Divergent Views as to Applicability to National Banks of State Restrictions on Home-City Branching–Walker Bank & Trust Co. v. Saxon; Commercial Security Bank v. Saxon

Two recent federal court decisions have brought into question for the first time the degree to which the federal law permitting the establishment of branches by national banks’ incorporates state law restrictions upon the establishment of branches within a city in which the branching bank is already located. In Walker Bank & Trust Co. v. Saxon, a national bank sought to branch within its home city of Logan, Utah. In addition to the applicant’s main office, there were branches of two other banks in the city. The applicant national bank in Commercial Security Bank v. Saxon and the complaining state bank had their principal offices and one branch in Ogden, Utah, the city in which the applicant sought to establish an additional branch. Two other state banks had their principal offices in that city.