By Barancik, Scott
American Banker , Vol. 164, No. 109
Five months after the American Bankers Association sued the government over its new credit union rule, banks and credit unions remain mired in litigation minutia.
Like actors in a long-running play, each side has memorized its lines and learned to anticipate the other's moves with almost comic timing.
The National Credit Union Administration "clearly thumbed its nose at Congress when it adopted this rule," ABA treasurer Harley D. Bergmeyer said in January, just days before the trade group filed suit.
"They would have filed suit regardless of how our final regulation looked," NCUA Chairman Norman E. D'Amours retorted.
The lawsuit took aim at a number of the rule's provisions, including one that made it harder for a company with fewer than 3,000 employees to form a credit union than to join one.
The ABA said the 3,000-employee floor would lead to ever-larger credit unions and discourage formation of new ones, contrary to the intent of lawmakers.
In the months since the suit was filed, both sides have acquired a following. Joining the ABA were the Independent Community Bankers of America and the Irondequoit Federal Credit Union, a tiny nonprofit from upstate New York that contends the NCUA is letting large credit unions suffocate small ones.
The NCUA was joined by the Credit Union National Association, the National Association of Federal Credit Unions and, most recently, by a half dozen individual credit unions.
The basic plot, however, remains unchanged: Congress passes credit union law; credit union regulator issues interpretive rules; bank trade group charges regulator with misinterpreting law; credit union regulator and trade groups issue denials. Rinse and repeat. That's exactly what happened in the legal saga that began with an ABA lawsuit in 1990. The ABA finally won that case in February 1998, when the Supreme Court ruled 5 to 4 that credit union members must share a "common bond," and that the NCUA could not let them serve new employee groups at will. …