Missouri CU Association and Missouri Bankers Association Forced to Meet, But Unable to Find Compromise
JEFFERSON CITY, Mo. -- After five years of dealing with ongoing field of membership litigation, the Missouri Credit Union Association and the Missouri Bankers Association have been directed by the Missouri Senate leadership to reach a consensus on proposed legislation that will clarify the statutory definition of geographic areas before the January legislative session.
But after two meetings between the two sides, the MCUA says a resolution to the situation "remains elusive."
On Oct. 26, the MCUA and MBA met for the second time. The two sides exchanged draft language, but found they had "dramatically" different perspectives on the issue.
According to the MCUA, the bankers proposed adding more restrictions to geographic fields of membership. They also recommended including service to those of low income as a significant element in the purpose of CUs; Adding Community Reinvestment Act requirements were also suggested.
The most recent meeting between the MCUA and MBA followed an earlier meeting that was held Oct. 9. The MCUA said that meeting was held specifically to determine if the bankers were coming to the table in "good faith" and to exchange positions on basic credit union purpose and geographic area definitions.
MCUA's Peggy Nalls, senior vice president of public/legislative affairs, told Credit Union Times the association has been meeting with the leadership of both the Missouri Senate and House of Representatives to keep them apprised of the field of membership expansion lawsuits the bankers have brought going back to 2001.
Although state legislators have been following events, Nalls explained what changed the situation was when the Cole County Court circuit judge in March threw out the state's credit union regulation, and since the state Credit Union Commission hasn't been able to come up with another regulation it's not certain it won't face similar legislation.
"That's left the Missouri Credit Union Association in the position of having a state law that allows credit unions to expand geographically, but no regulation. Even though the state statute directs the Credit Union Commission with coming up with definitions for terms concerning geographic expansions, they were finding no toehold for developing a regulation that wouldn't be challenged in the court. It's a Catch-22 situation," said Nalls.
According to the MCUA, the positions of the two groups are "significantly divergent, as expected."
She added, however, that without a direct request from the Senate leadership, she doesn't think the dialogue would be happening. Specifically, she explained, the Senate leadership directed the MCUA and Missouri Bankers Association to reach agreement on defining the purpose of credit unions and a revision of the geographic expansion portion of the regulation to avoid future lawsuit.
The third meeting between the MCUA and bankers will be held Nov. 8 to discuss and moderate draft language.
MCUA President/CEO Rosie Holub said the association is making every effort to avoid a battle with the banks in the General Assembly in 2007.
"But we are steadfast in our resolve to pass meaningful field of membership legislation that will eliminate any further litigation in Missouri."
According to Nalls, the Senate leadership has already promised if the two sides reach a consensus, then the chairman of the Senate Financial Institutions Committee will handle the legislation and get it passed as soon as possible.
What if a consensus isn't reached by January when the state legislature convenes? Nalls said the MCUA has already decided CUs need a legislative fix to the situation. So if no consensus is reached, the MCUA will try to get legislation introduced on its own.
"It's time for credit unions to stand up and define who we are and not let banks define us," said Nalls.
There are five Missouri credit union FOM expansion cases involved in the lawsuit, and another five have agreed to be bound by it. Nalls said there are also several FOM expansion requests sitting on the desk of the director of the Missouri Credit Union Division.
"Nothing can happen to those because of the litigation. The division has been advised by its attorneys not to approve any expansion. That puts us at a competitive disadvantage," said Nalls. --firstname.lastname@example.org