A Colorado appeals court has given state-chartered credit unions permission to serve large cities.

The court, ruling 3 to 0, said the Colorado Financial Services Board has the discretion to exempt Gates Credit Union from a requirement that community-chartered institutions serve only areas with fewer than 25,000 residents.

David L. Paul, state commissioner of financial services, praised the decision, saying it shows that state credit union charters are a viable option to national charters. "This is very significant nationally because it really underscores the value of dual chartering," he said.

Don A. Childears, president of the Colorado Bankers Association, said the group expects to appeal to the state supreme court. "We are disappointed," he said. "But we view the litigation as a long-term battle."

Gates is a state-chartered credit union that initially served employees of Gates Corp. and its affiliates. In August 1995 it asked regulators for permission also to serve South Metro Denver, an area with roughly 300,000 residents.

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