WASHINGTON–The American Bankers Association has filed a petition asking the Supreme Court to hear its challenge to NCUA’’s field-of-membership rule.
Credit unions have responded by calling the bankers’ petition “unfortunate” and said they will not be “deterred.”
As CUToday.info had reported earlier, the U.S. Court of Appeals for the District of Columbia ruled in August of 2019 to uphold NCUA’s expanded field of membership rules, which the bankers had challenged. The court said the agency had “vast discretion” in defining FOM rules.
The move breathes new life into a case that had appeared to have been settled when the U.S. Court of Appeals for the District of Columbia ruled in August that the NCUA had “vast discretion” to define the membership regulations governing federal credit unions. A lower court had earlier ruled in favor of two of NCUA’s proposed FOM provisions, and against two others, before the Appeals Court reversed the decision.
The NCUA’s governing board approved revised field-of-membership rules in December 2016 making it easier for credit unions in rural districts to widen their membership and allowing a combined statistical area of 2.5 million inhabitants to qualify as a well-defined local community.
In its petition to the highest court, the American Bankers Association is arguing NCUA has stretched far beyond the intention of Congress its interpretation of what comprises a field of membership.
Credit Union Response
CUNA, NAFCU and CUNA Mutual have all issued statements:
- “It is unfortunate to see the bankers devote so many resources to restricting the financial options of American consumers,” said CUNA President/CEO Jim Nussle. “We believe the Appellate Court made the right decision in December and will continue to defend the NCUA’s authority to promulgate field of membership rules for America’s credit unions to deliver not-for-profit financial services to consumers.
- “Banks’ continued opposition to modernizing credit unions’ field of membership rules is an indication of their hostility toward credit union growth and competition,” said Dan Berger, NAFCU President and CEO. “Credit unions have a strong history of stepping up for their members, especially in underserved communities, and NAFCU will continue to support the NCUA’s modernized field of membership rules that allow credit unions to better serve their communities.”
- “As a credit union system, we remain undeterred by the bankers’ relentless legal maneuvers,” said Robert N. Trunzo, CUNA Mutual Group president and CEO. “We look forward to continuing to work with our system partners to demonstrate why NCUA field of membership rules are legitimate and within the agency’s scope of authority.”