State regulators in Wisconsin have temporarily blocked the opening of a credit union for Farm Credit System borrowers, just three days after the charter was granted.
Under attack by community banks and federal lawmakers, Wisconsin's Credit Union Review Board on Friday imposed a two-month stay on the charter for Countryside Credit Union, Wausau.
The board also ordered a full hearing to examine the organization of the credit union.
The ruling suspended a decision last Tuesday by the state's acting credit union commissioner, Ralph Brunner, to grant the charter.
The charter grant outraged community bankers who argued it would give the Farm Credit System a competitive edge. The system already has an unfair advantage, bankers said, because it is a government-sponsored enterprise that can underprice banks on loans to rural borrowers.
Community bankers claimed the institution is being chartered and funded by seven Farm Credit agencies in Wisconsin to bypass federal and state rules barring the system from taking deposits.
The Independent Bankers Association of America, Community Bankers of Wisconsin, and three banks in the state sued last week in U.S. District Court to block the charter.
"It's just a tremendous moral victory to get somebody to stop, look, and listen at the issue, which was getting pushed through roughshod," said H. Lee Swanson, president and chief executive of State Bank of Cross Plains, one of the three community bank plaintiffs.