State Lawmaker Shops new FOM Curbs

HARRISBURG, Pa. – Lawmakers in the Keystone State–ground zero in the field of membership wars with bankers–are seeking support for potential legislation that would reign in community charters. The effort comes as several FOM cases are scheduled to be heard by the state Supreme Court challenging Pennsylvania’s community chartering rules, as well as the tax-exempt status of state charters. The proposed bill is similar to a measure that died in the last legislative session which would severally restrict state chartered credit unions community chartering powers, according to Michael Wishnow, spokesman for the Pennsylvania CU Association. “It would make it very, very difficult for state charters to get community charters in Pennsylvania,” Wishnow told The Credit Union Journal. The initiative, apparently backed by the state’s community banks, comes as the state’s high court is scheduled to hear separate cases on the tax exemption for state charters; the rules governing community FOM; and the state banking department’s authority to apply the FOM rules. Pennsylvania, with two other FOM cases pending in federal court, has become ground zero for the FOM battles, especially with the passage of legislation in Missouri ending a 10-year-fight over the issue.