WASHINGTON–In the wake of a Supreme Court decision that effectively stops a banking industry challenge to NCUA’s field of membership rules, one banking group is suggesting the ruling will have a “discriminatory impact” and lead to “redlining.”
As CUToday.info reported here, the Supreme Court has denied an appeal by the American Bankers Association (ABA) seeking to void membership rules NCUA first approved in December of 2016. The agency said it will immediately move to process applications affected by the ruling.
In response, Independent Community Bankers of America (ICBA) President and CEO Rebeca Romero Rainey issued a statement saying, "(Monday’s) Supreme Court decision not to review a National Credit Union Administration rule that could have a discriminatory impact on urban communities is another reminder that Washington and Americans nationwide need to 'Wake Up' to the realities of tax-exempt credit unions.
"While the courts have granted considerable rulemaking discretion to agencies under the 'Chevron doctrine,' the NCUA's flawed plan would allow taxpayer-subsidized credit unions to include wealthy suburbs of metropolitan areas in their fields of membership while cutting out their urban cores," continued Romero Rainey. "Meanwhile, it would drastically enlarge credit unions’ geographic reach by defining entire states and major metro centers as rural districts.
"The NCUA has yet to address redlining concerns with its rule, which is just the latest example of the credit union industry's captive regulator bowing to the growth-obsessed financial firms it is charged with regulating at the expense of local communities,” Romero Rainey said.
The ICBA said it will continue to use its 'Wake Up' campaign to encourage policymakers “to open their eyes to the risky practices, costly tax subsidies, and irresponsibly lax oversight of tax-exempt credit unions and how far credit unions have strayed from the original purpose underlying their tax exemption."