SUIT TARGETS CREDIT UNION; BANKERS UPSET OVER MEMBERSHIP RULES.Byline: Deborah Adamson Daily News Staff Writer Bankers filed a lawsuit against a regulator of federal credit unions Monday, claiming the office improperly allowed a Ventura County credit union to grant membership to anyone who lives, works or worships in Ventura County. On a day when bankers and credit unions were facing off in the U.S. Supreme Court over whether a credit union can add employees from different companies who share a ``common bond,'' the banking industry upped the ante by targeting another part of the ``common bond'' issue. The new lawsuit targets the definition of a community common bond. The issue before the high court tackles the credit unions' common bond based on ``occupation.'' In general, it's two sides of the same issue. At stake in the lawsuit filed Monday against the National Credit Union Administration The National Credit Union Administration (NCUA) is responsible for chartering, insuring, supervising, and examining federal credit unions (FCUs) and for administering the National Credit Union Share Insurance Fund. in District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). Federal Court is the credit union membership of thousands of people in Ventura County and other credit unions nationwide. The lawsuit's sponsors - San Francisco-based California Bankers Association and Washington, D.C.-based American Bankers Association The American Bankers Association (ABA) is comprised of banks and other financial institutions. It seeks to promote the strength and profitability of the banking industry by Lobbying federal and state governments, building industry consensus on key issues, and providing products and - charge that community, as originally intended in the Federal Credit Union Act In 1934, the U.S. Congress passed the Federal Credit Union Act, which President Roosevelt signed into law. The purpose of the federal law was to make credit available and promote thrift through a national system of nonprofit, cooperative credit unions. of 1934, means a ``small area, neighborhood and rural district,'' said John Stafford John Stafford may refer to:
The field of membership for Point Mugu Federal Credit Union - anyone who lives, works or worships in Ventura County - is stretching the definition of community too far, Stafford said. Community should mean a relatively small area where people interact, he said. ``If you drive through (Ventura County) you'll be eligible (at PMFCU),'' Stafford said sarcastically. Bankers are asking the court to void Point Mugu's membership rules, to declare NCUA's practice as unlawful, and to order community credit unions to get rid of members who don't conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?" fit, meet coordinate - be co-ordinated; "These activities coordinate well" the original definition. But Ron McDaniel, president of PMFCU, the largest Ventura County-based financial institution with $130 million in assets and 32,000 members, said bankers just want to run credit unions out of business. ``It's a methodical approach on their part . . . basically to make credit unions go away,'' he said. ``They really don't want us to be here.'' Stafford said the banking industry is just trying to make sure credit unions follow the rules that govern the industry, especially since one of those rules gives credit unions tax-exempt status. Bankers have said the tax-exempt status allows credit unions to offer better rates than tax-paying banks and thrifts. Credit unions have argued it's their nonprofit status that allows them to offer better deals to consumers, since they don't have to pay dividends to shareholders. Besides, expansion is necessary for survival, credit union officials say. For example, Point Mugu was created to serve employees at the Point Mugu naval base A naval base primarily for support of the forces afloat, contiguous to a port or anchorage, consisting of activities or facilities for which the Navy has operating responsibilities, together with interior lines of communications and the minimum surrounding area necessary for local . But PMFCU switched to a community designation in January after the credit union started losing members due to government downsizing (1) Converting mainframe and mini-based systems to client/server LANs. (2) To reduce equipment and associated costs by switching to a less-expensive system. (jargon) downsizing . ``As it (downsizing) continued over the long haul, we could see our viability threatened,'' McDaniel said. NCUA NCUA National Credit Union Administration (US government) NCUA Nbcs Control Unit Atm spokeswoman Lesia Bullock said Monday's lawsuit is similar to lawsuits the banking industry has previously filed. Bankers have lost on the community common bond issue before, Bullock added. At issue WASHINGTON - Banks and credit unions battled before the Supreme Court Monday over the validity credit unions expanding beyond their traditional base. The question in the case is the interpretation of the Federal Credit Union Act, which required most credit unions to limit their membership to ``groups having a common bond of occupation or association'' or to groups within a particular community. CAPTION(S): Box: At issue (See text) |
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