Magazine article American Banker

Pa. Bankers, Group Fight Credit Unions' Bid for Large Fields

Magazine article American Banker

Pa. Bankers, Group Fight Credit Unions' Bid for Large Fields

Article excerpt

Bankers in Pennsylvania are urging state regulators to deny three credit unions' applications for community charters, including an interstate bid that would involve one of the largest fields of membership ever granted.

The Pennsylvania Bankers Association, along with three banks, told an administrative law judge in mid-July that the fields of membership the credit unions are seeking would go beyond what state law allows. The bankers also argued that Freedom Credit Union in Philadelphia, TruMark Financial Credit Union in Trevose, and Corry Jamestown Credit Union are not capable of serving larger fields of membership.

The bankers' challenge centers on the interpretation of a "well-defined, local or rural community" standard established by the National Credit Union Administration for community charters and adopted by most states.

In one of the first cases decided by the courts, the Virginia Supreme Court ruled this year that the state's financial institutions regulator should judge whether the area a credit union is seeking to serve with a community charter qualifies as a well-defined, local or rural community. A state court in Missouri is expected to take up a similar issue later this year.

But the Pennsylvania matter is far from reaching the courts.

Paul Wenzel, a spokesman for the Pennsylvania Department, said that the administrative-hearing process is preliminary to the regulator's decision on the applications.

A decision on the applications is expected this fall. …

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