WASHINGTON–The U.S. District Court of Appeals for the D.C. Circuit has denied a request by the American Bankers Association for a rehearing en banc in a case filed against NCUA over its new field of membership rules.
The bankers’ group had originally filed suit in December 2016 over rules expanding field of membership for federal credit unions. In March 2018, the U.S. District Court for the District of Columbia upheld two challenged portions of NCUA's FOM rule and struck down two provisions in a lawsuit filed against the agency by the ABA. The NCUA appealed the decision in May and ABA cross-appealed in June.
The provisions declared to exceed the NCUA's statutory authority includedthose that automatically qualify a combined statistical area (CSA) with fewer than 2.5 million people to be a local community and the increase to one million people the population limit for rural districts. In response, the NCUA board approved tweaks to its rules earlier this year following the court rulings.
The American Bankers Association also filed a petition with the U.S. Court of Appeals for the D.C. Circuit for an en banc rehearing of its lawsuit challenging the FOM rule. The court has denied the rehearing en banc.
CUNA, NAFCU and CUNA Mutual, all of which had filed briefs in the case, praised the court for its decision.
CUNA Response
“Today’s decision by the D. C. Circuit Court upholding the National Credit Union Administration’s field of membership rule is another major win for credit unions and the 117 million members they serve,” said CUNA President/CEO Jim Nussle. “By recognizing the agency’s authority to regulate and guide America’s not-for-profit credit unions, the court has ensured that the member-owned, people-over-profit cooperative movement will remain strong and continue to grow to meet the needs of Americans for years to come.”
NAFCU Response
“Today’s appeals court decision reaffirms what we already know: The NCUA's FOM rule is well within the agency’s legal authority,” said Dan Berger, NAFCU President and CEO. “Unlike for-profit banks, credit unions do not have a history of engaging in discriminatory practices. NAFCU remains steadfast in our support of the NCUA’s FOM rule.”
CUNA Mutual Response
“We join our credit union system partners in applauding the Appellate Court’s decision,” said Robert N. Trunzo, CUNA Mutual Group President & CEO. “This decision further proves NCUA’s Field of Membership rules are legitimate and within the agency’s scope of authority.”