Bankers Line Up To Help CUExit
SHERMAN, Texas - (08/15/05) -- In what has shaped up to be thebiggest inter-industry fight since the AT&T Family FCU case, adozen high-powered Washington lawyers representing the nation'sbanks and credit unions will square off in federal court hereWednesday over NCUA's power to stop two giant credit unions fromconverting to banks. Nothing less than the credit union charter ison trial as lawyers for Community CU and OmniAmerican CU try toconvince the court that NCUA overstepped its boundaries when itfailed to certify the member votes to switch charters for the twocredit unions--the two biggest credit unions to ever seek to switchto banks. The banking lobbyhas jumped with both feet to ease theway for the giant credit union conversions, which would be a majorpublic relations coup for the banking industry. On Friday, theAmerican Bankers Association and its 40 state affiliates told thecourt that NCUA has exceeded its legal authority by blocking thetwo Texas credit unions from switching to banks. CUNA and NAFCUhave both submitted arguments in defense of NCUA. The legal battleis reminiscent of the nationwide fight that emerged around theAT&T Family FCU case, which eventually reached the SupremeCourt and was joined by all the major industry groups. But NCUAwill have an uphill battle trying to convince the Texas court,notoriously antagonistic to federal claims over states' rights--inthis case state chartered credit unions-- that the 72% member voteat Community CU and the 76% at OmniAmerican CU are not fairindications of the will of the membership.