Bankers See Political Solution In Anti-CUCourt Decision
SALT LAKE CITY - (12/13/04) -- Utah bankers said last week'sfederal court ruling striking down four precedent-setting communitycharters granted by NCUA undercuts a political agenda by thefederal credit union regulator. "The decision by NCUA has wreakedof politics since day one. That politics has been sent back toNCUA," commented Howard Headlee, president of the Utah BankersAssociation, which launched the court challenge, to The CreditUnion Journal on Friday. Headlee and the Utah bankers maintainedthe NCUA Board's April 24, 2003 approval of a then-record settingsix-county community charter for Tooele FCU was intentionally setto to pave the way just a few days later for the conversion of twoof Utah's biggest credit unions to expand to the same six-countyfootprint, allowing the twoAmerica First CU and GoldenwestCU to escape the tax trap carefully set by the state'sbanking lobby. The NCUA ruling allowed the two credit unions, alongwith a third that followed later, University of Utah CU, to convertto the tax-exempt shield of the federal charter just as thelegislature was debating a tax on the state's largest creditunions. The American Bankers Association agreed. "In this case itis clear NCUA gerrymandered common bonds to fit the pre-existingfootprints of state-chartered credit union seeking to avoid Utahstate law by converting to federal charters," said Edward Yingling,head of the ABA, which joined the Utah bankers in the legalchallenge.