In the war over credit union growth, Utah is proving to be one of the nation's nastiest battlefronts.

Credit unions there are taking their expansion fight to the courts and the streets.

The Utah League of Credit Unions is appealing a November court decision that overturned state regulatory policy. The regulators had allowed credit unions to accept members from more than one county.

The league also says it has gathered enough signatures to put before the Legislature a bill to let credit unions resume serving multiple counties. Such a "people's bill" requires signatures from at least 5% of registered voters in 20 of the 29 counties. The new legislative session opens Jan. 18.

Howard M. Headlee, president of the Utah Bankers Association, called the league's proposal "absolutely outrageous."

What's more, he said, large credit unions that accept members from anywhere in the state are hardly the quaint cooperatives they pretend to be and should be forced to pay state income taxes.

Three credit unions rank among the 10 largest depository institutions operating mainly in Utah. Two of those three are state-chartered credit unions, including America First Credit Union, Ogden, at No. 3 with $1.3 billion of assets and 240,000 members.

The fight over market share and taxation has gotten personal. Cydnee Fullmer, an employee at Mountain America Credit Union, sued a bank-funded lobby, Utahns for Fair Taxation, after its October newsletter included a photo of Ms. Fullmer's Lexus parked outside the Salt Lake City-based credit union.

A caption in the newsletter suggested that Ms. Fullmer was paid too much, and described some of the credit union's managers and customers as "wealthy." However, the newsletter failed to say that Ms. Fullmer had bought the 8-year-old car used in 1997.

"I believe that much of what they have put together is half-truths, deceptive, and below-the-belt," said Scott G. Earl, president of the Utah League of Credit Unions. Officials from Utahns for Fair Taxation declined to comment.

While gung-ho about the signature drive, Mr. Earl was uncertain about the chances of passing favorable legislation, because many of the state's top lawmakers have strong connections to banks.

House Speaker Martin R. Stephens, for example, works at Zions First National Bank, and House Majority Leader Kevin S. Garn sits on the board of $121 million-asset First National Bank of Layton.

In a last-ditch attempt to broker an end to the fighting, Rep. Garn and state Sen. David H. Steele, a board member at $47 million-asset Davis Schools Credit Union, Farmington, have set up a summit between bank and credit union leaders.

"There's no sense in us just having shouting matches ... or rehash(ing) the court case," said Sen. Steele. He said his goal was to find "common ground." The first meeting between credit union and bank representatives was held Tuesday.

But Sen. Steele acknowledged that a cease-fire might be elusive. "We're talking about a lot of money," he said.

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