The American Bankers Association said Tuesday that it plans to drop a lawsuit challenging the right of Point Mugu Federal Credit Union to serve all of Ventura County, Calif.
The ABA and several trade groups had argued that the National Credit Union Administration exceeded its authority when it gave Point Mugu its community-based charter, which lets it serve 670,000 people spread out over 1,800 square miles.
The case, however, became moot on Aug. 7 when President Clinton signed HR 1151, the credit union bill. A provision lets credit unions retain members even if they were illegally added to the institution's field of membership.
"There is no longer at the moment anything for us to sue over," said Michael F. Crotty, deputy general counsel for litigation at the ABA.
Mr. Crotty said it could take several days to formally withdraw the suit because the ABA needs the consent of all the parties involved in the case.
"The bank abandonment of this case is a ripple effect of the many provisions of HR 1151, demonstrating how badly the legislation was needed," said Eric Richard, general counsel to the Credit Union National Association.