The U.S. Supreme Court on Tuesday said it will wait until Feb. 18 to reject or accept a case challenging credit union expansions.
If the justices decide to take the AT&T Family Federal Credit Union case, the delay is likely to prevent them from hearing arguments until the fall. That would push an opinion back until early 1998.
The Supreme Court did agree to hear a bankruptcy case. At issue: whether judges should value a lien based on the property's replacement cost or its foreclosure value.
The court also will decide if Farm Credit System lenders must pay state taxes. The state of Arkansas is arguing that the Farm Credit Act requires the system's production credit associations to pay taxes. But the associations claim that as federally chartered institutions they are exempt from state taxes. A federal appeals court sided with the lenders, setting up the high court showdown. Arguments are expected in April and a decision in June.
Finally on Tuesday, the justices ordered the federal appeals court in Atlanta to reconsider a decision allowing the Federal Deposit Insurance Corp. to use the so-called D'Oench Duhme doctrine to void oral contracts made by institutions that subsequently failed.
The credit union case began in December 1990, when four banks sued the National Credit Union Administration for letting AT&T Family serve employees at more than 150 unrelated companies. The federal appeals court in Washington sided with the banks in July, ruling that members of occupation-based credit unions must share a single common bond.
Under the terms of several subsequent orders, credit unions may enroll customers from companies they already serve; but they may not add new companies to their fields of membership.
Banking and credit union lawyers said they expect the courts to leave these restrictions in place until the Supreme Court makes a decision.
Kenneth L. Robinson, president of the National Association of Federal Credit Unions, said his group will take advantage of the delay to urge Congress to clarify that credit union members need not share a single common bond.
