In the latest legal street fight over credit union growth, the gangs have chosen their weapons.

On one side, the American Bankers Association is wielding a concept called "legislative intent." A lawsuit filed last week by the group claims that the National Credit Union Administration's new membership rule "violates, rather than enforces" the credit union law enacted in August.

Meanwhile, the NCUA is outfitting itself in that most trustworthy of regulatory armor: agency rulemaking discretion.

According to a source familiar with the government's strategy, the Justice Department will argue that the NCUA's rule conforms broadly to the new law, which it says Congress deliberately left vague.

These positions echo the parties' legal struggle that ended in February 1998 with a Supreme Court victory for the ABA.

It is way too early to tell which side will win this time, but the ABA will again be represented by Wilmer, Cutler & Pickering attorney Michael S. Helfer. The trade group's position is also supported by two key members of the House Banking Committee.

Two tenacious trade groups are petitioning the court for permission to join the NCUA as co-defendants.

An early round will be decided in February when U.S. District Judge Colleen Kollar-Kotelly is expected to rule on the ABA's request for a preliminary injunction that would temporarily prevent credit unions from adding firms to their membership rolls.

The crux of the ABA's case is its belief that the NCUA's rule flouts congressional intent.

According to the ABA, Congress partially restored credit unions' right to grow but with the understanding that viable firms would have to start their own nonprofits rather than join an existing one.

The credit union regulator, the ABA argues, turned that understanding on its head.

For example, the ABA says, Congress clearly stated that a company with more than 3,000 employees should start its own credit union unless it could not operate the institution safely.

But according to the ABA, the NCUA would let companies skirt that restriction for the flimsiest of reasons, including a written desire not to start a credit union.

Similarly, the ABA faults the NCUA for its treatment of firms with fewer than 3,000 employees.

Supported by comments from New York Rep. John J. LaFalce, ranking Democrat on the House Banking Committee, the ABA argues that the NCUA will "automatically" let these smaller companies join existing credit unions, though many could form their own.

The ABA's suit also lambastes the NCUA for failing to limit the mileage between a credit union and its member companies, as required by law.

The NCUA is to file its response Friday.

Eric L. Richard, general counsel at the Credit Union National Association-one of the two groups seeking to join the NCUA's side- vowed a strong defense. Of the ABA's lawsuit, he said, "Each of the seven claims they make is without merit."

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