W. C. York v. Federal Home Loan Bank Board and Federal Savings and Loan Insurance Corp‪.‬

On October 17, 1978, the First Federal Savings & Loan Association of Raleigh (hereinafter First Federal) filed an application with the Federal Home Loan Bank Board (hereinafter FHLBB or Bank Board) seeking to convert from a mutual form of ownership to a stock form of ownership while retaining its federal charter.1 On May 17, 1979, the FHLBB approved the proposed conversion over the objections of petitioner and several other First Federal depositors. The approved plan was presented to the member/depositors of First Federal at a special meeting on June 29, 1979, and was overwhelmingly approved. Shortly thereafter, petitioner instituted a civil action in the United States District Court for the Eastern District of North Carolina, and filed a petition in this court for review of the agency determination.2 Petitioner contends that the proposed conversion was unlawful since the statutory section authorizing conversions from mutual to stock organizations, 402(j) of the National Housing Act (NHA), expired on June 30, 1976, or in the alternative, that the Bank Board's decision to allow this conversion was arbitrary and capricious. We find these objections to be without merit and, accordingly, affirm the FHLBB. In 1933, Congress enacted the Home Owners' Loan Act3 which authorized the creation of federally chartered mutual savings and loan associations and also allowed previously chartered state associations to convert to federal associations. At the time the Act was passed, almost all savings and loans were organized as mutual associations; therefore, Congress adopted this form of organization for the federal system of savings and loans.