In the wake of a federal court ruling, several Utah credit unions have at least temporarily limited their membership requirements.

But credit union advocates say the action — which seems to have affected America First Credit Union, the University of Utah Credit Union, Tooele Federal Credit Union and Goldenwest Credit Union — is just part of the process of analyzing and interpreting the ruling.

Earlier this month, U.S. District Court Judge Dale Kimball determined that the National Credit Union Administration needed to revisit its decision to grant a six-county field of membership to Tooele, University of Utah, America First and Goldenwest credit unions.

In his decision, Kimball wrote, "The community charter in this case covers six of Utah's most populated counties, includes over 1.4 million residents (almost two-thirds of the state's population), covers land from the Nevada border to the Wyoming border and crosses two major mountain ranges.

"The court is mindful of the narrow standard of review in this case and the fact that the NCUA is entitled to deference in the application of its own regulations," Kimball wrote. "The main difficulty the court sees presented by this case, however, is the failure of the NCUA to recognize and critically assess the size of the community it was analyzing as 'local,' especially given its regulations recognizing that the term 'local' was intended to limit such charters."

NCUA spokesman Nicholas Owens on Thursday confirmed that the credit unions have been instructed to limit their membership requirements while the matter is being re-evaluated but as of press time Thursday was unable to comment on how long that might take.

America First's Web site states that to be eligible for membership at the credit union, applicants must be a family member or in the same household as an existing America First member. Calls to the credit union were referred to the Utah League of Credit Unions.

Scott Simpson, president of the league, said likely the NCUA did what it did in order to best comply with Kimball's ruling, and that the membership limitations likely are "part of a process."

"I believe this will develop as a process more than a single event," Simpson said. For now, he said, Utahns should check with the individual credit unions to see what their membership requirements include.

"It appears that the NCUA is being as responsive as they can be, to put this matter on proper footing in light of the court's decision," Simpson said. "I think it's a little disingenuous to say that they are 'no longer accepting members.' This is an issue that continues to unfold."

In a statement released this week, NCUA chairwoman JoAnn Johnson said that she has "directed agency staff to conduct a thorough analysis of the respective applications in order to supplement the record, so we may comply with the Judge's request for further review in this matter.

"In order to maintain safety and soundness of America's credit unions, credit unions must have diversification and membership growth opportunities," Johnson wrote. "At NCUA, we will continue to provide the flexibility needed within the bounds of the law and regulations."

---

E-mail: jnii@desnews.com