ALEXANDRIA, Va. - NCUA told a federal court in Pennsylvania last week it will not object to an order recommended by the American Bankers Association to void a disputed community charter issued to three area credit unions the court found lacking in supporting evidence.
Under the proposed order, the three credit unions, Members 1st FCU, AmeriChoice FCU and New Cumberland FCU, will no longer be able to serve a vast field of membership covering six counties and 1.2 million people from Harrisburg to York and would return to their multiple-group charters.
The disputed area was found by the federal court to be lacking in evidence it is a single community, the latest in several suits brought by the banks over expanding community grants for credit unions.
The credit unions' worst fear was that the bankers would ask the court for a divestiture order requiring the credit unions to stop serving members accepted under the disputed charters.
But under the order proposed by the bankers and still to be ruled on by the court, the three credit unions will still be able to serve members who joined through the disputed charter expansions, but not new ones in those areas, unless those individuals are already eligible to join one of the credit unions through their previous charters.
The bankers agree that those credit unions may return to NCUA and apply for a community charter, but one with smaller parameters.
In its filing last week, NCUA noted that the court did not find NCUA's approval of the six-county FOM to be in violation of its rules, only that NCUA had failed to demonstrate enough evidence to approve the disputed region as one community.(c) 2008 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved.http://www.cujournal.com/ http://www.sourcemedia.com/
