Banks Challenge America First Federal Credit Union Expansion

Banks Challenge America First Federal Credit Union Expansion

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SALT LAKE CITY (AP) -- Utah bankers are again challenging America First Federal Credit Union's efforts to expand its Utah markets.

The American Bankers Association, the affiliated Utah Bankers Association and five Utah banks filed a lawsuit in U.S. District Court on Tuesday that challenges the National Credit Union Administration's recent approval of America First's bid to expand its membership field beyond Salt Lake County to include Ogden, Provo-Orem, Logan and St. George.

This is the second time, the bankers have challenged federal approval of America First expansion.

Last year, U.S. District Court Judge Dale Kimball invalidated the NCUA's approval of a six-county field of membership for America First and sent the matter back to the NCUA.

Following Kimball's ruling, the credit union restated its field of membership to include only those members who "live, work (or regularly conduct business in), worship, attend school or volunteer in Salt Lake County."

The plaintiffs, who include Bank of Utah, Far West Bank, Bank of American Fork, State Bank of Southern Utah and SunFirst Bank, contend the expansion violates the Federal Credit Union Act, which they contend does not allow America First to serve members beyond Salt Lake County's borders.

"This is the exact same dispute America First has lost time after time in court and no less than four times in the past six years in the state Legislature," said Howard Headlee, president of the Utah Bankers Association.

America First spokeswoman Nicole Cypers said the lawsuit is "yet another illustration of the bankers' continuing strategy to limit consumer choices."

We are "adhering to all guidelines and requirements," she added. "Our objective in serving the underserved areas (of Utah) is simply to give all individuals in the area the opportunity to benefit from affordable financial services."

The lawsuit, which will be heard by Kimball, asks the court to declare the NCUA's approval unlawful and void.

NCUA spokesman Nicholas Owens said the administration had not yet received the lawsuit, but, "I can tell you the credit unions followed NCUA's regulations, and the agency's regulations are in accordance with the federal statute."

(Copyright 2005 by The Associated Press. All Rights Reserved.)

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