Community charters, laches, and prospective application: COMMONWEALTH OF KY V. HOME FEDERAL SAVINGS AND LOAN ASSOCIATON (COA 10/31/2008)

The Court affirmed a declaratory judgment of the circuit court, which rejected the interpretation by The Office of Financial Institutions (OFI) of KRS 286.6-107 as allowing community or geographic charters for state credit unions. The Court first held that Home Federal Savings and Loan did not lack standing to bring the action. Because the case involved OFI’s administration of its regulatory authority, Home Federal, as a competitor of the regulated credit unions showed an actual, justiciable injury. The Court next held that Home Federal was not required to exhaust any administrative remedies before bringing the action because the agency was acting in excess of its power and further, there were no administrative remedies to pursue. The Court then adopted the opinion of the trial court holding that the action was not barred by the doctrine of laches because any delay in bringing a challenge would have minimal impact, it would be error to allow the erroneous interpretation of the statute to continue, the Court’s ruling was applied prospectively. The Court ultimately adopted the opinion of the trial court holding that OFI acted outside of the scope of its authority in allowing community-based charters because community (or geographic) fields of membership were not authorized under KRS 286.6-107.