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(From CUNA News) – The DC Circuit Court of Appeals issued an opinion today upholding almost all portions of the NCUA’s field of membership (FOM) rule, which had been challenged by the American Bankers Association.
“Today’s opinion by the DC Court of Appeals is a resounding victory for credit unions, their members, and communities across the country,” said CUNA President/CEO Jim Nussle. “That the court has recognized the benefits of an expanded field of membership speaks to the important role credit unions play in advancing financial inclusion. This is the second major recent legal victory for credit unions in the face of ill-conceived bank attacks, and speaks to the power of cooperation between CUNA, NAFCU, and CUNA Mutual Group.”
CUNA has fiercely supported NCUA’s rule and the agency’s efforts to defend it in court. CUNA joined CUNA Mutual Group and the National Association of Federally Insured Credit Unions to file a brief in support of the agency in December.
“Today’s decision by the DC Court of Appeals upholding almost all portions of the NCUA’s rule is a big win for credit unions,” read a joint statement by CUNA, NAFCU, and the CUNA Mutual Group. “This will have a positive impact for the industry’s 117 million members and American consumers who now have better access to member-owned not-for-profit credit unions. For the one aspect of the rule that the court asked for more explanation, we are confident the agency will provide additional support.
“CUNA, NAFCU and CUNA Mutual Group stand united in our position that credit unions provide the best in financial services to American consumers. Against meritless banker attacks, we will continue our efforts to ensure field of membership regulations are updated to reflect the modern financial services system so that credit unions can serve their members, including the underserved.”
NCUA finalized its CUNA-supported FOM rule in October 2016, and the American Bankers Association sued the agency in December 2016. The U.S. District Court of the District of Columbia ruled in March 2018, upholding two challenged portions of the rule and striking down two provisions. CUNA believes the U.S. District Court of the District of Columbia erred in its finding that the agency overstepped its statutory authority regarding the combined statistical area approach and the definition of rural district.
CUNA attended oral arguments before a three-judge panel of the DC Circuit Court of Appeals in April. During the hearing, the judges considered NCUA’s appeal of Judge Friedrich’s ruling overturning the provisions of the agency’s rule related to combined statistical areas and rural districts.