Local Credit Unions Unaffected State Charters Insulate Most Spokane Credit Unions From Supreme Court Decision

Wednesday’s U.S. Supreme Court opinion restricting credit union membership will have little effect in Spokane, in dustry officials said.

Only nine of the 34 credit unions in the community have a federal charter subject to the ruling, they said.

Of those, all but one or two have single-group memberships - government employees, for example - that were not challenged by the banking industry.

Most area credit unions have state charters that allow them to enroll members from several employers.

The Global Credit Union would have been the most vulnerable to the court ruling, but officials there converted the institution to a state charter when a U.S. District Court judge in 1996 limited new enrollment in a North Carolina case.

The status of the Spokane Media Federal Credit Union is unclear because that institution converted from a state to a federal charter in the early 1990s, said Chief Executive Officer Debbie Bauer.

The credit union was chartered for employees of the Inland Empire Paper Co., she said, but expanded its membership to include most media groups before the conversion.

“It’s difficult for all of us to know how we’re going to be affected by it,” Bauer said.

She said credit unions hope proposed federal legislation endorsed Tuesday by House Speaker Newt Gingrich will reaffirm the right of all Americans to have access to credit unions.

Although three Washington representatives are among 132 co-sponsors of that bill, Rep. George Nethercutt is withholding judgment until he sees all the legislation expected in the wake of the court’s ruling, said spokesman Ken Lisaius.

Washington has 191 credit unions with about two million members, said Warren Lewis, vice president of the Washington Credit Union League.

The status of less than 25 percent is in doubt because of the ruling, he said. Like Global, he said, several larger credit unions converted to state charters to avoid losing members.

But Lewis called the potential loss of 20 million members nationally “just not acceptable,” adding that the league will encourage more representatives to side with Gingrich.

Forty of Idaho’s 85 credit unions are federally chartered.

Washington Trust Bank President Pete Stanton said bankers do not want to crush credit unions, just assure a level playing field.

Credit unions that stay true to the niche they were created to serve are fine, he said, adding, those that have expanded and become more bank-like should be treated like banks, including requiring they pay taxes.

, DataTimes