CU Times 25: From the June 4, 1990 issue of CU Times

AUSTIN, Texas – A Settlement has been reached that severs four of the six credit unions from a contested case over field of membership expansion in and around Dallas County.

The agreement, a divvying-up of some of the disputed territory, lets the four CUs pursue, through routine approval processes, specified non-overlapping areas for community FOM status. The areas, reduced in size from the CUs' original requests are eliminated from the expansion requests of the case's two major contenders, Dallas Teachers and Community CUs. Now those two must reach an agreement with the Texas Credit Union Department on the issue of FOM overlap in still contested territories.

Severed from the case were City Employees, FFE Operators, Gifford Hill and Texas Industries Credit Unions. In the settlement, the four credit unions agreed to exclude FOMs of occupational and associational credit unions with offices in any county in which the expansion area would be situated. The Texas CU Department agreed to recommend to the state CU Commissioner that the applications from the four credit unions be granted; and the revised requests of the four credit unions are to be republished and handled routinely, wit no hearing unless requested.

The major battle remains between the $367 million Dallas Teachers Credit Union, which currently serves school employees in three counties, and Community Credit Union, with $204 million in assets and broad-based charter covering much of North Dallas County and neighboring areas.

The severance was granted May 22 in a pre-hearing at the Credit Union Department office in Austin, at which time the hearing to decide the original issue of overlapping FOMs-delayed several times since its first setting last November-was again postponed. A date was not set. The delay was requested by Community CU primarily on the grounds that the scope of the case had changed with the severance. Dallas Teachers CU objected to the delay, saying the nature of the case had not been altered.

Community CU also received permission, over Dallas Teachers' objection, to obtain a deposition from Dallas Teachers' board chairman Frances Welch. Dallas Teachers' attorney Jerry Nugent, speaking for the CU at the meeting, said a deposition of the board chairman would be” unduly oppressive and harassing.”

Attorney Norton Duncan, representing Community, argued that the chairman has “information relevant to this” and knowledge about “planning and foresight.”

Dallas Teachers CU, whose original request was filed in April 1989, is seeking a conversion to a community charter with service to 10 suburban cities and to Collin County north of Dallas. Collin County and six of those cities are currently served by Community CU. After Dallas Teachers filed, Community CU asked for a five county area and the other four credit unions filed for community status in various suburban areas. As a result, the six contenders created FOM overlaps that, by law, the state CU Commission must consider before granting any expansion.

With the four credit unions now agreed to the divvying-up of territory among themselves in the southern Dallas County area, the densely populated and largely affluent northern segment is a primary focus of the expansion dispute between the two contending credit unions. One key section of North Dallas sought by Community CU is singled out in the severance agreement for possible proceeding as a separate case.

This hearing represents the first-ever contested FOM case among Texas credit unions, but new state CU commission rules may signal a trend. Formerly the commissioner was not obliged to provide prior notice of expansion requests. Now, as part of a mandate to consider overlap, a CU requesting expansion must identify any CUs that would be affected by overlaps; and the commissioner must notify those CUs individually and must publish the application.

These rules were not in effect when Community CU was approved for major expansions, without exclusion of existing FOMs, in 1987. In 1988 with a further expansion, the CU excluded, for eth newly requested areas only, employees of companies served by CUs having offices in the areas at the time of the expansion approval. The geographic area of Community's charter represents a population of several hundred thousand. The contested case instigated by Dallas Teachers' filing, while protecting local occupational and associational FOMs, forces the question of community FOM protection by the CU's request of expansion with community charter status into areas already allocated to Community.

For the case, Texas CU Commissioner John Hale appointed an independent hearing officer, Nancy Ricketts, who has been authorized to make recommendations, but Hale is retaining authority to make the final judgment. Deputy Commissioner Robert Rogers is appearing for the CU Department in the case and is represented by state Assistant Attorney General Everett Jobe.