Citing the Cost Factor, Missouri Credit Union Drops Multi-County FOM Bid

JEFFERSON CITY, Mo. – A small Missouri credit union, which might have figured in the so-called “Telcomm” field of membership case which comes before the Missouri Supreme Court this month, is dropping its bid to expand into three counties. “Our board decided that we can’t afford the attorneys fees, and so we have resubmitted our application for just one county-St. Francois, our own,” explained Donna Grant, president of the $4 million Southeast Telephone Employees Credit Union of Park Hills. The resubmission, she said, may still not escape another banker challenge-the 11th so far from the MBA in appealing state FOM rulings-before the Missouri Division of Credit Unions and its director, John P. Smith. However, Graham said, it was her understanding the MBA would have little chance of overturning an Aug. 1 FOM approval by the division for SETCU to expand its FOM beyond the city of Park Hills to all of St. Francois County. Oral arguments on the issue of banker standing in the Telcomm case named after Telcomm Credit Union of Springfield, formerly Springfield Telephone Employees Credit Union and a defendant in a Missouri Bankers Association suit brought two years ago, are to be heard Sept. 10. That suit seeking to overturn multi-county approvals granted by the state CU regulator drew amicus briefs by CUNA in July challenging banker standing to block the FOM approvals. While lower state courts in Missouri to date have sided with the credit union industry, the MBA has persisted in challenging individual FOM approvals by the Division. “This is the kind of thing from the bankers that is never ending,” lamented Peggy Nalls, senior vice president of public legislative affairs for the Missouri Credit Union Association which also was named as defendant in the Telcomm suit along with the state Division of Credit Unions. Smith said there have been some 60 FOM applications that have come before his office while the banker challenges have continued. SETCU’s application is just one example of a legitimate request of the CU to expand “into a well defined rural base” into three counties, St. Genevieve, Madison and St. Francois, to reach Southwestern Bell and AT&T employees under its common bond. But the threat of SETCU being thrown into the MBA suit apparently discouraged the Park Hills-based CU from proceeding. But a spokesman for the Missouri Association of CUs said the banking lobby is mistaken if it perceives the industry is backing down in any way. The SETCU move, said the spokesman, represents the interests of one small CU and has no bearing on the larger issue of the legitimacy of state FOM rulings and ultimate rejection of banker opposition. -