CUNA & AFFILIATES LEGAL DIVISION

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Eric Richard
General Counsel
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The following is an update by state of federal and state court litigation brought by the bankers regarding credit union field of membership expansions. To date, twenty court cases have been filed involving credit unions in fourteen states: California, Colorado (two cases), Florida, Maine (two cases), Michigan, Missouri, Montana, Nebraska, North Carolina, Tennessee, Texas (three cases), Utah, Virginia and Wisconsin. In addition, two Nationwide injunctions involving all federal credit unions have been filed in the District of Columbia. The first case (Nationwide 1996) arose out of the AT&T lawsuit where the bankers sought to prohibit the NCUA from permitting multiple groups in one field of membership. The most recently filed case (Nationwide 1999) involves the American Bankers Association's January 8, 1999 complaint for declaratory and injunctive relief against the NCUA based on promulgation of IRPS 99-1 after enactment of the Credit Union Membership Access Act.

As of this date, cases in California, Colorado (both), District of Columbia (the Nationwide 1996 case), Florida, Maine (both), Michigan, Missouri, Montana, Nebraska, North Carolina, Tennessee, Texas (all three cases), and Virginia have been fully resolved in favor of the credit union and/or the regulator. The Wisconsin case was withdrawn prior to any court ruling. Since the last update, the D.C. District Court judge denied the bankers' Application for Preliminary Injunction in the Nationwide 1999 case. Also, the Utah legislature passed an amendment to the Credit Union Act that partially resolved some of the issues being litigated. The details on both of these pending cases are summarized below.

NATIONWIDE 1999 - Federal Court/All Federal Credit Unions

On January 8, 1999, the American Bankers Association filed a complaint against the NCUA for declaratory and injunctive relief in the U.S. District Court for the District of Columbia. The ABA is challenging IRPS 99-1, promulgated and approved by the NCUA on December 17, 1998, on the grounds that it violates the FCUA by (1) expanding multiple, single and community common bond FCU membership beyond the limits intended by Congress, (2) defining immediate family and household member too broadly, and (3) grandfathering certain persons' eligibility for membership in existing FCUs. The complaint also claims that the NCUA violated the Administrative Procedure Act by making IRPS 99-1 effective less than 30 days after its publication in the Federal Register. The ABA is seeking an injunction to enjoin NCUA from approving any new FOM applications or taking any other actions based on IRPS 99-1.

On January 15, 1999, CUNA and NAFCU intervened in the lawsuit. CUNA argued that the ABA's lawsuit is without merit and an attempt to harass and intimidate consumers from joining FCUs. On January 20, 1999, the ABA filed a reply brief and also the Independent Bankers Association of America intervened. On March 1, 1999, a hearing was held on the issue of granting the bankers' preliminary injunction. On March 10, 1999, the court denied the bankers' application based on finding that the bankers' failed to meet their burden of proving how the voluntary-merger rule threatens irreparable injury to banks. On March 26, 1999, the court granted Irondequoit Federal Credit Union's petition to intervene in this lawsuit on the side of the bankers. Irondequoit is a small Rochester, New York credit union that is concerned about the treatment of overlaps under the new rule. The ABA is paying for Irondequoit's legal fees.

April 8, 1999 is the deadline for the NCUA to file an answer to the complaint or a dispositive motion. No other court dates are pending at this time. The discovery schedule is yet to be determined.

NATIONWIDE 1996 - Federal Court/All Federal Credit Unions

Current Status of Case: On September 1, 1998, the NCUA, CUNA and NAFCU filed an unopposed motion to vacate the district court order and remand the case to the district court with an order to dismiss the actions and also to dismiss the appeals in the consolidated actions. On October 14, 1998, the court of appeals entered an order vacating the case to the district court. On October 15, 1998, Judge Jackson entered an order of dismissal.

Case History: The history of this litigation on the merits is discussed in the North Carolina section below. Here's the history of the appeal on the issue of relief. In early October 1996, the American Bankers Association, the Independent Bankers Association of America and America's Community Bankers filed a lawsuit in the D.C. federal district court challenging NCUA's multiple group policy directly and seeking nationwide relief. Specifically, the bankers sought to have the AT&T decision applied to all federally chartered credit unions with multiple groups. CUNA and NAFCU intervened as defendants.

