Missouri Lawmakers Reject Bid To ShieldThreatened CUs
JEFFERSON CITY, Mo. - (05/11/06) -- State lawmakers rejected an effortTuesday to protect Missouris largest state credit unionswhile a court decision striking down their fields of membership ispending. The initiative would have been attached to the annualbanking bill and would have grandfathered all FOMs granted statecharters before March 24, the date the Cole County Circuit Courtstruck down the regulations governing community FOMs. Among theones found illegal were those granted First Community CU, VantageCU, St. Louis Postal CU, St. Louis Telephone Employees CU,Aerospace Community CU, Alliance CU, Telecomm CU, CentralCommunications CU and Electro Savings CU. But the proposedamendment to the banking bill was ruled not relevant to the mainbill and set aside, leaving those credit unions in limbo while thecourt case proceeds. Peggy Nalls, vice president of the Missouri CUAssociation, said the credit union lobby will now focus on gettinglegislation introduced next year that will both protect thosecredit unions awarded FOMs found illegal by the state court and inamending the state law. Max Cook, president of the Missouri BankersAssociation, which brought the legal challenge, said the bankersopposed Tuesdays legislative initiative because it wouldallow a continuation of the rules struck down by the court.Really, what it would do is allow the Credit UnionCommissions regulation to continue on into the future andthat regulation is one that the court struck down and said it wasmuch too broad, said Cook. Despite a ruling that the FOMsgranted are illegal, Cook doubted that the court would order adivestiture of members or branches in the questioned FOMs.As a practical matter, when there are rulings or lawspassed, actions that take place before the rulings or laws arestruck down are rarely, if ever, reversed, he told TheCredit Union Journal. He said the bankers have not decided whetherto seek divestiture.