Bankers challenge NCUA field of membership decision

October 9, 2019

Over a month after the D.C. Circuit Court of Appeals upheld most of NCUA's field of membership (FOM) rule, the American Bankers Association (ABA) petitioned the full U.S. Court of Appeals for the District of Columbia to appeal the court’s August decision.

“The D.C. Circuit Court of Appeals already found that credit unions are an important part of America’s financial tapestry,” said Jim Nussle, CUNA president/CEO. “That the bankers continue to spend time and resources to limit consumers’ access to responsible financial services is telling in how we approach our service to communities across the country.”

In October 2016, NCUA finalized its CUNA-supported FOM resulting in the ABA suing 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.

In August 2019, the D.C. Circuit Court of Appeals overturned the previous opinion by U.S. District Court for the District of Columbia, thereby allowing credit unions to serve Combined Statistical Areas of up to 2.5 million people and rural districts with up to one million people.

The circuit court left intact the lower court's holding that allowed credit unions to serve adjacent areas, but asked the NCUA to provide additional explanation for the removal of a requirement to serve the "core" of a Core-Based Statistical Area, which NCUA should be able to remedy by providing additional information to the District Court.

CUNA was joined by CUNA Mutual Group and the National Association of Federally-Insured Credit Unions in filing an amicus brief on NCUA’s behalf in the D.C. Circuit Court case.

The NCUA has filed a motion to extend its deadline for a response until November 21. If granted, the court’s decision on whether to rehear the case before the 17-judge panel in an en banc hearing would likely come in early December. Failing to receive such a hearing, the ABA can appeal to the Supreme Court of the United States.

CUNA will continue to provide updates on this important case.


This article has been updated to reflect the NCUA's motion to extend and the ensuing shift in the timeline.