UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT
MacKinnon, Robb and Wilkey, Circuit Judges. Opinion for the court filed by Circuit Judge MacKinnon.
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE MACKINNON
MacKINNON, Circuit Judge:
On March 29, 1976, the Board of Governors of the Federal Reserve System (hereafter "Board"), acting pursuant to the Bank Holding Company Act of 1956, 12 U.S.C. § 1841 et seq., approved the application by the First New Mexico Bankshare Corporation (hereafter "Bankshare"), a bank holding company of Albuquerque, New Mexico, to acquire all of the stock of the Bank of Las Cruces, New Mexico, a proposed new national bank (hereafter "New Bank"). From the approval of such acquisition, the Farmers and Merchants Bank of Las Cruces (hereafter "FMB") asserts that it is an aggrieved party and appeals in accordance with the right accorded it by the Bank Holding Company Act of 1956, as amended, which provides as follows:
Any party aggrieved by an order of the Board under this chapter may obtain a review of such order in the United States Court of Appeals within any circuit wherein such party has its principal place of business, or in the Court of Appeals in the District of Columbia, by filing in the court, within thirty days after the entry of the Board's order, a petition praying that the order of the Board be set aside. . . . Upon the filing of such petition the court shall have jurisdiction to affirm, set aside, or modify the order of the Board and to require the Board to take such action with regard to the matter under review as the court deems proper. The findings of the Board as to the facts, if supported by substantial evidence, shall be conclusive.
12 U.S.C. § 1848 (1970) (emphasis added). *fn1
This appeal presents two issues. The first is whether the Board is required to hold a hearing so that FMB can discover evidence and cross-examine the applicant Bankshare. Related to this issue is the question of whether an adequate opportunity for discovery of evidence and cross-examination was provided, irrespective of whether a formal hearing was required. The second issue is whether the Board's findings in favor of approval of the application are supported by substantial evidence. I. THE RELEVANT STATUTES
The Bank Holding Company Act of 1956, as amended, prohibits a bank holding company from acquiring ownership or control of a bank without the approval of the Board. *fn2 Pursuant to the Board's implementing regulations, a bank holding company seeking such an acquisition must first file an application with a Federal Reserve Bank, which investigates the application and reports the facts and submits a recommendation to the Board. *fn3 Then, after notice of receipt of the application is published in the Federal Register, *fn4 the application, pursuant to 12 U.S.C. § 1842(b), is forwarded to the Comptroller of the Currency if the bank to be acquired is a national bank. *fn5 The statute requires the Board to "allow thirty days within which the views and recommendations of the Comptroller . . . may be submitted." *fn6 The Comptroller may disapprove the proposal, in which case the Board is required to hold a hearing after giving written notice to the applicant. This hearing "shall afford all interested parties a reasonable opportunity to testify at such hearing." *fn7 However, if the Comptroller approves the proposal for acquisition, the statute does not require that a hearing be held.
The rationale for requiring a hearing when the Comptroller disapproves the application but not when he approves the application is vividly apparent in legislative history. *fn8 In short, Congress sought both to ensure that the true merits of an application would be elicited in the event of disapproval and to facilitate more informal proceedings where the Comptroller (or state bank supervisory authority) approves the application. This procedure demonstrates that Congress believed it could place considerable reliance upon the intimate knowledge of the banking situation that the close, regular supervision and regulation of banks gave to their federal and state supervisors.
The factors governing the Board's determination of whether to grant or deny the application for approval of the transaction are stated in 12 U.S.C. § 1842(c) (1970):
The Board shall not approve -
(1) any acquisition or merger or consolidation under this section which would result in a monopoly, or which would be in furtherance of any combination or conspiracy to monopolize or to attempt to monopolize the business of banking in any part of the United States, or
(2) any other proposed acquisition or merger or consolidation under this section whose effect in any section of the country may be substantially to lessen competition, or to tend to create a monopoly, or which in any other manner would be in restraint or [of] trade, unless it finds that the anticompetitive effects of the proposed transactions are clearly outweighed in the public interest by the ...