ALEXANDRIA, Va.–NCUA has filed a response to a petition by the American Bankers Association (ABA) in which the bankers group continues to challenge the agency's 2016 field of membership rules. The ABA has appealed the case to the Supreme Court.
In December of 2019, the U.S. District Court of Appeals for the D.C. Circuit denied a request by the American Bankers Association for a rehearing en banc in a case filed against NCUA over those FOM 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. In August 2019, the D.C. Circuit Court of Appeals overturned the previous opinion by U.S. District Court for the District of Columbia, thereby allowing credit unions to serve Combined Statistical Areas of up to 2.5 million people and rural districts with up to one million people.
At issue is the Chevron Doctrine, which allows federal agencies deference in the interpretation of acts of Congress. In its responset, NCUA told the Supreme Court the appeals court reaffirmed the agency’s interpretation of the Federal Credit Union Act and correctly applied the Chevron Doctrine.
"The court recognized that Congress had 'expressly assigned the NCUA the power to define the challenged terms,'" NCUA wrote. The agency added the court of appeals "faithfully applied that settled standard here."
In addition, NCUA further noted in October 2019 it proposed to eliminate the urban-core requirements for local communities based on core based statistical areas. The agency additionally argued the ABA's primary objection is related to "hypothetical credit unions."
In conjunction with the NCUA response, CUNA, NAFCU and CUNA Mutual all issued statements.
CUNA Response
“The Appellate Court was correct in its decision last year to recognize the NCUA’s authority to issue this rule, and in determining the rule was proper in its scope,” said CUNA President/CEO Jim Nussle. “CUNA will continue to support the NCUA in this case, and encourage the Court to stand with consumers—not the banks’ investors—at a time when financial well-being is critical to the so many people’s economic survival.”
NAFCU Response
“Credit unions always put their members first, yet banks’ continued opposition to credit unions serving their local communities at a time of immense economic and financial uncertainty is simply disheartening,” said NAFCU President and CEO Dan Berger. “NAFCU continues to stand alongside credit unions and their 120 million members in support of the NCUA’s field of membership rule, and we oppose banks’ efforts to increase their own profits at the expense of the financial well-being of families and communities.”
CUNA Mutual Response
“The credit union system has proven time and again that we are stronger together,” said CUNA Mutual Group President and CEO Robert N. Trunzo. “We have fought hard to get to this point, and we will be relentless in our efforts to ensure consumers have access to vital credit union services, particularly during this extraordinarily difficult time in our nation’s history. We remain confident NCUA Field of Membership rules are legitimate and within the agency’s scope of authority.”
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