Kentucky CU Readies Blocked FOM Bid After High Court Ruling
After being in a court-ordered field of membership limbo lasting six years, one Louisville, Ky. CU said it stands ready now to finally sign up new members and expand services in one of its suburban branches.
"We're really pretty excited that once the 30-day venue is lifted, we can get final approval and go ahead with expansion at our Shepherdsville branch," said Jeff Roberts, president/CEO of the $41 million Beacon Community CU, one of six Kentucky CUs party to a long-running FOM case in state courts culminating in last week's Kentucky Supreme Court ruling favoring CUs.
Joining Roberts in readying the application process on community charters, first stalled in 2004 and followed up with banker-backed state court suits two years later, is Charles Vice, commissioner of financial institutions.
"We have Beacon's application which apparently is the first now to seek the bylaw change," Vice told Credit Union Times.
Roberts said the Shepherdsville branch opened to take advantage of its 2004 community charter has had to severely limit its operation, turning away potential members because of court rulings.
Acting on a 2006 suit brought by the banking lobby, the Kentucky high court sided with CUNA and the Kentucky Credit Union League in their claim that the state's FOM laws upheld the authority of the Department of Financial Institutions to grant FOM community charter expansion to the six CUs. The American Bankers Association and its Kentucky affiliate had challenged the 1984 law and previous statutes as lacking status and barring community charters based on NCUA's "well defined" common bond language. Aside from Beacon, officials said they expected a number of the other six defendant CUs would now re-apply to the state to reactivate their community charter applications.