ravention of Missouri branching restrictions. The Court held that the Missouri law did not conflict with federal laws, since the National Bank Act required that "the usual business of each national banking association shall be transacted at an office or banking-house located in the place specified in its organization certificate" and that the basis for setting capital requirements was the population of the place where the bank was located. The Court found that Missouri's branching prohibition did "not frustrate the purposes for which the bank was created or interfere with the discharge of its duties to the government or impair its efficiency as a federal agency." Since there was no authorization for the creation of a branch in federal law, the Court said that the state was free to enforce its own laws on the subject.
As a result of this decision, the McFadden Act was passed, specifically authorizing national banks to create branch offices. This act provided parity for federally-chartered banking institutions with their state counterparts, but on a state-by-state basis. The Act stated that national banks could "establish and operate new branches within the limits of the city, town, or village in which said association is situated if such establishment and operation are at the time permitted to state banks by the law of the state in question." A branch was defined as including "any branch bank, branch office, branch agency, additional office, or any branch place of business located in any State or Territory of the United States or in the District of Columbia at which deposits are received, or checks paid, or money lent."
In 1933, the Banking Act amended the branching provisions of the McFadden Act:
A national banking association may, with the approval of the Comptroller of the Currency, establish and operate new branches: (1) Within the limits of the city, town, or village in which said association is situated, if ...