Five months after the American Bankers Association sued the government over its new credit union rule, banks and credit unions remain mired in litigation minutia.

Like actors in a long-running play, each side has memorized its lines and learned to anticipate the other's moves with almost comic timing.

The National Credit Union Administration "clearly thumbed its nose at Congress when it adopted this rule," ABA treasurer Harley D. Bergmeyer said in January, just days before the trade group filed suit.

"They would have filed suit regardless of how our final regulation looked," NCUA Chairman Norman E. D'Amours retorted.

The lawsuit took aim at a number of the rule's provisions, including one that made it harder for a company with fewer than 3,000 employees to form a credit union than to join one.

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

In the months since the suit was filed, both sides have acquired a following. Joining the ABA were the Independent Community Bankers of America and the Irondequoit Federal Credit Union, a tiny nonprofit from upstate New York that contends the NCUA is letting large credit unions suffocate small ones.

The NCUA was joined by the Credit Union National Association, the National Association of Federal Credit Unions and, most recently, by a half dozen individual credit unions.

The basic plot, however, remains unchanged: Congress passes credit union law; credit union regulator issues interpretive rules; bank trade group charges regulator with misinterpreting law; credit union regulator and trade groups issue denials. Rinse and repeat. That's exactly what happened in the legal saga that began with an ABA lawsuit in 1990. The ABA finally won that case in February 1998, when the Supreme Court ruled 5 to 4 that credit union members must share a "common bond," and that the NCUA could not let them serve new employee groups at will.

But the ABA's victory celebration lasted less than half a year. Congress and the White House quickly enacted a law that gave back to the NCUA most of what the Supreme Court justices took away.

The only actor operating without a script in the current drama is U.S. District Court Judge Colleen Kollar-Kotelly. Her March 10 decision not to temporarily block the new credit union rule sank the ABA's legal arguments and sent the trade group back to the law library. "It would seem that the plaintiffs' concerns about the final rule stem more from their own myopic reading of, than an inherent flaw in, the regulation itself," she wrote.

The ABA and the ICBA came back April 1 with a new and improved complaint that they hoped would be more persuasive. Rather than just cite flaws in the rules' language, the groups pointed to actual applications of the rule by the NCUA.

Two weeks later the NCUA asked Judge Kollar-Kotelly to dismiss virtually all of the ABA's complaints. On May 26 the ABA and ICBA rebutted that request, arguing in part that the NCUA had failed to deliver some background documents the trade groups requested.

The government has until June 18 to respond. After that, sources say, the judge is likely to request another round of oral arguments and then rule on the motion to dismiss.

"There's no end in sight," said ABA attorney Michael F. Crotty.

In the meantime, the NCUA is free to implement its rule. Between Jan. 1 and May 28, the NCUA has allowed 1,022 federal credit unions to add nearly 7,600 employer groups to their fields of membership. Only 172 applications have been denied. Most of the newly served employer groups are small, however, averaging 86 employees-far too small to form their own credit unions.

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