WAYNESBORO, Va. -Given the reactions of other states' bankers associations to their state-chartered credit unions' field-of-membership expansions, Gerald Hershey, president/CEO, DuPont Community CU saw the Virginia Bankers Association's challenge of his credit union's approved FOM expansion last year by the Bureau of Financial Institutions as being `almost a sure thing.' Now that the Virginia Supreme Court has agreed to hear an appeal from the VBA on the BFI's decision, Hershey is gearing up for a fight and keeping his options open for dealing with the situation if the Supreme Court rules in the bankers' favor. At press time, it had not been disclosed what issues the VBA's appeal would focus on, but Hershey suspected they will concern whether or not DuPont's FOM is too large to qualify as a `well-defined community.' Hershey is confident it does meet the qualifications because of the criteria the credit union used. Prior to filing its field-of-membership expansion application in January 2002, DuPont Community CU's FOM included the more than 97,000 residents of Augusta County and the cities of Waynesboro and Staunton. The CU's FOM expansion application would add to that four counties – Rockingham, Rockbridge, Bath and Highland – and three more cities – Harrisonburg, Lexington, and Buena Vista – for a total potential membership of 260,000. Shortly after the $363.4-million credit union filed its FOM expansion application with BFI, Hershey said he was asked to meet with State Banking Commissioner Joe Face to discuss the document the credit union filed. Hershey recalled the commissioner "gave the impression" he wanted to approve the application, but Face asked Hershey to provide him with more information "to make the case for the `defined community' stronger." Hershey said "it was clear in the supplemental application we filed that we had identified a well-defined local community because it was the same boundaries used by the planning districts in Virginia as a defined local community." In addition, said Hershey, the Central Shenandoah Valley Partnership identifies the same region as defined local community. Face approved DCCU's application in May 2002. Shortly afterwards, the VBA challenged Face's decision, but the State Corporation Commission upheld the BFI's authority to grant community charters for state-chartered credit unions. The VBA appealed that decision with the Virginia Supreme Court. This is actually the second time DuPont Community CU has had to deal with challenges from the VBA. In 1997, when the then SEG-based Martinsville DuPont CU filed and was approved for a community charter, the bankers tried to get that decision reversed and filed a petition with the SCC. The SCC upheld the BFI's decision. This time, the VBA has taken their appeal to the Virginia Supreme Court, and Hershey said "as far as he was aware," this was the first time a credit union field-of-membership issue has gone to the state Supreme Court. Since DuPont's FOM expansion was approved last year, Hershey said the credit union has been adding about 30 members a month from the additional counties and cities. So far, though, the credit union has no physical presence in the area, although Hershey said the CU plans to build branches. For now though, while the Supreme Court is still out with its decision, Hershey said those plans have been put on hold. If the Virginia Supreme Court decides in favor of the bankers, Hershey said DuPont Community CU "will have to explore other charter options," including possibly converting to a federal charter. "Our responsibility is to remain financially viable and to provide choice to people in the areas we serve to belong to a credit union," said Hershey. Meanwhile, Rick Pillow, president/CEO of the Virginia Credit Union League said the league plans to file a brief with the Virginia Supreme Court on behalf of the Bureau of Financial Institutions and DuPont Community CU in support of Commissioner Face's decision that he acted properly. Pillow said the issue is also a field-of-membership parity issue for federal and state-chartered credit unions in Virginia as SCCUs were granted by the parity bill that was signed in to law by former Gov. Jim Gilmore and took effect July 1999. Pillow expects the briefs to be filed by September or October. "The Bureau of Financial Institutions made the right decision based on how the law is written," said Pillow. [email protected]