreme Court in Plant City.69 The national bank there contended that its armored car and shopping center depository did not “receive deposits” within the meaning of section 36(f) since (1) bank customers could arrange for the armored car to pick up funds for deposit, or deliver cash in exchange for checks, only after signing an agency contract with the armored car service and the bank, and (2) all deposits were accompanied by deposit slips containing a contract which provided that the bank and the armored car were the *203agents of the customer and that the transmittal of funds was not deemed to be a “deposit” until delivered into the bank’s hands.

The Supreme Court emphatically rejected the contention of the bank and the Comptroller that because of these contractual relationships, the challenged facilities did not constitute “branches” under section 36(f):

Because the purpose of the statute is to maintain competitive equality, it is relevant in construing “branch” to consider, not merely the contractual rights and liabilities created by the transaction, but all those aspects of the transaction that might give the bank an advantage in its competition for customers. Unquestionably, a competitive advantage accrues to a bank that provides the service of receiving money for deposit at a place away from its main office; the convenience to the customer is unrelated to whether the relationship of debtor and creditor is established at the moment of receipt or somewhat later.

Here, penetrating the form of the contracts to the underlying substance of the transaction, we are satisfied that at the time a customer delivers a sum of money either to the armored truck or the stationary receptacle, the bank has, for all purposes contemplated by Congress in § 36(f), received a deposit. The money is given and received for deposit even though the parties have agreed that its technical status as a “deposit” which may be drawn on is to remain inchoate for the brief period of time it is in transit to the chartered bank premises. The intended deposits are delivered and received as part of a large-scale continuing mode of conducting the banking business designed to bring basic bank services to the customers.

Since the putative deposits are in fact “received” by a bank facility apart from its chartered place of business, we are compelled, in construing § 36(f), to view the place of delivery of the customer’s cash and checks accompanied by a deposit slip as an “additional office, or . branch place of business ... at which deposits are received.”70

We conclude that this excerpt from Plant City decides the instant case insofar as deposits are concerned:71 “Unquestionably, a competitive advantage accrues to a bank that provides the service of receiving money for deposit at a place away from its main office”, i. e., at an off-premises CBCT. “Penetrating the form of [a CBCT deposit transaction] to the underlying substance of the transaction, we are satisfied that at the time a customer delivers a sum of money [to a CBCT], the bank has, for all purposes contemplated by Congress in § 36(f), received a deposit.”

Besides the ordinary deposit into a customer’s checking or savings account, two other types of CBCT transactions properly are characterized as “deposits” within the *204meaning of section 36(f): (1) transfers of funds between two accounts of the same customer and (2) payments on installment loans or credit card accounts.

In the first of these transactions, CBCT’s enable bank customers to transfer funds between two of their accounts at a place remote from the bank’s main premises. Hence, under the rationale of Plant City, these off-premises CBCT’s are bank facilities where deposits are received when customers withdraw money from their checking, savings, or credit card accounts and deposit these funds into one of their other accounts. The Comptroller’s attempt to analogize these account transfers to banking-by-mail and banking-by-telephone breaks down because, in the case of a mailbox or a telephone, no place or facility established (i. e., owned or rented) by a bank is involved.72 Mailboxes and telephones are not facilities supplied by banks for the added convenience of their customers and designed to retain and attract patronage.

Similarly, we conclude that banks which provide the service of receiving payments on installment loans or credit card accounts at a place away from their main banking premises are receiving deposits within the meaning of section 36(f).73 The competitive advantage accruing to a bank that accepts conventional deposits at various conveniently located CBCT’s is difficult to distinguish from the advantage that accrues to a bank from permitting its customers to deposit their monthly credit card or installment loan payments in the same CBCT’s. Again, the bank is providing a customer convenience and is thereby gaining a competitive advantage over banks that do not furnish this service.

In Plant City the Court commented,

We are satisfied . . . that the contracts have no significant purpose other than to remove the possibility that the monies received will become “deposits” in the technical and legal sense until actually delivered to the chartered premises of the bank.74

By isolating this statement from the rest of the Court’s reasoning and analysis, the Comptroller attempts to distinguish CBCT’s from the armored car and receptacle involved in Plant City. He argues that the legal structure of a CBCT transaction is not tailored to evade the branch banking laws, but arises from the usual operating procedures of a CBCT. Be this as it may, the Plant City Court expressly states that any impact on competitive equality is unrelated to when the debtor-creditor relationship technically arises75 and that private contractual relationships do not define the outer limits of section 36(f):

[W]hile the contracting parties are free to arrange their private rights and liabilities as they see fit, it does not follow that *205private contractual arrangements, binding on the parties under state law, determine the meaning of the language or the reach of § 36(f).76

Furthermore, the Court explains that it is not the intent of the parties, but their conduct and the nature of their relations that will determine whether or not they are engaged in branch banking.77 As a matter of federal law, the pivotal issue is whether CBCT operations constitute branch banking — not whether the banks and their customers intend to engage in branch banking. From the bank’s standpoint, from the customer’s standpoint, and from the standpoint of a competing bank, we can discern no significant difference between a CBCT deposit transaction and the deposits made at the Plant City receptacle — “the conduct of the parties and the nature of their relations” are functionally equivalent.

2. Cheeks Paid

Here, for the purposes of argument, the Comptroller divides CBCT’s into two classifications, manned and unma