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NCUA Field of Membership Issue Continues

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. And while disconcerting, this legal move is just one in a long line of actions since 2016:

  • October 2016: NCUA finalized its FOM rule.
  • December 2016: ABA sued the agency on the FOM rule.
  • March 2018: U.S. District Court of the District of Columbia ruled to uphold two challenged portions of the rule and struck down two provisions. CUNA argued that the Court was wrong in its finding that the agency overstepped its statutory authority regarding the combined statistical area approach and the definition of rural district.
  • 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.
  • October 2019: ABA petitions to appeal the court’s August 2019 decision.

In this process, 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 and continues to work to protect credit unions. But what’s next on the horizon? 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. Stay tuned!

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