LOS ANGELES - The controversial merger between Lockheed Employees' Federal Credit Union and Engineers Federal Credit Union remains intact, even as a federal court weighs a legal challenge to it.

On July 7, the U.S. District Court for the Northern District of California, San Francisco, ordered the National Credit Union Administration not to cancel Engineers' charter, pending further review.

The existence of the charter means that if the judge were to find the merger illegal, it could be unwound, said NCUA general counsel Robert M. Fenner.

The court set a hearing on a preliminary injunction for Sept. 6.

Public Works Credit Union sued the NCUA on June 26 because it claimed the agency broke its own rules by ignoring concerns the $28 million-asset credit union raised about the merger.

Engineers and Public Works had overlapping charters. The latter is worried that the giant Lockheed Employees will poach its members when the merger is completed.

Public Works had sought a temporary restraining order, but the judge denied this.

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