South Dakota CUs Steer Clear of Banks' Attempt to Stop Competing Bank Expansion

RAPID CITY, S.D. – Maybe banks should learn to stay out of credit unions’ business the way credit unions stay out of banks’ business? There’s another example of just that here in Rapid City. Watching from a distance with some interest, credit unions here chose not to step into the fray of a claim brought against BankWest Inc. by four area banks claiming the $300 million institution’s newest branch would impede on an already crowded marketplace. At issue is BankWest’s January application to the State Banking Commission to open a branch in Rapid City, home to 17 banks, credit unions and other financial institutions. Four area banks – Great Western Bank, First Western Bank, Pioneer Bank & Trust and Security First Bank – filed papers with the commission in the spring to stop BankWest from opening a branch but a last-minute change of consideration resulted in a withdrawal of the claim, said Dave Knudson, the banks’ attorney. “We are intending to withdraw our opposition for reasons that we plan to discuss at the hearing,” Knudson said in several published reports, but he would not comment further on the group’s reasons for withdrawing. Black Hills Federal Credit Union, one of the largest financial institutions in the area here with more than 42,000 members and $413 million in assets said it had been aware of the situation, but saw no reason to act. “It was a point of interest, but we didn’t pay too much attention to it,” said Roger Heacock, president/CEO, Black Hills FCU. “As long as we focus on serving our members well, we’re not worried about the competition.” In June, Knudson won a three-month delay that would have allowed his bank clients to conduct a study of the Rapid City market. Knudson said his clients were not convinced that Rapid City needed another financial institution. Those findings were scheduled to be disclosed at a Sept. 9 hearing. The South Dakota Credit Union League had not heard of the banks’ opposition because it did not have statewide implications said Donald Couch, president of the league. Credit Union Times left several messages with Rapid City Telco Federal Credit Union, Rapid City Medical Federal Credit Union and Sentinel Federal Credit Union, the latter serving Ellsworth Air Force Base, but no one returned the calls. Meanwhile, over the summer, South Dakota, along with Colorado, Delaware and Utah voted in favor of an amendment that requested the Financial Services Standing Committee of the National Conference of State Legislatures (NCSL) to ask Congress to permit states to impose state sales taxes on federal credit unions. The NCSL voted 15-4 to dismiss the amendment penned by banking groups. -