ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, December 4, 1996 TAG: 9612040049
SECTION: BUSINESS PAGE: B-5 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: Associated Press
AT ISSUE IS WHO can become a member of a credit union. A decision today could affect 10.5 million members.
A legal battle challenging credit union expansion is causing an upheaval in the industry, with a federal court order forcing credit unions to turn away thousands of potential new members daily.
At issue is a long-simmering dispute over who can join a credit union. The American Bankers Association has won the latest round, with a federal appeals court earlier this summer striking down a broad interpretation of the 1934 Federal Credit Union Act that permitted a major expansion of credit union membership.
Today, U.S. District Judge Thomas Penfield Jackson will consider a motion that could force a restructuring of 3,586 credit unions, about half of all federal credit unions.
In the worst case, the judge could disrupt the banking relationships of an estimated 10.5 million people who joined credit unions under the 1982 expanded membership rules.
Mark Schaefer, president of the AT&T Family Federal Credit Union, said Tuesday he doubted Jackson will force those 10.5 million account holders to leave their current credit unions.
``I don't think Judge Jackson is going to imperil the foundation of the credit union movement,'' said Schaefer, whose Winston-Salem, N.C. credit union is at the center of the case. ``That would be totally irresponsible.''
Michael Crotty, attorney for the American Bankers Association, said the issue is simple. ``We would like them to obey the law,'' he said of the credit unions.
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