CU System Sees Major Victory as SCOTUS Denies ABA Appeal on FOM Rule

(From CUNA News) – The U.S. Supreme Court denied an appeal from the American Bankers Association (ABA) to void the NCUA field of membership (FOM) rule, a decision that marks the end of bankers’ nearly four-year battle to undo NCUA’s FOM rule finalized in October 2016. CUNA has long supported the rule and NCUA’s authority to provide oversight for the credit union industry.

“Today is a great day for anyone hoping to access the financial well-being afforded by credit unions,” said CUNA President/CEO Jim Nussle. “In denying the bankers’ lawsuit, the Court has established credit unions’ mission and structure as part the fabric of America. In recognizing the NCUA’s right to oversee our system, the Court has also established a much-needed firewall from spurious attacks by the bankers. CUNA looks forward to working with the NCUA and credit unions to find new opportunities to expand people-over-profit financial services to communities across the country, and thanks the Court for today’s decision.”

The ABA filed suit against NCUA two months after the rule was finalized in 2016. The U.S. District Court for the District of Columbia overturned several parts of the rule in a March 2018 ruling, but nearly all portions of the rule were upheld in an August 2019 decision by the D.C. Circuit Court of Appeals.

The August 2019 decision allows credit unions to serve Combined Statistical Areas of up to 2.5 million people and rural districts with up to one million people.

Leaders from both the National Association of Federally Insured Credit Unions (NAFCU) and CUNA Mutual Group and issued statements on the Supreme Court’s decision as well.

“The Supreme Court’s decision to decline to hear the banker’s case is an indication that the case is and has always been a baseless one,” said NAFCU President and CEO Dan Berger. “For years, bank lobbyists have been unrelenting in their hollow efforts to maximize their own profits by working to undermine credit union growth and the financial well-being of America’s communities and small businesses. NAFCU stands firmly in support of the NCUA’s field of membership rule. It is well within the agency’s legal authority and works in favor of consumers, especially those that are underserved.”

“This is fantastic, and we applaud the Supreme Court for correctly rejecting the bankers’ appeal,” said Robert N. Trunzo, CUNA Mutual Group President/CEO. “This is a great win for credit unions and consumers during what could possibly be the most challenging period our nation and world have faced. As we continue to navigate through this extraordinarily difficult time, the Court’s decision will ensure people have continued access to vital credit union services as they seek to build a brighter financial future.”