JEFFERSON CITY, Mo. – Do Missouri's banks have standing to intervene in field-of-membership expansion decisions made by the state's Division of Credit Unions? It was up to the state's Supreme Court to decide that last week as lawyers for both sides went before the bench to present their cases. The state of Missouri, on behalf of the credit union director and commission, argues that only members of the expanding credit union, whose savings accounts could be threatened by a disastrous expansion, have standing. The notion, as expressed in a pre-hearing brief, is that the law does not protect banks against competition. "The structure (of the law) protects depositors and borrowers, not institutions nor their shareholders," state solicitor James Layton said. Amy McLard, vice president for public and legislative affairs for the Missouri Credit Union System, attended the 30-minute hearing and afterwards said she thought, "It went very well." While McLard said she thinks it is hard to draw a conclusion from questions asked by the justices, since they may just be playing devil's advocate, she thought some of the questions were telling. One justice, she said, wondered if the situation were not comparable to one barber asking state barbershop regulators not to license another barber because its shop would be close to competition. The bankers argued that Missouri law should mirror federal rulings and said that competitors can be aggrieved parties. Said bankers' attorney John Pletz: "We had a decent case, so, hopefully, we made it." The jousting began in 2000, after Springfield Telephone Employees Credit Union (now Telcomm Credit Union) submitted a field-of-membership application to expand its territory to include all residents of the 417 and 573 area code in southern and eastern Missouri, excluding St. Louis. The director of the credit union division granted the expansion only for the 573 area code. Century Bank of the Ozarks and the Missouri Bankers Association appealed the decision to the newly created Credit Union Commission. However the commission determined that banks were not an "aggrieved" party as defined in the credit union statute and did not have standing. In late 2001, the bankers took their case to the circuit court, the state's primary court. That court ruled the bankers lacked standing, so the bankers appealed that ruling too. Since then, the bankers have pressed the issue, continuing to object to FOM expansions, creating a backlog of applications. A number of similar challenges are awaiting this Supreme Court ruling. The debate was supplemented with written briefs. In addition, the American Bankers Association, CUNA and NASCUS filed friend-of-the-court briefs. McLard said she did not think that the pending litigation had a significant impact on the number of FOM expansion applications submitted to the credit union division, "but maybe some reduced the geographic area." -

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