Bankers Tell Supreme Court That NCUA is Using ‘Extravagant Interpretations’ to Stretch Fields of Membership

The National Credit Union Administration is using “extravagant interpretations” of federal law to allow credit unions to expand their fields of membership far beyond the restrictions imposed by Congress, the American Bankers Association told the U.S. Supreme Court in a brief filed on Tuesday.

The NCUA stretched the term “local community” to include “large regions inhabited by millions of people and comprising dozens of cities and counties,” the ABA said, in response to a brief filed by the NCUA.

The bankers contend that the NCUA stretched the term “rural district” in a similar manner. The agency “has already applied its new definitions to approve a vast ‘local community’ that encompasses tens of thousands of square miles and more than 80 percent of Utah’s population,” the bankers argued.

The ABA is asking the court to overturn a ruling by a three-judge panel of the U.S. Court of Appeals for the District of Columbia that decided that Congress gave the NCUA broad power in adopting field of membership rules.

In its brief, the ABA said that the NCUA far exceeds the discretion the court allowed it in the so-called “Chevron Doctrine.” That doctrine, based on a previous Supreme Court case, states that in most cases a court will defer to a federal agency’s interpretation of a statute.

The ABA said that the NCUA’s interpretation “goes far beyond the meaning that the statute can bear.”

The Supreme Court is scheduled to discuss the case at its June 25 conference.

The ABA is challenging the 2016 amendments to the agency’s Field of Membership rule. In March 2018, U.S. District Judge Dabney Friedrich struck down parts of the rule. One section automatically qualified a Combined Statistical Area or a contiguous portion with fewer than 2.5 million people as a local community. Another section increased the maximum population for rural district to one million people.

A three-judge panel of the U.S. Court of Appeals for the District of Columbia decided that the rule did comply with federal law and overturned much of Friedrich’s decision. The full appeals court declined to consider the case, so the ABA filed an appeal with the Supreme Court.


Full Text of the American Bankers Association Brief Filed with the Supreme Court (Supreme Court No. 19-1115)

Full Text of the National Credit Union Administration Brief Filed with the Supreme Court (Supreme Court No. 19-1115)

NCUA Tells Supreme Court That Agency Has Broad Discretion in Defining Fields of Membership

Supreme Court Refuses to Consider Banker Challenge to NCUA Field of Membership Rule

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