HARRISBURG, Pa. (5/26/09)--The failure of banks' challenges to credit unions' tax-exempt status in a Pennsylvania court can only be good for credit unions in other states, too, according to Eric Richard, Credit Union National Association (CUNA) executive vice president and general counsel. The Pennsylvania Commonwealth Court Thursday issued an order discontinuing banks' challenges to credit unions' tax-exempt status. The order "effectively ends the tax litigation," said Jim McCormack, president/CEO of the Pennsylvania Credit Union Association (PCUA) (Life is a Highway May 22). "The banking industry in Pennsylvania seems to have thought it could undermine the credit union tax exemption with this litigation," CUNA's Richard said. "That strategy has failed, and its failure can only be good for credit unions in other states, too. "Pennsylvania's credit unions and PCUA have worked brilliantly to get this issue out of the courts," Richard told News Now. The court order follows months of discovery requests and negotiations over banks' allegations that the taxing scheme applicable to Pennsylvania's state-chartered credit unions violates the state constitution. The state has seen a series of cases beginning in 2003 as banks challenged state credit unions' conversions to community charters. After losing their arguments against the charters before the Pennsylvania Department of Banking, the banks also raised the tax challenge on appeal to the court system. One community chartering case remains active. Freedom CU and TruMark Financial CU serve the well-defined local community of the Philadelphia metropolitan division, said PCUA. The Freedom/TruMark Financial case will be argued on June 10.