The American Bankers Association said it plans to sue the National Credit Union Administration today in a bid to overturn an expansive new membership rule.

The planned lawsuit takes aim at several provisions of the rule, including one that makes it harder for a company with fewer than 3,000 employees to form a new credit union than to join an existing one.

The ABA said the floor of 3,000 would lead to ever-larger credit unions and discourage new-group formation, despite lawmakers' contrary intent.

"NCUA clearly thumbed its nose at Congress when it adopted this rule," said Harley D. Bergmeyer, the ABA's treasurer, who is also president and CEO of $50 million-asset Saline State Bank, Wilber, Neb. "What the agency has done is illegal."

"It just shows a flagrant bias against the small credit unions," added Edward L. Yingling, the ABA's chief lobbyist.

The bankers group is sending a memo announcing the lawsuit to every member of Congress. Most provisions of the new membership rule took effect Jan. 1.

The suit is to be filed in U.S. District Court for the District of Columbia. The ABA plans to request a preliminary injunction that would temporarily prevent the NCUA from letting credit unions serve additional employers. Such an injunction could take effect as early as February, the ABA said.

An injunction imposed in October 1996 had effectively prevented credit unions from expanding.

The NCUA has wasted no time in acting on its two-year backlog of credit union expansion requests. On Monday alone the agency approved the addition of 67 groups to existing credit unions.

By contrast, only 29 federal credit unions were chartered from 1996 through 1998.

NCUA Chairman Norman E. D'Amours said the ABA would have sued no matter what policy his agency had adopted. Though he cast the lone vote against the membership rule, Mr. D'Amours said in a press release Thursday that "there is a critical distinction" between bad policy and illegality.

Fellow board member Dennis Dollar questioned the ABA's motives. "They have no stake in safe, sound, and viable credit unions," he said. "Our job is to insure just that. It's a natural adversarial position."

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