The case was assigned to Judge Jackson who also was deciding the relief in AT&T (see North Carolina below). On October 25, 1996 Judge Jackson signed an order that: (a) consolidated the Nationwide and AT&T cases; (b) prohibited NCUA from adding new groups to a federally chartered credit union which are unrelated to the credit union's core occupational or associational membership group; and (c) declared that those credit unions should not add members from existing groups that are unrelated to the core group. NCUA, CUNA and NAFCU appealed Judge Jackson's injunction to the D.C. Appeals Court, which held off any decision on that appeal pending the Supreme Court decision.

In addition to appealing Judge Jackson's nationwide injunction, NCUA, CUNA and NAFCU also asked the D.C. Appeals Court to temporarily stay the injunction while it considered the appeal. On December 24, 1996, the D.C. Appeals Court granted part of the motion for a stay, permitting federal credit unions to add members from previously approved groups. That partial stay remained in place during the U.S. Supreme Court's consideration of the AT&T case.

With the U.S. Supreme Court issuance of its decision in the AT&T case (see North Carolina below), the appeal in this case was set to proceed. The credit union parties were prepared to argue that the bankers had waited too long to file this suit, not directly challenging the 1982 multiple group policy until 1996, and were not entitled to equitable relief.

Legislative support for H.R. 1151 gained more momentum; however, the parties postponed filing of briefs until resolution of the bill. When the Senate passage of H.R. 1151 on July 28, 1998 was swiftly followed by its enactment on August 7, 1998, this case became moot. On September 1, 1998, the credit union parties filed a motion to dismiss which was unopposed by the banking parties. As of October 15, 1998, this case was dismissed by Judge Jackson.

CALIFORNIA - Federal Court/Point Mugu FCU

Current Status of Case: With the enactment of H.R. 1151, the issues involving the bankers' divestiture request, protection of Point Mugu's current members and the "once a member, always a member" policy were legislatively resolved in favor of the credit union. However, questions remained as to the bankers' pursuit of their allegations involving the approval of Ventura County as a "community" and ECOA violations. It remained unclear for a short time whether the bankers would voluntarily dismiss the action in total. On September 8, 1998, the banking parties, with the credit union parties' support, filed a Stipulation for Dismissal. The court subsequently allowed the stipulation to be the dispositive filing.

Case History: On October 6, 1997, the same day that the AT&T case was argued in the United States Supreme Court, the American Bankers Association and the California Bankers Association filed suit in the D.C. District Court against NCUA regarding Point Mugu Federal Credit Union's 1997 conversion from a multiple group to a community charter covering Ventura County. The bankers claimed Ventura County is not a well-defined community.

The bankers also raised two other issues: (1) they claimed that the NCUA's description of Ventura County as predominantly white and middle class means that NCUA and Point Mugu were redlining and violating the Equal Credit Opportunity Act (ECOA), and (2) they appeared to attack the "once a member, always a member" policy, at least in the context of conversions from one type of charter to another.

The case was originally assigned to Judge Jackson, the same judge who was hearing the AT&T case. In early December, the NCUA responded with a motion challenging the bankers' request that the Point Mugu case be assigned to Judge Jackson, arguing that it was not a related case. Judge Jackson granted that motion and the case was reassigned to Judge Penn. CUNA, NAFCU, the credit union, IBAA and CBA were granted the right to intervene in the case.

As in the other federal cases, the legal proceedings were periodically suspended by the pending H.R. 1151 legislation. Once the bill was passed and enacted, a favorable outcome for Point Mugu on most of the key issues was assured. The bankers, however, chose not to pursue any of their allegations and filed a Stipulation for Dismissal, with the support of the credit union parties. An order of dismissal of this lawsuit is expected to be granted by the court.

COLORADO - State Court/Gates Credit Union and Longs Peak Credit Union

In late December 1995, five banks, the Independent Bankers of Colorado and the Colorado Bankers Association filed suit against the Colorado Financial Services Board and Gates Credit Union. The lawsuit appealed the Board's November 1995 decision to approve the request of Gates Credit Union to expand its field of membership. Gates had originally served the employees of Gates Corporation and its affiliate companies. It sought to add a new community field of membership covering the south Denver metropolitan region. The bankers claimed, among other things, that the approved expansion was not a well-defined community under Colorado law and that Colorado law did not permit combinations of unlike (in this case employee groups and community) common bonds in one credit union. On January 31, 1997, the Denver County District Court dismissed the case, finding that the regulator's approval of the community field of membership was appropriate under Colorado law.

