NCUA, Credit Union Trades File Briefs in Field of Membership Case

The National Credit Union Administration last week filed a brief in ABA v. NCUA challenging the American Bankers Association’s view that NCUA’s field of membership rule for community-based credit unions far exceeds the limitations imposed by Congress. In the lawsuit, ABA specifically challenged the inclusion of Combined Statistical Areas — which encompass multiple Metropolitan Statistical Areas — as “local communities”; the ability of credit unions to serve Core-Based Statistical Areas without serving the urban core that defines the area; the ability to add “adjacent areas” to existing community fields of membership; and the dramatic expansion of what constitutes a rural district.

ABA argued that this expansion of taxpayer-subsidized financial institutions is inconsistent with the limited scope of credit union operations envisioned by Congress, that it authorizes fields of membership that federal courts have previously rejected and that it undermines the ability of taxpaying banks to serve their communities. The association is seeking a declaration that the rule exceeded the agency’s statutory authority and is arbitrary and capricious, as well as an injunction prohibiting any community charter expansions under the challenged portions of the rule. ABA in May filed for summary judgment in the case.

In its brief, NCUA defended its actions in finalizing the rule, arguing that it made a reasonable interpretation of its statutory authority. The Credit Union National Association and the National Association of Federally-Insured Credit Unions also filed an amicus brief yesterday in support of NCUA’s claim. For more information, contact ABA’s Sabrina Bergen.

 

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