Capital Briefs: Judge Asks Regulator to Rein In Credit Unions

A federal judge asked the National Credit Union Administration Friday to voluntarily stop granting field of membership expansions to occupation-based credit unions.

U.S. District Judge Thomas P. Jackson, acting in response to a request by the American Bankers Association, ordered NCUA to respond by Oct. 4. The judge said he may hold a hearing on temporarily blocking field of membership expansions if the agency doesn't act on its own.

The judge also said he was not prepared to rule on the ABA's request to disband AT&T Federal Credit Union until after the U.S. Court of Appeals for the District of Columbia Circuit decides if it will reconsider its July 30 ruling. That decision concluded the NCUA violated the law when it allowed credit unions to add employees from more than one company as members.

ABA deputy general counsel Michael F. Crotty said he was disappointed the judge didn't rule on the field of membership issue. "This is just more delay," Mr. Crotty said. "It is not going to change the eventual outcome."

But Brenda Furlow, acting general counsel to the Credit Union National Association, said bankers should not read too much into the judge's request. There is no guarantee that he will order the agency to stop granting field of membership expansions, she said. "I don't think he has made a decision on what NCUA should be doing," she said.