The bankers then appealed to the Colorado Court of Appeals. Both the Gates case and Longs Peak Credit Union case (with issues similar to those in Gates) were argued April 14, 1998 before the appeals court. In an unusually fast turn-around time (May 14, 1998), the court issued its decisions in both cases. A lengthy opinion was rendered in Gates with the court unanimously affirming the lower court's decision upholding the Colorado Financial Services board's approval of Gates' expansion. The opinion sets forth a broad interpretation of Colorado's common bond statute, allowing credit unions to mix common bonds of employment and community charters. The decision also makes clear that community charters can be defined socially, politically, economically or geographically and can include populations that exceed 25,000 inhabitants. The decision issued by the appeals court in Longs Peak is unpublished but affirms the lower court's decision for the reasons stated in the Gates decision.

The bankers filed a petition for rehearing, which was denied on June 18, 1998. The bankers had until July 20, 1998 to appeal the decision to the Colorado Supreme Court. No appeal has been filed; therefore, the decision of the Court of Appeals is final.

FLORIDA - State Court/All State-Chartered Credit Unions

On August 26, 1997, the Florida Bankers Association filed an appeal in the 1st District Court of Appeals (Tallahassee) on the Final Order issued by the Florida Department of Banking and Finance denying the bankers'request that a rule be issued prohibiting multiple groups from joining state-chartered credit unions. The Florida bankers claimed that the membership statute is narrower than the FCUA because the terms limited field of membership and defined group are singular. In addition, the bankers specifically cited the AT&T case as having a restrictive impact on daisy chaining of state-charters.

In its July 28, 1997 final order, the state regulator concluded, however, that AT&T is inapplicable because the Florida statute was rewritten in 1980 to expand upon the former common bond provision which more closely paralleled the FCUA, and that the current language of the statute does not limit the field of membership to one single group. The regulator concluded that the statute and its legislative history are clear and unambiguous and held that adopting a rule to clarify the meaning of the statute would be redundant and contrary to rulemaking laws.

The state district court heard oral argument on March 18, 1998. On April 6, 1998, the court issued a per curiam (the whole court) decision affirming the Banking Department's interpretation of the statute. The bankers had thirty days to appeal the decision; however, they did not file an appeal. This decision, therefore, is final.

MAINE - State Court/Saco Valley Credit Union and University of Maine Credit Union

On September 26, 1994, the Maine Bankers Association filed a lawsuit in the Superior Court of Kennebec County appealing an order issued by the Maine Bureau of Banking regarding a field of membership expansion for Saco Valley Credit Union. The bankers alleged that the Bureau violated state law by, among other things, permitting Saco Valley to include multiple common bonds (both employee groups and a community) in its field of membership. Ultimately, the case made its way to the Maine Supreme Court, which, in October 1996, concluded that the statutory criteria are designed to ensure a measure of commonality among members, and that the regulator could conclude that the commonality between two fields of membership within a single well-defined community is equal to the commonality within each separate field. The Maine Bankers Association had also filed a second lawsuit against the Bureau on November 3, 1994, complaining about the Bureau's approval of a request by the University of Maine Credit Union to add the employees of Print Mail of Maine, approximately 40 employees, to its field of membership. In that case, the same judge had ruled that the bankers did not have standing to sue and, therefore, dismissed the case. The bankers did not appeal this decision and it is, therefore, final.

MICHIGAN - Federal Court/Portland FCU

Credit unions scored a significant victory on December 5, 1994, when the Sixth Circuit Court of Appeals issued a decision affirming the NCUA's grant of a community field-of-membership expansion for Portland Federal Credit Union. The bankers chose not to appeal this case to the U.S. Supreme Court. The appellate decision, therefore, is final.

MISSOURI - State Court/Mid-Missouri Credit Union

On July 7, 1997, the bankers launched a new type of legal attack: two credit union members filed a lawsuit against the Missouri regulator and Mid-Missouri Credit Union. They claimed that Mid-Missouri's current field of membership, which includes multiple groups and community areas, violates the Missouri credit union laws, and that unlawful field of membership harms them in some unspecified way as members of the credit union. They also claimed that they were harmed as taxpayers of the State of Missouri.

