A 3rd District judge heard arguments Monday on motions for deciding a suit brought by the Utah Bankers Association against 17 state-chartered credit unions and the state regulator.
Judge Michael Murphy told attorneys he probably will not decide the case until early next year, said Bryce Petty, a state attorney representing the commissioner of financial institutions.The bankers association, the credit unions and the commissioner all had filed motions for summary judgment, and their attorneys argued those motions before Murphy for three-and-a-half hours Monday.
The bankers association sued 17 credit unions and the commissioner in August, alleging the credit unions have illegally expanded into multiple Utah counties in the past decade. Six credit unions are in all 29 counties, and others are in a handful of counties.
The bankers say that violates a Utah statute requiring credit unions to operate in no more than one county.
The association also sued the Credit Union Service Centers of Utah, a planned network of centers that 12 credit unions plan to form. Members of each would be able to conduct financial transactions at centers around the state. The commissioner approved the application to form the network on Friday.
The bankers association argued that the network amounts to shared branching and is an attempt to circumvent credit union branching limits.
The credit unions and the commissioner argued that banks have no standing to sue because the credit union act wasn't intended to protect banks from competition.
Also, they said, banks didn't seek administrative remedies before taking it to the courts.
The state commissioner has wide discretion to interpret law and hasn't been challenged in a decade of decisions allowing multicounty credit unions, they said. That makes the suit untimely, they argued.
The commissioner's decisions allowing multicounty credit unions have been a reasonable interpretation of state law, they argued.