ABA Moves on CU Membership Fight

American Banker | Monday, November 26, 2007

Banking trade groups are arguing "no" in a court case that they hope will overturn a National Credit Union Administration ruling letting Members 1st Federal Credit Union in Mechanicsburg, Pa., extend its membership field to cover the more than 1.1 million residents of a 3,400-square-mile, six-county area.

The NCUA designated the area as a "well-defined, local community" when granting a community credit union charter to Members 1st in 2003. The American Bankers Association filed a motion last week in U.S. District Court for the Middle District of Pennsylvania, asking that the NCUA decision be vacated. It was the latest volley in a lawsuit the trade group filed in 2005.

The NCUA, Members 1st, and two other credit unions in the area have filed a cross-motion, asking that the ABA's suit be dismissed. Briefing the motions is scheduled to be completed by Dec. 18 after which the case will go to the court for a decision.

In a press release Wednesday, the ABA said its brief argues that the area is not a single community but encompasses three metropolitan statistical areas, 93 boroughs, 140 townships, and 50 school districts.