After the bankers amended their complaint several times, the credit union filed a motion to dismiss based on standing and other procedural matters. However, on April 15, 1998, while the parties were preparing briefs and conducting discovery, the Missouri House and Senate passed H.B.1323 which is a compromise bill between the credit unions and bankers. This bill, which went into effect August 28, 1998, grandfathers all multiple group credit unions, whether a combination of SEGs and/or community charters, that were in existence or in a charter-applied-for status as of April 1, 1998. In addition, the bill addresses the criteria for future credit union chartering and field of membership guidelines. Because of the passage of the bill, the parties agreed to dismiss the case and, on June 9, 1998, an order was entered to that effect. The Missouri Governor signed H.B. 1323 into law on July 9, 1998.

MONTANA - Federal Court/Missoula FCU and All FCUs with Community Charters

On September 16, 1993, the Financial Institutions for Tax Equality (FITE), a group of six Montana banks and one thrift, filed suit in a Missoula, Montana, federal district court against NCUA over its past approvals of field of membership expansions for Missoula Federal Credit Union. The complaint sought to rescind all expansions granted the credit union since 1974. FITE's suit also sought to permanently prohibit NCUA's ability to approve membership expansions for credit unions beyond their primary occupation or association common bond, or expansions that don't adhere to a well-defined neighborhood, community or rural district. Missoula Federal Credit Union was chartered in 1956 to serve city and county employees. However, the credit union eventually added select employee groups, and in 1981 obtained a community charter covering one county and part of another. The most recent expansion added part of a third county to the community-based field of membership.

After the court found that the banks had standing, the bankers filed a partial Motion for Summary Judgment on September 26, 1995. The judge referred the case to a magistrate, who issued a proposed decision and order in favor of NCUA and the credit unions in September 1996. The district court judge heard oral argument on November 19, 1997. On February 27, 1998, based on the U.S. Supreme Court's ruling in the AT&T case, the bankers filed a Notice of Recently Decided Authority. Shortly thereafter, the bankers filed a Motion to Strike certain defenses related to prior rulings issued in this proceeding based on the AT&T decision. CUNA and the credit union filed responses to the bankers' motion on March 26, 1998.

On June 17, 1998, U.S. District Court Judge Charles Lovell denied the bankers' partial summary judgment motion, granted the credit unions' motion and dismissed the action. The bankers had until August 17, 1998 to file an appeal with the 9th Circuit Court of Appeals. Since no appeal was filed by this date, the decision of the district court is final.

NEBRASKA - State Court/Western Heritage Credit Union

On October 18, 1993, the Nebraska Bankers Association and two western Nebraska banks filed suit in state court seeking a reversal of a field of membership expansion for Western Heritage Credit Union, a state-chartered credit union with a community field of membership. The suit named the Department of Banking and Finance, its director, James A. Hansen, and Western Heritage Credit Union as defendants.

The Nebraska credit union act permits community-based fields of membership only under a "wild card" provision that refers to federal credit union law. In light of that, CUNA, together with the Nebraska Credit Union League & Affiliates, filed a friend-of-the-court brief on the issues of community fields of membership under federal law and deference to the regulator under state law.

On February 7, 1995, the judge upheld the regulator's approval of the field of membership expansion, concluding that the credit union had satisfied the common bond requirement by showing that the Nebraska Panhandle is a well-defined community or rural district. The bankers chose not to appeal the judge's decision; therefore, the decision is final.

NORTH CAROLINA - Federal Court/AT&T Family FCU

Current Status of Case: See Nationwide discussion above for current procedural status of this case.

Case History: In 1990, the American Bankers Association and four North Carolina banks challenged NCUA's permission for AT&T Family Federal Credit Union to take in small employee groups not related to the telephone industry. CUNA and AT&T Family FCU intervened as defendants. After NCUA, CUNA and the credit union were unsuccessful on the issue of standing, the case was sent back to the district court for trial on the merits.

The D.C. District Court judge heard arguments on the merits on September 9, 1994, and issued a decision less than a week later. In his decision, Judge Pratt concluded that NCUA's policy permitting multiple groups in one field of membership was a reasonable interpretation of the Federal Credit Union Act and furthered Congress' intent to encourage credit union growth. The bankers appealed this decision.

On July 30, 1996, the D.C. Circuit Court of Appeals issued a 3-0 decision in favor of the bankers. The appeals court held that the language of the Federal Credit Union Act was clear and did not permit multiple common bonds within one field of membership. Accordingly, the court concluded that NCUA's long-standing regulation permitting multiple groups in one credit union was unlawful, and ordered the district court to apply its decision to certain group additions to AT&T.

