FRANKFORT, Ky. — Credit union field of membership under challenge in a case being heard this week before the Pennsylvania Supreme Court is also subject of litigation before a county court here, in a suit now a year old and brought by the Kentucky Bankers Association against the state CU regulator.
The Kentucky Credit Union League vowed today to defeat this latest legal assault on the CU common bond filing an amicus brief on Tuesday supporting the right of the Kentucky Office of Financial Institutions to grant FOM expansion to six Kentucky CUs.
With appeals likely, Kentucky attorneys said the case could eventually end up in the Kentucky Supreme Court regarding "community based" FOM expansion for state CUs.
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Since the suit was first brought against the state agency in May 2006 by Home State Federal Savings & Loan of Ashland, the Kentucky League has sought to dismiss the complaint on grounds state statutes dating back to 1984 give state CUs clear power to expand on "general interest" common bonds.
Last year the bankers trade group asked the Franklin County Circuit Court for a declaratory judgment against OFI charging the agency should be following federal FOM rules and had acted "beyond its statutory authority" by approving "geographic" or "community based" FOM for the CUs.
The CUs party to the case include: Members Choice, Ashland, KY; C & O United, Edgewood; Service One, Bowling Green; Beacon, Louisville; GTKY, Lexington; and Kentucky Employees, Frankfort.
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