National and state bank trade groups are planning to appeal a recent ruling by Wisconsin regulators allowing the Farm Credit System to sponsor a credit union.
But they must wait until the Wisconsin Credit Union Review Board explains why it ignored a recommendation by an administrative law judge who found that Farm Credit employees and users share no common bond as required under state law. That explanation is due by Sept. 26.
The law judge's Aug. 26 decision helped bankers block the opening of Countryside Credit Union, Wausau, which they argued is being chartered to bypass federal and state laws barring the Farm Credit System from taking deposits.
Once the review board's reasoning is released, the Wisconsin Bankers Association said, a state trial court will be asked to overturn the decision.
"If Countryside does open," said Harry J. Argue, executive director of the WBA, "it will hurt rural banks of all sizes because it will enjoy the various advantages that credit unions have over banks, as well as the advantages of a government-sponsored enterprise. While the review board's decision wasn't unexpected, we are extremely disappointed."
The controversy began in February when the Farm Credit System won approval from the Wisconsin Credit Union Commission to open Countrywide.
The banking industry responded on two fronts. The bankers association initiated state administrative proceedings and joined the Independent Bankers Association of America and the Community Bankers of Wisconsin in suing in U.S. District Court to overturn the regulator's original decision approving the credit union charter.
But this lawsuit was dismissed Aug. 16 because administrative law judge David H. Schwarz had not yet made his ruling.