Upon motion by the bankers, the appellate court immediately sent the case to the District Court for a judgment. The bankers then filed a separate suit asking the district court for a nationwide injunction. On October 25, 1996, the separate suit (ABA v. NCUA) and this North Carolina case were consolidated (see Nationwide case summary above).

On February 25, 1998, the U.S. Supreme Court issued a decision in the AT&T case. A five-member majority of the nine member Court concluded that the bankers did have standing, that is, the legal right to challenge federal credit unions' fields of membership. The majority then ruled that NCUA's interpretation of the common bond provision in the Federal Credit Union Act, which permitted multiple groups within a single credit union's field of membership, was not permissible.

The Supreme Court decision resulted in several issues regarding the effect on federal credit unions, including whether: (1) current federal credit union members who were added under the multiple group policy would be required to leave their credit union, and (2) credit unions would be able to continue adding new members from existing groups. The bankers removed their divestiture request but the second issue was to be decided by the D.C. Appeals Court. However, the enactment of H.R. 1151 made these issues moots. The case was dismissed by Judge Jackson on October 15, 1998.

TENNESSEE - Federal Court/AEDC FC

Current Status of Case: A motion to dismiss with prejudice was filed by the credit union parties on October 26, 1998. The bankers then filed a response, however, on November 18, 1998, while the credit union parties were preparing a reply to the bankers' response, the court entered an order dismissing the case with prejudice because the entire controversy had become moot in light of passage of H.R. 1151. This means that the bankers cannot refile the case in the future.

Case History: In 1994, a Murfreesboro, Tennessee bank and the Tennessee Bankers Association filed suit alleging that the NCUA improperly approved a number of field-of-membership expansion requests adding employee and associational groups unrelated to AEDC Federal Credit Union's original membership base. At the league's request, CUNA, the league and the credit union intervened.

The judge affirmed the bankers' right to sue. The parties then briefed the merits of the case. After hearing oral argument on August 28, 1995, the judge ruled in favor of NCUA and the credit union group, concluding that NCUA's policy permitting multiple groups within one credit union's field of membership was a reasonable and permissible interpretation of the law.

The bankers appealed that decision to the Sixth Circuit Court of Appeals. The Sixth Circuit issued a 2-1 decision in favor of the bankers on April 14, 1997. NCUA, AEDC, CUNA and the league appealed to the U.S. Supreme Court. Since the case raises issues identical to those in AT&T, it was governed by the Supreme Court's AT&T decision.

With the issuance of the Supreme Court decision on February 25, 1998, this case was set to take a procedural path similar to the AT&T and Nationwide cases, although in a different court. However, unlike those cases, the bankers here declined to join with credit unions in seeking a formal stay pending resolution of the congressional action on H.R. 1151. Ironically, they also made no effort to move the case forward since the Supreme Court's decision. The credit union parties moved for dismissal with prejudice but the bankers sought a dismissal without prejudice so that they could, potentially, refile the lawsuit at a later date. On November 18, 1998, the court agreed with the credit union parties and entered an order dismissing the case with prejudice.

TEXAS - Federal Court/Communicators FCU and Red River Employees FCU State Court/Southside Credit Union

Current Status of Communicators FCU and Red River Employees FCU Cases: On October 8, 1998, these cases were dismissed upon filing a stipulation to dismiss with the court.

Communicators Case History: On July 27, 1994, the Texas Bankers Association, the Independent Bankers Association of Texas and six Houston banks filed suit in the D.C. federal district court against NCUA. The suit alleged that NCUA acted outside the scope of its authority in approving a number of field of membership expansion requests for Communicators Federal Credit Union to include various employee groups and an association group of all persons aged 50 years and older living within 25 miles of the credit union. At the Texas League's request, CUNA joined the lawsuit as a defendant, together with the league and the credit union. The case was assigned to the same judge who decided the field of membership case involving AT&T Family Federal Credit Union (Judge Pratt) who issued a split decision in this case on May 31, 1995. He once again affirmed that the NCUA policy permitting multiple groups within one field of membership is lawful. He ruled that the NCUA had acted improperly, however, in permitting the credit union to add the retiree group, finding that these Houston-area senior citizens are not members of an association until they join the credit union. The judge expressly made several disclaimers suggesting that his decision was not necessarily far-reaching, noting that circumstances in other areas might be different, and that credit unions might still have a role in the formation of an otherwise valid association of senior citizens.

The bankers appealed Judge Pratt's decision on the multiple group issue to the U.S. Court of Appeals for the District of Columbia Circuit. It was then joined with the AT&T case before Judge Jackson. NCUA and the CUNA plaintiffs decided not to appeal the retiree group portion of the decision.

