A Florida appeals court has rejected a bid by the banking industry to restrict expansion by state-chartered credit unions.

A three-judge panel, without comment, affirmed a decision by the Florida Department of Banking and Finance allowing state credit unions to serve employees at an unlimited number of unrelated companies.

The ruling, released Monday, gives Florida-chartered credit unions an advantage over federal credit unions, which the Supreme Court said in February may only serve members that share a single, common bond.

Ray E. Cromer Jr., president and CEO of North Florida Education Credit Union, praised the ruling. The bankers' challenge was "an obvious attempt to stifle growth and competition," he said. "That would have been detrimental to the Florida consumer."

Florida Bankers Association president Charlie Brinkley said his group is considering an appeal. "We are very disappointed," he said. "The decision runs counter to recent U.S. Supreme Court and federal appeals court decisions."

The Florida bankers group asked the state Banking Department in March 1997 to limit membership in state-chartered credit union to people who share a single, common bond. The group warned that without that restriction, federal credit unions would switch to state charters so they could continue to expand their membership.

The state rejected the request in August, concluding that Florida law clearly gives state credit unions the right to serve multiple companies.

In Virginia, meanwhile, the state Corporation Commission has upheld a decision by the Bureau of Financial Institutions establishing community credit unions.

Bankers had challenged the creation of state-chartered community credit unions, arguing that they are not authorized by any Virginia law. But on April 3 the corporation commission rejected that argument, saying the bureau has discretion to create new types of credit unions that "share a uniting force or tie, link or bond."

The commission, however, upheld a ban on expansions by state-chartered occupation-based credit unions. These institutions may continue to add members from all companies within their existing fields of membership, but they may not start serving new unrelated companies.

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