Banks hail judge's order

A federal judge criticized the National Credit Union Administration this week for its decision to grant several Utah credit unions a six-county operating area and remanded the matter back to the administration for reconsideration.

While bankers heralded the decision, credit union advocates said neither side got exactly what it wanted.

The Utah Bankers Association, through the American Bankers Association, sued the NCUA in U.S. District Court after the NCUA granted Tooele Credit Union an expanded charter in April 2003. The charter included Salt Lake, Summit, Morgan, Weber, Davis and Tooele counties. A short time later, that same operating area was granted to two of the state's largest credit unions, America First and Goldenwest.

In its application to the NCUA, Tooele Credit Union asserted that the six counties constituted a "well-defined local community," citing factors like five counties' membership in the Wasatch Front Regional Statistical Council, the high percentage of members who are members of The Church of Jesus Christ of Latter-day Saints, and the inclusion of Salt Lake, Davis and Weber counties in the federal Office of Management and Budget's Salt Lake Metropolitan Statistical Area. Based on those commonalities, Tooele argued that it should be allowed to establish branches in those six counties. In April, the NCUA's three-member panel agreed, by a 2-1 vote.

The UBA/ABA sued, arguing that the Tooele credit union did not submit adequate or accurate information to the NCUA, which affected the administration's decision, and that the NCUA "ignored relevant factors that should have been considered in the decisionmaking process and . . . relied on certain factors without underlying factual support in the record," according to U.S. District Court Judge Dale Kimball's order, handed down Wednesday.

NCUA spokesman Nicholas Owens said Friday that the administration is "reviewing the opinion and evaluating the options." The administration will refer the issue to the NCUA regional office for "supplemental review of the record and further analysis," Owens said.

Calling the case "troubling," Kimball ruled that the NCUA should have considered more critically and carefully the evidence before it, as to whether the proposed membership field was a single "well-defined local community."