Maine bankers suing the state to block credit union expansion.

The Maine Bankers Assoation is suing the state regulator over his decision to let a credit union expand its membership base. The trade association charges that the Maine Bureau of Banking committed an "error of law" when it permitted Saco alley Federal Credit Union to absorb 10 communities into its membership base when it converted' to a state charter. The credit union hasn't yet converted.

"This order creates dangerous recedent for further credit union membership expansion throughat the state and thereby further aggrieving the membership of Maine Bankers Association," said the three-page petition for review, led Sept. 26 in the Superior Court for Kennebec County.

The regulator acted illegally because it let the $15 million-asset credit unio n combine a communicredit membership base with its current occupational membership base, the petition said.

"The Maine Legislature did not establish a procedure for combining separate and distinct credit union fields of membership, and had the Maine Legislature intended or contemplated such combinations of credit union fields of membership, the legislature would have established procedure and process to do so," the petition said.

The petition also charged that the regulator used facts that weren't presented at a public hearing or in the public record in making his decision.

Maine Banking Superintendent H. Donald DeMatteis said he acted properly and within the law in granting the expansion. But he acknowledged he'd figured there was a "50-50 chance" he'd have to defend his decision in court.

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