Pennsylvania Banking Department Sets Stage for CU Community Charters Hearings

HARRISBURG, Pa.- Setting up what could be a heated battle over the next few months between Pennsylvania’s credit unions and its banking community, the Pennsylvania Department of Banking on May 25 held its first but mostly procedural hearing regarding the fate of three state-chartered credit unions seeking conversion to community charters. According to the Pennsylvania Credit Union Association, the most critical issue that was addressed concerned the confidentiality of the credit unions’ conversion packages and what information bankers may see. A ruling was expected the week of May 24. “The banks are mounting a lot of pressure for disclosure,” says Rick Wargo, senior vice president/general counsel for the Pennsylvania Credit Union Association, who also is serving as counsel for two of the credit unions. “The hearing officer’s ruling is extremely important, and we have worked diligently to raise airtight legal arguments to protect the privacy of the credit unions’ business plans and marketing plans.” “The real issue here for credit unions is not about whether these charters constitute a well-defined community or if their business plans are adequate,” says Michael Wishnow, senior vice president of communications and marketing for the Association. “It’s about whether bankers have the right to intervene in a process that clearly belongs to credit unions. “In the case of Freedom CU and TruMark Financial CU [two of the credit unions involved], we’re looking at 5 million to 5.5 million potential members. I suspect that’s why we have the bankers’ attention,” Wishnow says. In accordance with state credit union law, Freedom Credit Union and TruMark Financial Credit Union (both of Philadelphia), as well as Corry Jamestown Credit Union (located in northwest Pennsylvania) have requested community charters. Freedom is seeking to expand to the five counties around Philadelphia and to three counties in southern New Jersey. TruMark is seeking to expand to the five Philadelphia counties. Corry Jamestown is seeking to expand to the rural community in a 35-mile radius around its existing headquarters. Banking Department hearings are expected to continue in late June or mid-July. [email protected]