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JEFFERSON CITY, Mo. – The Missouri Credit Union Association and the state’s Division of Credit Unions are disappointed but not surprised the state Supreme Court denied a petition to rehear a case that gives bankers standing to challenge field-of-membership expansions approved by the Missouri Division of Credit Unions. Amy McClard, vice president of public/legislative affairs for the Missouri Credit Union Association said the decision to petition the Supreme Court to rehear the case involving Telcomm Credit Union – formerly Springfield Telephone Employees CU – was “basically standard procedure,” adding that the Supreme Court doesn’t reverse its decision and grant a rehearing very often. Credit Union Division Director John Smith said he too wasn’t surprised, and he noted that attorneys he consulted with had informed him it was “rare” for the state Supreme Court to grant a rehearing. Nevertheless, Smith said it was “unfortunate the delay has occurred because it prevents Missouri citizens from having a choice of the financial institution they want to belong to.” On Dec. 9, the Missouri Supreme Court upheld bankers’ right to appeal a decision by Smith to allow Telecomm to expand its field-of-membership to include people who live or work in the 417-telephone area region which Smith said includes “several” counties. The case now goes back to the Cole County Circuit Court which previously found the bankers lacked standing to seek a judicial remedy for the FOM expansion decision. A status conference will be held March 5 with Telcomm CU’s attorney Jim Deutsch before Judge Richard Callahan of the Cole County Court “to gain an idea of how the Court will proceed,” said McClard. In mid-2000, Springfield Telephone Employees CU applied with the Division of Credit Unions for permission to expand its FOM to include people who work or live in the 417 and 573 area codes. Smith only approved the CU’s FOM expansion for the 417 area code “because I didn’t think they met the test to be able to serve the 573 area code also,” he said. “Contrary to what some people may think, I don’t automatically approve every field-of-membership expansion application that comes across my desk,” he said. The Missouri Bankers Association and Century Bank of the Ozarks appealed Smith’s decision in November 2000, but Smith pointed out that the Springfield Telephone ECU case was only one of three involving area or zip code FOM expansions the bankers eventually appealed. The other two concerned South Community CU and Central Communications CU. In the latter two cases, the Credit Union Commission upheld Smith’s decisions, and the MBA and local banks filed a petition for administrative review with the Cole County Circuit Court. A motion was eventually entered to stay the proceeding on the two cases until the outcome of the Springfield Telephone Employees CU case was decided. Smith said to the best of his knowledge, no freeze had been ordered on Telecomm from taking in new members from the expanded FOM pending the court’s decision. He explained that once the Credit Union Commission upholds a decision by the director of the Division of Credit Unions, the director files the bylaw change with the Secretary of State, and then when they’re approved, with the credit union. That signals to the CU it is allowed to expand its FOM and begin taking in members. “The law is silent during an administrative review, on whether a credit union can or cannot expand its field-of-membership,” said Smith. -

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