Bankers Want to Thwart Competition, Trades, CUNA Mutual Say in Appellate Brief

The American Bankers Association’s legal challenge to the NCUA’s Field of Membership rules simply is the bankers’ latest attempt to thwart credit union growth and restrict competition, credit union trade groups and CUNA Mutual Group said Thursday in a brief filed in federal court.

“NCUA’s amended field of membership policy is plainly reasonable in light of Congress’s purposes in enacting the Federal Credit Union Act, which was unquestionably intended to promote, not deter, the growth and financial stability of federally-chartered credit unions, CUNA, NAFCU and the CUNA Mutual Group, said in the joint filing.

The bankers filed suit challenging the NCUA’s revised Field of Membership rules, saying that the agency had exceeded its powers under federal law.

U.S. District Court Judge Dabney Friedrich threw out a provision of the field of membership rule that increases to one million people the population limit for rural districts. She also threw out a provision of the rule that automatically qualified a “Combined Statistical Area” or a contiguous portion of it with fewer than 2.5 million people to be a local community.

The NCUA is appealing that decision.

Friedrich upheld two other parts of the rule and the bankers are challenging that decision.

“Congress explicitly delegated to NCUA the authority to define the terms ‘well defined local community’ and ‘rural district,’” the trade groups and CUNA Mutual said.

The agency has “drawn on its decades of experience and expertise to develop a policy that strikes a reasonable balance between Congress’s twin aims of encouraging the growth and viability of federal credit unions, on the one hand, and maintaining common ties between the members of those credit unions, on the other,” they added.

“This lawsuit is a clear and transparent attempt by bank lobbyists to hamstring credit unions’ ability to help more American consumers,” NAFCU President/CEO B. Dan Berger said, in explaining why the trade group filed the brief.

“As the federal regulator for credit unions, it is vital NCUA have the authority to interpret relevant statutes and modernize its regulations as needed to help credit unions better serve their members while maintaining safety and soundness,” said CUNA President/CEO Jim Nussle.

“We felt compelled to continue…support by joining forces with CUNA and NAFCU as well as retaining the services of highly respected attorney, Eugene Scalia, at the outset of the case,” said Robert N. Trunzo, CUNA Mutual Group President/CEO.