Maine bankers have failed to block a credit union from expanding to serve several communities in the southern part of the state.

The state bureau of banking has approved the conversion of Saco Valley Federal Credit Union to a state charter. Under the new charter, the institution's membership base will widen to include people who live or work in 10 communities.

Bankers had opposed the expansion, contending that it did not constitute a well-defined community.

But three local bankers who testified at a June 22 hearing may have hurt the opposition's case by saying the $15 million-asset institution s expansion would not hurt them financially.

If the expansion "threatened the viability of all of them, it probably would've made a difference on the decision," said Robert Studley, principal examiner for the bureau.

In his seven-page order dated Aug. 26 approving the application, Banking Superintendent H. Donald DeMatteis concluded that Saco Valley's field of membership expansion will help it survive cutbacks at the employer groups it serves.

Mr. DeMatteis concluded that the expansion "should not have a material impact" on banks that compete with Saco Valley.

The credit union did not get everything it wanted, however. The regulator denied the credit union six communities it had requested, some of which are 40 miles from its headquarters, Mr. Studley said.

The regulator decided that no common bond tied those communities to the others, Mr. Studley said. The regulator also doubted that the credit union would be able to serve the towns.

The Maine Bankers Association continues to seek the power to comment on and appeal chartering decisions by the National Credit Union Administration.

The trade group has asked Maine's two senators, George Mitchell and William Cohen, to submit legislation that would allow the public to appeal expansions granted by the federal regulator. Currently only other credit unions are notified of, and allowed to protest, NCUA actions.

"The Maine Bankers Association finds it hard to believe that Congress intended to allow the NCUA ... to operate in an environment where the public is unable to present information related to charter applications, requests for expansion of fields of membership, and branching and where the public is unable to appeal decisions of a federal agency;' Joseph J. Pietroski Jr., executive vice president of the Maine Bankers Association, said in a statement.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.