Ass'n of Data Processing Serv. Orgs., Inc. v. Bd. of Governors of Fed. Reserve Sys.

240 U.S. App. D.C. 301, 745 F.2d 677 (1984)

 

RULE:

The distinction between the substantial evidence test and the arbitrary or capricious test is "largely semantic."

FACTS:

A corporation applied for authority to engage in the processing of banking data. The Board of Governors of the Federal Reserve System approved the application and amended the portions of Regulation Y that dealt with the performance of data processing activities by bank holding companies. Thereafter, petitioner associations applied for review of the board’s decision.

ISSUE:

Should the petition for review of the board’s decision filed by the petitioner associations be approved?

ANSWER:

No

CONCLUSION:

The court held that the data test, as the determinant of whether data processing services were closely related to banking, was not arbitrary or capricious, hence, the petition for review should be denied. The Court held that there was evidence to support the board's conclusion that hardware and software were a single package. The Court posited that the board's decision disposed of the various elements of which the associations complained, whether or not it addressed each of them separately.

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