Texas bankers sued the National Credit Union Administration last week for letting Houston-based Communicators Federal Credit Union expand its customer base.
"Our goal is to rein in NCUA's extremely liberal approach to common-bond expansion," said Robert Harris, president of the Texas Bankers Association.
In filing the suit on July 28, the trade group teamed up with five Texas banks and the Independent Bankers Association of Texas. The case is pending in the U.S. District Court for the District of Columbia.
The 20-page suit seeks to prevent Communicators Federal from expanding and to limit the. NCUA's chartering authority.
Texas is the sixth state in which hankers have challenged credit union expansions. Hearings for the oldest lawsuit, filed by North Carolina banks against the NCUA in 1991, are scheduled for Sept. 9 in the D.C. district court.
Last year the U.S. circuit court of appeals in Washington, D.C., ruled that bankers had standing to sue the federal regulator over chartering decisions.
In February, the NCUA allowed the credit union to add anyone over the age of 50 within a 25-mile radius to its customer base. The decision gave Communicators Federal the chance to add 578,145 people, according to agency documents.
Texas bankers, leery of credit union expansion in the Lone Star State, have long considered suing the NCUA, Mr. Harris said. The association is funding it's-lawsuit by soliciting donations from Texas banks. Mr. Harris said the association was still "a few bucks short" of its $100,000 goal.
Robert M. Fenner, general counsel for the NCUA, said the agency adhered to the law in granting the expansion.
