Perpetual Federal Savings and Loan Association

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IN THE MATTER OF PERPETUAL FEDERAL SAVINGS & LOAN ASSOCIATION ORDER IN REGARD TO ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT Docket 9088. Decision, Dec. 6, 1977 — Order, Sept. 6, 1979 This order withdraws a Commission order issued December 6, 1977, 90 F.T.C. 608, against a Washington, D.C. savings and loan association for having as directors individuals who simultaneously serve as directors of competitive financial institutions. Further, the complaint in this matter has been dismissed.

ORDER On December 6, 1977 the Commission held that respondent - Perpetual Federal Savings & Loan Association (‘Perpetual’) had violated Section 5 of the Federal Trade Commission Act, 15 U.S.C. 45, by having on its board of directors individuals who served simultaneously as directors of competing commercial banks. 90 F.T.C. 608, 648. Accordingly, the Commission issued a Final Order requiring Perpetual to cease and desist from having any individual serve as a director while at the same time. serving as a director of any corporation engaged in the provision of any financial service in competition with Perpetual. 90 ET. C. at 665-66. Perpetual filed a petition for review.

On November 14, 1978, this matter was remanded to the Commission by the United States Court of Appeals for the Fourth Circuit for reconsideration in light of the Financial Institutions Regulatory and Interest Rate Control Act of 1978, Pub. Law 95-630, 92 Stat. 3641 (Nov. 10, 1978). Title II of that Act, the Depository Institution Management Interlocks Act of 1978, 92 Stat. 3672, codified at 12 U.S.C. 3201, et seg., prohibits a range of interlocks between savings and loan associations and competing banks. Interlocks like those at issue in this proceeding are exempted from the Act’s proscriptions for a period of ten years from the Act’s enactment. In the limited rebriefing that followed, both Perpetual and complaint counsel concurred that the December 6, 1977, Final Order should be withdrawn and the complaint dismissed. Complaint counsel construed Section 206 of Title II as impliedly exempting interlocks like Perpetual’s from the reach of the Commission for ten years. According to Perpetual, passage of the Act confirmed that Commission jurisdiction over Perpetual’s director interlocks. was lacking, that its conduct did not violate the Federal Trade Commis- Order 94 F.T.C.

sion Act and that its conduct would not constitute such a violation even when ten years have elapsed after Title II’s enactment. Subsequent events have made it unnecessary to address these contentions.

Since the submission of briefs by the parties, a new law has been enacted, Pub. Law 96-37 (July 23, 1979) (to be codified at 15 U.S.C. 45, 46, 57), that amends Section 5 of the Federal Trade Commission Act to exempt savings and loan associations such as Perpetual from the jurisdiction of the Commission. Accordingly, It is ordered, That the Commission’s Final Order of December 6, 1977 be withdrawn and the complaint dismissed. ANEDUAIY wae 8 403 Complaint