HARRISBURG, Pa. – In a quick decision handed down the week of June 12th, the state's Commonwealth Court ruled on arguments presented by both the bankers and credit unions concerning Belco Community CU's conversion to a community charter.
Announcing its decision, the court denied the Pennsylvania Bankers Association and member banks' request that the matter be remanded back to the Pennsylvania Department of Banking for a hearing and further review of the community charter.
The court also denied Belco and the Pennsylvania Credit Union Association's request to dismiss the matter preliminarily. Instead, the court ordered that briefs be filed and scheduled argument for the fall.
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Belco Community CU was granted a community charter in July 2005 to serve Adams, Cumberland, Dauphin, Lancaster, Lebanon, Perry and York counties.
One month later, the bankers challenged the charter conversion granted the $237.3 million CU, arguing the communities were not well defined.
The PBA also challenged the CU's tax-exempt status.
The Belco Community CU case mirrors the case involving Freedom CU and TruMark Financial CU that were also granted community charters by the Pennsylvania Department of Banking.
In March, the Commonwealth Court affirmed by a 9-0 vote Secretary of Banking William Schenck's decision to approve the FOM for Freedom CU and TruMark Financial CU that was originally granted in 2003, and dismissed the bankers' challenges.
In April, the bankers filed an appeal on the taxation portion of that case with the state Supreme Court.
Earlier this month, the state Supreme Court agreed to a request by the PBA and several area banks to review the tax status of credit unions in the state. The Pennsylvania Commonwealth Court already ruled in favor of the Pennsylvania Banking Department, Freedom CU, Trumark Financial CU and the PCUA that the state's credit union tax status is consistent with the Pennsylvania constitution. The Commonwealth Court tossed out three out of four tax-related questions raised by the bankers. While the fourth question remains before the Commonwealth Court, the state Supreme Court will hear the three other questions.
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