BISMARCK, N.D. - In a compromise with the banking lobby afteryears of wrangling, state-chartered credit unions in North Dakotawill be operating under a new field of membership law which limitsbranch openings to 75 miles from their main office. The FOMstatute, effective Aug. 1, codifies existing rulemaking but withnew restrictions limiting so-called "leapfrogging" which oneBismarck attorney said forestalls the threat of an FOM suit in arepeat of Utah litigation against NCUA brought two years ago by theAmerican Bankers Association. "We didn't want a federal judgedictating what is a well-defined urban or rural district in NorthDakota," explained Greg Tschider, legal counsel and lobbyist forthe North Dakota Credit Union League. The FOM law signed by Gov.John Hoeven, a Republican, grandfathers existing FOM branchesbeyond the 75 limit but eliminates an old rule permitting CUs toset up a facility 50 miles from an existing branch, an issue whicharoused the ire of the North Dakota Bankers Association. "This issomething that both banks and credit unions can live with,"declared Tim Brown, chairman of the League and president of DakotaPlains CU, Edgeley. The threat of a lawsuit similar to the ABAcomplaint ruled on last December by U.S. District Judge DaleKimball of Salt Lake City finding a group of Utah CUs hadoverstepped their reach in a six-county expansion helped prompt adecision by the North Dakota League Board to reach a FOMcompromise, said Tschider NCUA, joined by CUNA as well as NAFCU asintervenors, had decided not to appeal the ruling which effectivelyremanded the six-county approvals back to the agency for review.Some Utah CUs have said they do plan to resubmit their applicationsbut with limited FOM. Brown said North Dakota CUs understood theneed to find common ground with bankers agreeing with the Tschiderrecommendations adding "that's why we hire legal counsel" toprovide that kind of advice. The decision to move ahead with acompromise statute was made several months ago and the measure waspassed by the legislature without fanfare, said Brown. Tschidersaid for years the issue before the State Credit Union Board hasbeen "what is a well-defined urban and rural district and on thatno one knows the answer" citing debates about whether the districtstops at city limits or the county line. "To me we don't want toask a judge like they did in Utah to determine" the definition,said Tschider. "We have no desire to have a judge do it. We don'tneed a repeat of what happened to NCUA in Utah here." -

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