HARRISBURG, Pa. – The credit union industry and the bankers will find themselves in familiar territory to start the New Year Friday when a federal court here is scheduled to hear the banks’ challenge of three sprawling community charters awarded by NCUA to Pennsylvania credit unions.
The bankers, as they have in other legal challenges, will try to convince the court that an expansive community charter granted all three–Members 1st FCU, New Cumberland FCU and AmeriChoice FCU–violates provisions of the Federal CU Act which limit community fields of membership to a "single, well-defined, local community". The FOM approved for all three credit unions were among the most expansive ever granted in Pennsylvania at the time, allowing each credit union to serve more than 1.1 million residents in seven counties surrounding the state capital.
The legal challenge, in U.S. District Court for the Middle District of Pennsylvania, was brought by a group of banking lobbies, including the American Bankers Association, Pennsylvania Bankers Association, Pennsylvania Association of Community Bankers and three local banks.
Pennsylvania has become ground zero for the banker-credit union fight, with several banks also suing in state court to block community charters granted by the state Department of Banking.
The bankers have had some success challenging credit union expansions, with a federal court in Utah striking down NCUA community grants and courts in at least two states–which base their FOM rules on NCUA’s–also striking down community charter approvals.
