Appeals Court Refuses to Review Decision Upholding Field-of-Membership Rule
The banking trade group is evaluating its options, including, appealing the ruling to the U.S. Supreme Court.
The American Bankers Association lost another round in its challenge to the NCUA’s Field of Membership Rule Thursday, as the full U.S. Circuit Court of Appeals for the District of Columbia declined to review a panel’s ruling upholding most of the rule.
A three-judge panel of appellate court judges had said the NCUA had not overstepped its powers in amending its FOM rules, but the ABA asked the full appeals court to review the decision.
The full court declined to do that on Thursday.
The three-judge panel had ruled that the NCUA had wide discretion in defining fields of membership.
Following Thursday’s decision, ABA spokesperson Jeff Sigmund told CU Times, “We continue to believe the NCUA regulation oversteps the statutory requirements for credit union field of membership.”
He added that that the trade group is evaluating its options, including, appealing the ruling to the U.S. Supreme Court.
In its ruling, the three-judge panel upheld a portion of the of the FOM rule that increased to one million people the population limits for rural districts.
U.S. District Dabney Friedrich had ruled against the agency and said that the agency had exceeded its authority.
The appeals court panel also upheld a portion of the rule that allowed Combined Statistical Areas as local communities. Friedrich also had voided that section of the rule.
The three judges had said, however, that the NCUA had not sufficiently justified why credit unions should be able to serve core-based statistical areas without serving their urban cores.
They said that part of the rule could lead to discrimination against low- and moderate-income people.
The agency has proposed a rule in an effort to better explain its goals; the comment period on that proposed rule ended Monday.
Credit union trade groups applauded the court’s decision not to bring the case before the full appeals court.
“By recognizing the agency’s authority to regulate and guide America’s not-for-profit credit unions, the court has ensured that the member-owned, people-over-profit cooperative movement will remain strong and continue to grow to meet the needs of Americans for years to come,” CUNA President/CEO Jim Nussle said.
“Today’s appeals court decision reaffirms what we already know: The NCUA’s FOM rule is well within the agency’s legal authority,” said NAFCU President/CEO B. Dan Berger.