Missouri Passes new Curbs on Field of Membership

JEFFERSON CITY, Mo. – The state House yesterday passed a bill to restrict field of membership, in hopes of ending a decade-long fight between the bankers and credit unions. The bill, which is expected to be signed into law by Governor Blunt, would limit community expansions to cities or contiguous counties, drastically reducing the multiple county FOMs granted by state regulators in recent years, some which spread across a half dozen counties consisting of well over a million people. Those credit unions that exceed the new limits will be allowed to retain their FOMs under the new law, scheduled to take effect August 28. However, the bankers failed to convince lawmakers to apply a Community Reinvestment Act for state chartered credit unions, part of the initial debate over the bill. The law is expected to settle ongoing litigation between the credit unions and banks, which claim that the vast community charters granted at least a dozen state chartered credit unions violates the 1998 FOM law carefully negotiated between the two antagonists.