In the case of Eccles et al. v. Peoples Bank of Lakewood Village, California (1947), the U.S Supreme Court ruled in favor of the Federal Reserve Board and its chairman, Marriner S. Eccles against a challenge from Peoples Bank of Lakewood Village, California. The bank had sued to prevent enforcement of an order by the Federal Reserve that required it to increase its reserves on deposit with a federal reserve bank as mandated by amendments made to Section 19(a) of the Federal Reserve Act during World War II. The court held that Congress had not exceeded its constitutional powers when it amended Section 19(a). It also found no violation in terms of due process or delegation doctrine principles because there was sufficient guidance provided for administrative discretion within statutory limits set forth by Congress.

In the dissenting opinion for ECCLES ET AL. v. PEOPLES BANK OF LAKEWOOD VILLAGE, CALIFORNIA, Justice Jackson argued that the majority's decision to uphold a regulation by the Federal Reserve Board was an overreach of executive power and violated principles of separation of powers. He contended that Congress had not explicitly delegated authority to regulate bank dividends in this way and therefore it should be considered unconstitutional for an administrative agency to do so without clear legislative guidance or oversight. Furthermore, he expressed concern about potential harm caused by such regulations on small banks like Peoples Bank which may struggle under these restrictions while larger national banks could more easily absorb them.