Magazine article American Banker

NCUA Sued by Banks on Montana Expansion

Magazine article American Banker

NCUA Sued by Banks on Montana Expansion

Article excerpt

Bankers are again challenging the federal regulator of credit unions to a legal showdown over its chartering authority - this time in Montana.

A group of six banks and one thrift have filed a complaint against the National Credit Union Administration for allowing Missoula Federal Credit Union in January 1992 to widen its membership field to include people who live or work in a portion of Lake County, Montana.

The bank group, called Financial Institutions for Tax Equality (the group's acronym is pronounced "fight"), says the amended charter is illegal because the new membership group isn't limited to a well-defined area, as required by the regulator's rules.

Restriction Sought on NCUA

The lawsuit asks that the revised charter be declared null and void, and that the agency be prohibited from approving expansions beyond a primary occupational or association bond or a well-defined neighborhood, community, or rural district.

Financial Institutions for Tax Equality first met five or six months ago, son Alan Bradley, president of $29 million-asset Bitterroot Valley Bank, Lolo. "But prior to that, when bankers would get together we'd say, |Are credit unions hitting you like they're hitting us?'" he said.

The bankers saw an opening to hit back in the Washington, D.C., circuit court ruling that banks had standing to sue the regulator over field of membership, Mr. Bradley said.

That case was brought against the agency by a group of North Carolina banks and the American Bankers Association over the expansion of AT&T Family Federal Credit Union in Winston-Salem. …

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