BISMARCK, N.D. – 2005 has been a rocky one for North Dakota credit unions and their trade group. The latest brouhaha involving the North Dakota Credit Union League and the North Dakota Bankers Association over a newly enacted FOM law was set to surface during the December meeting of the North Dakota Credit Union Board. At issue is a disputed provision in the Aug. 1 law which seeks to restrict CU FOM rules on "immediate family members" for branch applications covering the new 75-mile limit from a CU's main office. Bankers, who are urging the CU board seek a state attorney general's opinion "to clarify the issue," argue the law, while allowing CUs the 75-mile limit, bars adding family members in any new FOM jurisdiction beyond 50 miles. Some CUs which have made applications for mergers and new facilities contend the banker complaints throw a new monkey wrench into CU plans to reach into bankless communities in the state which seek CU services. "Here's another example of how this law has handcuffed us all and how the League simply handed it to the bankers," declared Denton Zubke, president of Dakota West CU of Watford City and the most vocal critic of the 75-mile law. Last February Zubke, joined by a group of six other CUs, resigned from the league to protest its move to join the NDBA in helping draft the FOM law seen as compromise legislation to forestall a lengthy bank vs. CU court fight. The departure of Zubke and others has reduced dues and processing income to the league, which had been looking at cutbacks and reorganizing services to accommodate the loss of revenue. The North and South Dakota Credit Union Leagues are also talking consolidation again. That was the word at least from the chairman of the South Dakota League, Floyd Rummel III, who forecast "a deal by yearend along the same lines as we first tried a year ago." Originally, creation of the Mid-America Credit Union League was to start exactly a year ago but talks broke down over how to measure capital assets as well as how to handle representation on a joint board. The fact that talks resumed this fall was in itself noteworthy since it apparently reflected the overall merger trend in the industry particularly as it impacts small CUs. Combining the two leagues, which are in very rural states with a large number of small CUs, was seen by its backers a year ago as a pioneering step to achieve economies of scale. For years the leagues have shared joint meetings and item processing. -

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