FOM proposal has CUNA’s full support, is consistent with court decision

December 10, 2019

CUNA fully supports NCUA’s latest field-of-membership proposal, as it reinstates portions of the 2016 rulemaking that were vacated by a U.S. District Court decision.

The proposal would re-adopt a provision to allow an applicant to designate a Combined Statistical Area (CSA), or an individual, contiguous portion thereof, as a well-defined local community (WDLC), provided that the chosen area has a population of 2.5 million or less.

NCUA also proposed to clarify existing requirements and add an explicit provision to its rules to address concerns about potential discrimination in the FOM selection for CSAs and Core Based Statistical Areas;

“CUNA fully supports the NCUA’s proposal to re-adopt the Combined Statistical Area (CBSA) presumptive well-defined local community option that it originally adopted in the 2016 Final Rule,” the letter reads. “CUNA also agrees that NCUA’s further explanation and support for its elimination of the core area service requirement for CBSAs in the 2016 Final Rule meets the requirements set forth in the D.C. Circuit Court of Appeals’ decision.”

In October 2016, NCUA finalized its CUNA/League-supported field-of-membership rule, 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. 

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. 

CUNA and the Leagues are currently awaiting decision from the D.C. Circuit Court of Appeals on an American Bankers Association motion for an en banc rehearing, with the letter noting how such efforts by the banking trades limit consumers’ financial wellness:

“It’s unfortunate for Americans lacking access to financial services that the ABA and their partners continue to pursue strategies to limit access to credit unions. We fully expect the ABA and the Independent Community Bankers of America (ICBA) to continue pursing litigation strategies aimed at limiting credit unions’ ability to serve their communities. Litigation and other strategies, such as the continued attack on credit unions’ tax status, are nothing more than an attempt to distract from the culprit responsible for the contraction of the community bank sector – the large banks. As underscored by the Federal Reserve Bank of St. Louis this year, for community bankers inspired by a locally-driven mission, credit unions become ideal partners not only because they are strong buyers, but because they are the best institution to carry on that mission to serve.”