X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

RICHMOND, Va. – The case involving the Virginia Bankers Association’s appeal of a decision by the state commissioner of the Bureau of Financial Institutions approving DuPont Community Credit Union’s application to expand its community field-of-membership to five counties and five cities in the Shenandoah Valley, has reached another milestone. The Virginia Credit Union League on Oct. 3 filed its brief in the case, meeting the mid-November deadline. Three other interested parties – DuPont CCU, the BFI, and the VBA – also filed briefs. It’s been a little more than a year since the Virginia Bankers Association appealed the decision by state Commissioner Joe Face in May 2002 to allow DuPont Community CU to expand its FOM. The VBA filed its appeal one month later on June 7 in a case before the State Corporation Commission. The VBA’s appeal revolved around the issue of whether DuPont CCU’s charter was too large to qualify as a “well-defined local community, neighborhood or rural district” as stipulated by Virginia law. According to NASCUS, the VBA argued that a lack of common interests existed between the communities as demonstrated, for example, by their lack of shared government facilities, lack of a common trade area, lack of a regional hospital. The VBA also cited a 1999 amendment to the Virginia Credit Union Act that adds the word “local” to “well-defined community” as proof of the state legislature’s intent to restrict credit union fields-of-membership. Countering the VBA’s arguments, the Virginia Credit Union League, DuPont Community CU, and the BFI argued that the VBA lacked standing to bring the complaint. They also argued that the counties and cities in question in DuPont’s FOM constitute a local community as proven by the existence of a district planning commission and partnership spanning the area of the proposed FOM. The BFI further cited the clause “in its discretion” in the state Credit Union Act to demonstrate that the state legislature granted broad authority to the BFI to evaluate proposed FOM applications. When the Commission upheld the BFI’s authority to grant and expand community charters for state-chartered credit unions, the VBA took its appeal to the Virginia Supreme Court. DuPont Community’s FOM now includes 260,000 residents in five counties and six cities which share strong economic and social ties. The $388.7-million CU has more than 38,500 members. At press time, the VBA had 14 days to respond to the briefs filed by the Virginia League and the Virginia Bureau of Financial Institutions. The League said the case could be argued before the Virginia Supreme Court as early as the last week of October or as late as January 2004. The DuPont Community CCU case is the most recent, but not the first, case stemming from the Virginia Bankers Association’s challenge of the Virginia BFI’s authority to grant community charters. In August 1997, the VBA asked the State Corporation Commission to limit state-chartered credit unions to a single common bond and to ban community charters altogether. The Commission ruled in April 1998 that the state’s credit union law did not permit SEGs, which the BFI had been granting, following NCUA’s lead. The Commission, however, upheld the BFI’s authority to grant community charters. According to BFI, as of the publishing of its Summer 2002 quarterly newsletter, there were eight state-chartered CUs in Virginia with community FOMs. In the 1999 legislative session, the Virginia General Assembly passed parity legislation that was signed in to law by Gov. Jim Gilmore on March 9, 1999. That law gives Virginia SCCUs parity with federal credit unions on the issue of multiple common bonds. Virginia League President/CEO Rick Pillow described the case as “a critical issue as far as parity between state and federal charters, and we want our credit unions to know that we want our credit unions to know that we are fighting to preserve a viable dual-chartering system in Virginia.” He said the League “firmly believes that the Bureau is well within its authority to grant new community charters or expand existing ones.” -

This premium content is locked for
Credit Union Times subscribers only.

Already have an account?
Interested in customizing your subscription with Law.com All Access?
Contact our Sales Professionals at 1-855-808-4530 or send an email to groupsales@alm.com to learn more.

Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.

Already have an account? Sign In Now
Join Credit Union Times

Copyright © 2019 ALM Media Properties, LLC. All Rights Reserved.