APPEAL from the Circuit Court of Cook County; the Hon. ARTHUR
L. DUNNE, Judge, presiding.
MR. PRESIDING JUSTICE JOHNSON DELIVERED THE OPINION OF THE COURT:
In these five consolidated appeals, pursuant to the Administrative Review Act (Ill. Rev. Stat. 1975, ch. 110, par. 264 et seq.), plaintiffs, various federally chartered savings and loan associations, have challenged decisions of the Illinois Savings and Loan Board and the Commissioner of Savings and Loan Associations (Commissioner), which permit State-chartered savings and loan associations to compete in plaintiffs' respective market areas. In each case the circuit court affirmed the administrative decisions allowing such action. There are several issues of constitutional import and statutory construction common to these appeals which will be enumerated. These issues will be discussed in common, and those issues particular to each case will be set forth in the discussion pertaining to each individual case.
We are advised that a substantial portion of this litigation is tangentially related to a decision permitting federally-chartered savings and loan associations to obtain federal approval to operate branches without regard to any state restrictions on such activity. (Lyons Savings & Loan Association v. Federal Home Loan Bank Board (N.D. Ill. 1974), 377 F. Supp. 11, 26.) Shortly thereafter, various State-chartered savings and loan associations commenced proceedings which, in effect, sought expansion of their interests. See generally 51 Chi.-Kent L. Rev. 656 (1974).
In cause No. 76-953, Albany Savings and Loan Association (Albany), located in Chicago, agreed to sell its limited assets to Ben Franklin Savings and Loan (Ben Franklin), a State-chartered institution located in Oak Brook, Illinois, which would result in the closing of Albany's Chicago office. On August 26, 1975, the Commissioner approved the transaction based on a number of related applications. Specifically, he found the sale was properly accepted by the parties, that the sale was fair, and that Albany had proposed an acceptable plan of liquidation. Of particular importance to this case were two other actions taken by the Commissioner. First, he approved Albany's request to change its business office from the southwest side of Chicago to the Old Orchard Shopping Center in Skokie, Illinois, conditioned on accomplishing the change within 12 months. He also approved Ben Franklin's application to maintain a facility at the Old Orchard Shopping Center conditioned on completion of the sale of Albany. The record also shows that during this time Ben Franklin apparently changed its location to the Lakehurst Shopping Center in Waukegan.
As summarized by plaintiff, Skokie Federal Savings and Loan Association (Skokie Federal), this series of transactions enabled Ben Franklin to operate its main office in Waukegan while maintaining facilities at Oak Brook from where it had relocated and at the Old Orchard Shopping Center because of its bulk-sale acquisition of Albany which also had been granted a relocation. In its brief, Ben Franklin admits to operating two facilities. It agrees that at the time in question one facility was proper, but it maintains that an additional facility might be gained by means of a bulk sale, as here.
Plaintiff administratively challenged this action, but, after extensive hearing, the Illinois Savings and Loan Board affirmed the Commissioner's actions. On administrative review, the circuit court confirmed that decision, and plaintiff has appealed.
In cause No. 76-954, Bridgeport Building and Loan Association (Bridgeport), a State-chartered institution, was located in Bridgeport, Illinois, some 250 miles distant from the Old Orchard Shopping Center. In February 1975 it filed an application with the Commissioner seeking to relocate to the latter location. Bridgeport later sought to retain a facility at its original situs should its application to relocate be approved. The record also establishes Bridgeport's intent to consummate a bulk sale of its assets to Unity Savings and Loan Association (Unity). About this same time, Unity, a State-chartered institution with its principal business office located in Schaumburg, Illinois, and 17 facility offices located throughout the state, sought to maintain a facility both in Bridgeport, Illinois, and the Old Orchard Shopping Center. Unity also indicated that it intended to purchase all the assets of Bridgeport.
Plaintiff, Skokie Federal, opposed Bridgeport's action. After hearings, the plan for Bridgeport's relocation and maintenance of a facility at its former location conditioned, inter alia, upon its sale of assets to an insured institution was approved in November 1975. Skokie Federal then unsuccessfully sought administrative review in the circuit court.
In cause No. 76-955, Niles Savings and Loan Association (Niles Savings) applied to the Commissioner to relocate its principal office 1.7 miles from its present office and to retain a facility at the latter location. In December 1974, less than two months later, the Commissioner approved the application. Plaintiffs Skokie Federal and Second Federal Savings and Loan Association of Chicago (Second Federal), which operate in the area, unsuccessfully contested the relocation in subsequent administrative proceedings before the Savings and Loan Board and the circuit court.
In cause No. 76-956, Cardinal Savings and Loan Association (Cardinal) sought to change its business office from Dundee to Crystal Lake, Illinois, a distance of 10 miles. Plaintiff, First Federal Savings and Loan Association of Crystal Lake (First Federal), objected to the relocation. The Commissioner approved the relocation as well as the maintenance of a facility in Dundee. The circuit court confirmed the administrative proceedings upholding the Commissioner's action.
