Judge Strikes Down NCUA's CommunityGrants In Utah

SALT LAKE CITY - (12/10/04) -- A federal judge ruled Thursday thatNCUA violated the Federal CU Act in 2003 by granting a broadsix-county community field of membership for Tooele FCU, which atthe time was the largest community charter ever granted a federalcredit union. In a 21-page decision, the U.S. District Court forthe District of Utah, ruled the six-county region, whichencompasses more than 1.4 million people, two-thirds of the state'spopulation, violated provisions of the FCU Act and NCUA's own FOMrules drafted to enact provisions of the law, requiring thatcommunity FOMs consist of "well-defined local community"; thatgeographic boundaries be clearly defined; and that the residents ofsuch communities have common interests or interact. The rulingcould have broad ramifications because NCUA has approved at leastfour other Utah credit unions for the same community FOM. The suitwas filed by the Utah Bankers Association and the American BankersAssociation. NCUA officials were not available to comment on theruling.