Red River Case History: A Texas bank and several bank trade associations filed suit against the NCUA on January 16, 1997 in the D.C. District Court claiming that certain multiple group additions to the credit union's field of membership violated the law. They also claimed that the NCUA had failed to police the credit union's membership policies and procedures adequately. Judge Jackson stayed this case pending Supreme Court review of the AT&T case.

Southside Case History: In July 1996, the Independent Bankers Association of Texas and several Texas banks sued the Southside Credit Union and the Texas regulator in Texas state court claiming that Southside's low-income community charter was not a well-defined community. On October 30, 1997, the court dismissed the case as to all defendants except as to the commissioner in his capacity as an individual, not as regulator. The basis for the dismissal was lack of subject matter jurisdiction. The bankers' request for reconsideration was denied, and they chose not to appeal.

UTAH - State Court/All State Community-Chartered Credit Unions

In early 1993, the Utah Bankers' Association filed a suit in the Third Judicial Court of Salt Lake County against 16 named credit unions, unnamed credit unions who serve more than one county, a credit union service organization and the Utah Commissioner of Financial Institutions. The suit sought to limit the membership base of community chartered institutions to one county. The complaint further alleged that credit unions plan to use the shared service centers to further circumvent the one-county limitation in the credit union law. Under state law, a field of membership can include people who "reside within an identifiable neighborhood, community, rural district, or county." Multi-county charters have existed in Utah for more than fourteen years.

The court dismissed the complaint for lack of standing and the bankers appealed that decision to the Utah Supreme Court. After a ruling by the Utah Supreme Court that the bankers had standing to sue, the case was returned to the Utah District Court for a decision on the merits. The bankers filed a motion for summary judgment, which was argued on May 29, 1998. On November 5, 1998, the court ruled in favor of the bankers, restricting the eleven state community-chartered credit unions to one county although allowing the current members and branches who are beyond the one-county restriction to remain. However, no new members or out-of-county branches may be added.

On January 25, 1999, the court held a hearing on the form of the bankers' order granting summary judgment and an order was entered February 5, 1999. On February 24, 1999, based on the legislative initiative petition process mounted by over 100,000 credit union supporters. While the citizen petition was pending, the Utah Legislature passed a compromise bill, which amended the Credit Union Act and resolved some of the pending issues. In order to preserve their rights on the remaining issues, the credit union parties filed a Notice of Appeal on March 3, 1999. On March 22, 1999, the Utah governor signed the bill into law, which goes into effect on May 3, 1999. Under the new law, credit union expansion beyond one county will be limited to new members who meet the field of membership qualifications. The credit union parties are proceeding forward to take advantage of the new legislation.

VIRGINIA - State Court/All State-Chartered Credit Unions

On August 8, 1997, the Virginia Bankers Association filed a petition for review with the State Corporation Commission challenging the Bureau of Financial Institution's authority to (a) allow credit unions to expand their FOMs by addition of SEGs, and (b) describe geographic or community common bonds. On April 3, 1998, the SCC issued an order that affirmed the BFI's authority to allow community-chartered credit unions to encompass geographic, political subdivisions or community common bonds. The SCC found that the Virginia credit union act omits the limiting phrases found in the FCUA and instead may allow common bonds where there is a showing of a uniting force or tie, i.e., a link within the assumed community. However, the SCC also held that the BFI prohibition against adding small SEGs to the FOMs of existing credit unions in October 1996 was correct as a precautionary approach after the July 30, 1996 U.S. Supreme Court decision in AT&T.

On April 30, 1998, the bankers filed a Notice of Appeal with the Virginia Supreme Court on the community charter issue. The bankers had until August 3, 1998 to file their appeal petition, however, an appeal was not filed. Therefore, the SCC's decision is final.

WISCONSIN - Federal Court/Countryside Credit Union

In late February 1996, the state regulator approved Countryside's application for a charter to serve all employees and users of the Farm Credit Agencies in Wisconsin. The bankers claimed that Countryside Credit Union was improperly organized and approved for share insurance because Countryside receives inappropriate direct and indirect support from the government-subsidized Farm Credit Agencies. While the credit union parties were ultimately victorious in both the state agency and the federal courts, on September 30, 1996 President Clinton signed legislation that appears to prohibit Countryside from operating as currently structured. Consequently, Countryside withdrew its charter application.