Finally, in cause No. 76-1168, Unity Savings of Park Forest (Unity Savings) sought to relocate at or near the Yorktown Shopping Center in Lombard and retain a facility at its current location in Park Forest. In October 1975, the Commissioner approved the relocation and retention of the facility on condition that the relocation occur within one year and the site be no closer than one-quarter mile from an existing savings and loan association or in excess of the same distance from the Yorktown Shopping Center. Plaintiff, Prospect Federal Savings and Loan Association (Prospect Federal), on administrative review did not prevail in its attempt to prevent Unity Savings from securing its request. *fn1
These consolidated appeals present issues, inter alia, which are either common to all or issues which are common to several. Of statutory significance in several regards is section 1-9 of the Illinois Savings and Loan Act governing State-chartered institutions. (Ill. Rev. Stat. 1975, ch. 32, par. 709.) Prior to 1971, that section prohibited any savings association from establishing any branches or offices unless similar opportunities were afforded banks. (Ill. Rev. Stat. 1969, ch. 32, par. 709(b).) In 1971, the statute was amended to provide an exception to the aforesaid limitation to the extent "the Commission may adopt regulations which provide for the establishment of a facility, as defined by the Commissioner, in the case of a supervisory merger * * *, or, a single facility in the case of a relocation." (Ill. Rev. Stat. 1973, ch. 32, par. 709(b).) This exception subsequently was modified by Public Act 78-943 (effective November 14, 1973) to permit the operation of a facility not only occasioned by a supervisory merger but also by consolidation or bulk sale. Public Act 79-968 further amended this section (the added language is italicized here, while the deleted language appears in brackets):
"(b) No association may [shall] establish branches or offices at which savings or investments are regularly received or loans approved, unless and to the geographical extent branch powers and offices are granted to state banks under the `Illinois Banking Act', as amended, or as it may be amended or supplemented, except the Commissioner may adopt regulations which provide for the establishment of facilities [a facility], as defined by the Commissioner, in the case of mergers, consolidations [a supervisory merger, consolidation] or bulk sales [sale]; or, facilities [a single facility] in the case of relocations [a relocation]." (1975 Ill. Laws, at 2922 (effective October 1, 1975).)
The 1975 amendments would appear to have substantially lessened the restrictions on the expansion of state-chartered associations.
1 Plaintiffs maintain that section 1-9(b) of the Savings and Loan Act is an unconstitutional delegation of legislative authority to the Commissioner because generally there are no limitations or guidelines contained therein upon which to base the requisite regulations or upon which the exercise of the Commissioner's statutory authority may be circumscribed. This argument was rejected in the recent appellate court decision of Security Savings & Loan Association v. Griffin (1978), 56 Ill. App.3d 903, 372 N.E.2d 1118. There, the Fourth District Appellate Court specifically noted that section 1-9(c) contained restrictions for the nature of the business to be conducted. That section provides:
"No business shall be done at a facility except receiving deposits, cashing and issuing checks, drafts and money orders, changing money, processing mortgages and receiving payments on existing indebtedness." Ill. Rev. Stat. 1975, ch. 32, par. 709(c).
2, 3 Moreover, in Stofer v. Motor Vehicle Casualty Co. (1977), 68 Ill.2d 361, 369 N.E.2d 875, our supreme court discussed the concept of the constitutional separation of power between the three branches of government in the context of a statutory authorization to the Director of Insurance to prescribe insurance policy provisions, in effect, through administrative rule-making. The court examined the present complexity of government, noting that to require the legislature to delineate all permissible actions promulgated pursuant to administrative regulations would result in hopeless inefficiency. Yet the court recognized that administrative rule-making was not to be unrestrained.
"Accordingly, we find that the view which has developed through the decisions of this court in recent years requires that the legislature, in delegating its authority provide sufficient identification of the following:
(1) The persons and activities potentially subject to regulation;
(2) the harm sought to be prevented; and
(3) the general means intended to be available to the administrator to prevent the identified harm." (68 Ill.2d 361, 372.)
Section 1-9(b) of the Illinois Savings and Loan Act complies with these criteria.
From a reading of section 1-9(b), it is obvious the parties and scope of activities to be regulated are statutorily limited by section 1-9(c). Thus the initial consideration in Stofer is fulfilled.
The second factor relates to the harm to be prevented. We believe an examination of the converse of this proposition is sufficient to answer this question. It is apparent the legislature in effect permitted expansion of services by state-chartered savings and loan associations by enactment of the recent amendments to section 1-9(b), thereby furthering the salutary purposes set forth in section 1-2 to expand the possibilities of home ownership and prompt savings. (Ill. Rev. Stat. 1975, ch. 32, par. 702(a).) The increase in competition between mortgage-lending institutions within an area might allow for potentially lower mortgage rates or the costs involved in those transactions, thereby increasing the possibility that persons who might otherwise be unable to purchase a home at that time would be afforded the means to do so. Moreover, the Commissioner is to determine the ...