WASHINGTON–Several state bank trade associations have filed an amicus brief in support of a petition with the Supreme Court in a case filed by the American Bankers Association that challenges NCUA’s field of membership rule.
The brief has been filed at the same time the court has announced that, due to the coronavirus pandemic, it will hear oral arguments by teleconference beginning next month. All justices and counsel will participate remotely. SCOTUS has already rescheduled numerous hearings.
The bankers’ case involves a petition filed by the ABA with the highest court after it essentially lost on most counts when he U.S. Court of Appeals for the District of Columbia ruled in favor of NCUA’s discretion to define the membership regulations governing federal credit unions.
In the new amicus brief, trade associations representing banks in Delaware, New Hampshire, Rhode Island and Massachusetts expressed support for the petition for a writ of certiorari to the Supreme Court, arguing the Federal Credit Union Act must be interpreted in a “fair and reasonable way.”
Deference to Chevron Decision Cited
Doing so, the petition states, would ensure federally-chartered community credit unions are limited to serving “[p]ersons or organizations within a well-defined local community, neighborhood, or rural district.”
The bankers further NCUA’s proposed definitions of “local community” as any Combined Statistical Area with a population of up to 2.5 million and definition of “rural district” to include vast areas with overwhelmingly urban populations of up to one million exceed the FCU Act, and should not be upheld on the basis of the Chevron deference.
As CUToday.info has reported, the litigation was originally filed in late 2016 after NCUA passed the revised FOM rules. The American Bankers Association won a limited victorying the case after the federal judge upheld two of four provisions before the appeals court reversed that ruling.