HARRISBURG, Pa. — In the latest chapter of the case concerning the challenge by the Pennsylvania Bankers Association against a community charter conversion approved by the Pennsylvania Department of Banking for Belco Credit Union, attorneys for the credit union and the bankers, and the deputy chief counsel for the Department of Banking, presented oral arguments last week in the Pennsylvania Commonwealth Court.
According to the Pennsylvania Credit Union Association, the oral arguments focused on the issue of community chartering. Key issues included whether the bank groups have legal standing to intervene in matters subject to the state Credit Union Code, the department of banking's procedures and the way it reviewed community charter conversions, and the extent to which outside third parties can obtain access to the documentation submitted to the department in connection with a community charter application. PCUA Senior Vice President Communications and Marketing Mike Wishnow said each side was given 15 minutes to present its case. Presenting for the department of banking was Linda Carroll, deputy chief counsel; Frank Crowley, an attorney with the law firm of Blank Rome presented for Belco.
Ray Tepe of Kirkpatrick Lockhart presented for the bankers.
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The case in question, like the community charter case decided earlier this year concerning two other Pennsylvania credit unions (Freedom Credit Union and TruMark Financial Credit Union), consists of a banker challenge to a community charter conversion and a challenge to the constitutionality of the credit union tax status.
Although PCUA was not named in the bankers' original suit, the association joined in the lawsuit in support of Belco and the department of banking.
The Belco CU case was initially set aside pending a decision by the Commonwealth court on the Freedom CU and TruMark Financial CU case. When the Commonwealth Court ruled in favor of the CUs on the community charter issue and three of the four tax counts the bankers raised in that case, the bankers asked that the stay on the Belco case be lifted.
In June, the Commonwealth Court denied requests by the Pennsylvania Bankers Association and member banks that the matter be remanded back to the Pennsylvania Department of Banking for a hearing and further review of that community charter which Belco was granted in July 2005.
The court at that time also ordered that briefs be filed and scheduled oral arguments which were eventually heard Sept. 11. Those arguments centered entirely on the field of membership portion of the litigation.
According to PCUA Executive Vice President/General Counsel Rick Wargo, the three-judge panel asked some pointed questions of the department of banking regarding the process it used to make its decision to approve Belco CU's community charter application.
"The department of banking is standing by its process, and we are supporting its process," said Wishnow, adding that the PCUA is hopeful the court will announce its decision within the next several weeks.
"Unless the court tells us otherwise, Belco has a community charter and can continue to serve its community and its business plan," he said.
"The department of banking realized that the yearlong administrative process it took in the case of Freedom CU and TruMark Financial CU was unwieldy, and all of the arguments for and against community chartering were thoroughly heard. The department made every effort to give the bankers every benefit of the doubt regarding due process which resulted in a yearlong case. It's unduly burdensome to have a yearlong process every time a community charter application is considered," Wishnow added.
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