With bright red signs and jars of peanuts, hundreds of credit union members descended on the Capitol on Wednesday to protest a recent proposal to severely limit membership in the consumer-based financial institutions.
In a petition filed last month, the Florida Bankers Association asked Comptroller Bob Milligan to restrict credit unions from reaching out to multiple groups for new members.
"We have a fight on our hands," said Guy Hood, president of the Florida Credit Union League. "This fight will not be easy."
The proposal could have far-reaching effects by pitting two traditional foes in a battle that almost surely will wind up in court. Credit union officials say the proposal would shut out 1.2-million of Florida's current 3.5-million credit union members.
Typically, credit unions draw their membership from a single company or organization and can have as few as 500 members. But Florida law allows them to expand membership to a "limited field" of different groups that has allowed some credit unions to rival banks in size.
The state interpretation contrasts with a recent federal court ruling that nationally chartered credit unions must restrict their membership to organizations with a "common bond." That ruling is on appeal.
Banks protest that credit unions, which perform many of the same consumer-oriented services such as savings and checking accounts, have an unfair business advantage since all credit unions are non-profit and, thus, tax-exempt.
But credit union members said that banks were simply trying to crush small, but determined, competitors. They gave legislators jars of peanuts that said credit unions were "peanuts" compared to big banks.
"I'm convinced that the freedoms extended to me are being threatened," said Linda Wyatt, who had her application for an auto loan turned down by two banks before she received money from an Orlando credit union.
The battle will begin in earnest in April with a workshop at the Division of Banking on the Florida Bankers Association petition.
Milligan already has indicated that he doesn't believe there's a need for any new rules, but a comptroller's spokesman predicted the matter will wind up in court, with one side or the other appealing the final ruling.
"We have not made a ruling on the petition, but we don't think there's a need for it," spokesman Jim Richardson said. "We have to hear from all sides, but it's going to wind up in court."