CUs File Motion To Quash Bank Request In Utah

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Credit union trade groups and NCUA last week asked a federal court here to reject a second attempt by Utah's banks at using external documents to help their lawsuit against NCUA over fields of membership the agency approved for several Utah credit unions.

In a brief filed in the U.S. District Court for the District of Utah Central Division, NCUA, along with intervenor-defendants that include CUNA, the Utah league, NAFCU and four Utah credit unions, the court was urged to reject the bankers' requests for additional documents from the agency. Credit unions are arguing that because the case is an "Administrative Procedures Act" case, it must be "based on the administrative record developed by the agency [NCUA] whose decision is being reviewed," and that the only information the court should be examining is that related to NCUA's approval of the fields of membership for Tooele FCU, America First FCU, Goldenwest Fcu and University of Utah FCU. All are former state charters that have converted to federal and were approved to serve the same six Utah counties.

The plaintiffs in the case, filed in July 2003, are the American Bankers Association, Utah Bankers Association, and three Utah banks-First Utah Bank, Frontier Bank and Liberty Bank.

In their complaint, the banks argued that the Utah FOMs were "unlawful, null and void," and suggested that the federal regulator had acted too quickly and violated its own rules in approving the new federal credit unions' fields of membership.

Moreover, the banks claimed that competition from the credit unions would be "unlawful and ruinous" to local banks.

"The bankers have already lost an attempt at discovery," said NAFCU. "Now, they're seeking to add specific documents that they want to be reviewed along with the administrative record. In (the) brief, the credit union parties said the bankers haven't even addressed whether the documents they want to offer meet any of the narrow conditions set for doing so. Additionally, they said, such information cannot be subject to reasonable dispute, and that is not the case here either."

In a statement, CUNA's General Counsel, Eric Richard, called the bankers' tactics an attempt to "end-run" the judge's earlier order.

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