BISMARCK, N.D. - In a compromise with the banking lobby after years of wrangling, state-chartered credit unions in North Dakota will be operating under a new field of membership law which limits branch openings to 75 miles from their main office. The FOM statute, effective Aug. 1, codifies existing rulemaking but with new restrictions limiting so-called "leapfrogging" which one Bismarck attorney said forestalls the threat of an FOM suit in a repeat of Utah litigation against NCUA brought two years ago by the American Bankers Association. "We didn't want a federal judge dictating what is a well-defined urban or rural district in North Dakota," explained Greg Tschider, legal counsel and lobbyist for the North Dakota Credit Union League. The FOM law signed by Gov. John Hoeven, a Republican, grandfathers existing FOM branches beyond the 75 limit but eliminates an old rule permitting CUs to set up a facility 50 miles from an existing branch, an issue which aroused the ire of the North Dakota Bankers Association. "This is something that both banks and credit unions can live with," declared Tim Brown, chairman of the League and president of Dakota Plains CU, Edgeley. The threat of a lawsuit similar to the ABA complaint ruled on last December by U.S. District Judge Dale Kimball of Salt Lake City finding a group of Utah CUs had overstepped their reach in a six-county expansion helped prompt a decision by the North Dakota League Board to reach a FOM compromise, said Tschider NCUA, joined by CUNA as well as NAFCU as intervenors, had decided not to appeal the ruling which effectively remanded the six-county approvals back to the agency for review. Some Utah CUs have said they do plan to resubmit their applications but with limited FOM. Brown said North Dakota CUs understood the need to find common ground with bankers agreeing with the Tschider recommendations adding "that's why we hire legal counsel" to provide that kind of advice. The decision to move ahead with a compromise statute was made several months ago and the measure was passed by the legislature without fanfare, said Brown. Tschider said for years the issue before the State Credit Union Board has been "what is a well-defined urban and rural district and on that no one knows the answer" citing debates about whether the district stops at city limits or the county line. "To me we don't want to ask a judge like they did in Utah to determine" the definition, said Tschider. "We have no desire to have a judge do it. We don't need a repeat of what happened to NCUA in Utah here." -

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