Prior to the U.S. Supreme Court’s decision in Wachovia Bank v. Schmidt, some courts held, for diversity jurisdiction purposes, that national banks were citizens of each and every state in which they had a branch. In Schmidt, the Supreme Court made it clear that this approach was incorrect, but failed to provide an alternative one. Not surprisingly, in the wake of that decision another court split developed. While some courts have found that national banks are citizens only of the state listed on their charters as their main office, others have found that national banks are also citizens of the state that is their principal place of business.

This Note contends that congressional intent and equitable considerations mandate that national banks be considered citizens of both the state listed on their charter as their main office and the state that is their principal place of business. Also, this Note suggests that Congress should amend the relevant statute to clarify that the two-state approach is the correct one, and thereby prevent courts from wasting valuable time and resources on this issue.