WASHINGTON — Ruling that the Pennsylvania Department of Banking failed to adequately consider input from bankers, the Pennsylvania Supreme Court has sent a lawsuit challenging the granting of community charters back to a lower court.
In a 4-1 decision, the justices ruled that the department's exclusion of the Pennsylvania Bankers Association and Pennsylvania Business Bank as interveners, "offended the most basic tenets of due process."
Those organizations had challenged the community charters granted by Pennsylvania officials to Corey Jamestown Credit Union, Freedom Credit Union and TruMark Financial Credit Union for the right to serve five counties in the Philadelphia area.
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The case will be reheard by the Commonwealth Court.
It's the second legal decision to go against Pennsylvania credit unions in recent months.
In July, U.S. District Court Judge Kane ruled that the NCUA had acted in an "arbitrary and capricious manner" and ignored contrary evidence when deciding to grant Members First Federal Credit Union a community charter. The agency, granted the other two credit unions, Americhoice Federal Credit Union and New Cumberland Federal Credit Union, community charters after its Members First decision.
The American Bankers Association and NCUA reached an agreement whereby the community charter would be vacated but the credit unions would be allowed to keep the new members they acquired under the community charter.
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