Missouri Bankers: No Deal on FOM Bill

JEFFERSON CITY, Mo. – Credit union representatives met again this week with the bankers to negotiate a bill that would settle their long legal battle over field of membership, but were unable to come to an agreement, despite being urged to do so by state legislative leaders. “We’re closer, I think, then when we started, but we’re still far apart,” Max Cook, president of the Missouri Bankers Association, told The Credit Union Journal, of the fifth meeting between the sides. A carefully arranged agreement that was enacted into law eight years ago has blown up since then with state chartered credit unions obtaining ever larger FOMs, rivaling some of the broadest in the country. The bankers have challenged at least 10 of the FOM grants in court as violating the 1998 law and the courts have agreed. Leaders of the state Senate have directed the two sides to develop a compromise bill which would settle their legal battles. Cook said the bankers want to archive two major things in any bill. One would be consistent limitations that do not use postal zip codes or telephone area codes as Missouri credit unions are doing, but on generally accepted geographic delineations like county or town. The other would be some kind of Community Reinvestment Act-type requirement for credit unions awarded large community FOMs. The bankers have the upper hand in the negotiations because a state appeals court recently struck down the CU Division’s application of the law, rendering FOMs awarded to as many as a dozen of the largest state chartered credit unions illegal.