The Wisconsin banking industry's fight to stop credit unions from expanding into new lines of business soon could spill into the state's courts.

The Wisconsin Bankers Association, Anchor Bank of Madison, and F&M Bank of Kaukauna are expected to file a lawsuit next month to stop a group of three credit unions from operating a commercial loan venture called the Business Lending Group.

The group is a for-profit corporation jointly chartered in March by Banta Community Credit Union of Menasha, CitizensFirst Credit Union of Oshkosh, and Fox Communities Credit Union of Appleton to originate commercial loans to credit union customers who also own businesses. The loans are then shifted to the credit unions' books, according to David Coggins, the group's president.

The possibility of litigation arose Wednesday when the state Credit Union Review Board threw out the banking industry's complaint, which accused the credit unions of overstepping their legal bounds by making nonconsumer loans. The Wisconsin Department of Financial Institutions had previously dismissed a bank complaint.

"We anticipated that our complaints would be turned down," said Kim Kindschi, deputy executive vice president of the Wisconsin Bankers Association. "But we had to go through this process before we could move to the judicial system."

The banks now have until Jan. 13 to draft their case.

Mr. Coggins said his organization and its credit union parents are prepared to fight. "Just like any American business that somebody or something threatens," he said, "we'll do everything we can to protect our rights and keep doing what we're doing."

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