The Virginia Bureau of Financial Institutions has stretched the definition of credit unions' common bond too far, the state bank trade group there has charged.
In a petition filed with the state corporation commission last month, the Virginia Bankers Association complained that state-chartered credit unions had been allowed to offer membership to anyone living in a particular city or county.
"A geographic common bond is, in essence, no common bond at all," said Walter Ayers, executive vice president of the bankers association. "If geographic common bonds are used as a basis for membership, the entire state could belong to the same credit union."
A panel of three state judges is expected to consider the petition shortly. Its decision may be appealed to the state Supreme Court.