In Brief: Mont. Banks Permitted to Sue Over Expansion

Bankers in Montana have won the right to sue the federal government for letting a credit union expand to serve a 3,600-mile area in the western part of the state.

Following a two-year-old precedent set by the U.S. Circuit Court of Appeals for the District of Columbia, Judge Charles C. Lovell ruled March 31 that a group of seven banks could sue to roll back Missoula Federal Credit Union's 1992 expansion.

The National Credit Union Administration argued that bankers didn't have the right to sue because the Federal Credit Union Act was not designed to protect banks. The judge ruled that banks still had a stake in the agency's actions.

The banks have "a competitive interest in limiting the expansion of MFCU pursuant to the common bond provision," wrote the judge for the U.S. District Court for the District of Montana.

The banks sued the regulator in September 1993.