Bankers are again challenging the federal regulator of credit unions to a legal showdown over its chartering authority - this time in Montana.

A group of six banks and one thrift have filed a complaint against the National Credit Union Administration for allowing Missoula Federal Credit Union in January 1992 to widen its membership field to include people who live or work in a portion of Lake County, Montana.

The bank group, called Financial Institutions for Tax Equality (the group's acronym is pronounced "fight"), says the amended charter is illegal because the new membership group isn't limited to a well-defined area, as required by the regulator's rules.

Restriction Sought on NCUA

The lawsuit asks that the revised charter be declared null and void, and that the agency be prohibited from approving expansions beyond a primary occupational or association bond or a well-defined neighborhood, community, or rural district.

Financial Institutions for Tax Equality first met five or six months ago, son Alan Bradley, president of $29 million-asset Bitterroot Valley Bank, Lolo. "But prior to that, when bankers would get together we'd say, |Are credit unions hitting you like they're hitting us?'" he said.

The bankers saw an opening to hit back in the Washington, D.C., circuit court ruling that banks had standing to sue the regulator over field of membership, Mr. Bradley said.

That case was brought against the agency by a group of North Carolina banks and the American Bankers Association over the expansion of AT&T Family Federal Credit Union in Winston-Salem.

Robert M. Fenner, general counsel for the regulator, said he wasn't surprised by the Montana lawsuit.

It's just another in the series of challenges we expected from the D.C. circuit's ruling," he said. "We'll challenge it on standing. Then, if we have to, we'll challenge it on the merits."

Credit Union Not Being Sued

Missoula Federal, which has $76.6 million in assets, isn't being sued, said Sherman V. Lohn of the Garlington, Lohn & Robinson law firm in Missoula, who represents the Montana banks.

The reason, he said, is that in a similar suit that four Michigan banks brought against the regulator and Portland (Mich.) Federal Credit Union, a judge dismissed the credit union as defendant.

The judge ultimately ruled for the federal regulator, and the bankers are appealing his decision.

90,000 Potential Members

Missoula Federal was - chartered in 1956 to serve city and county employees. In 1981 it switched to a community-based charter.

The latest expansion allows it to accept persons living or working in a 3,600-mile area in western Montana.

More than 90,000 people are potential members, the suit says.

Steven Widerman, the NCUA trial attorney who successfully defended the agency in the Michigan case, will represent it in the Montana matter, Mr. Fenner said.

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