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

Congress has given the National Credit Union Administration wide authority to define credit union fields of membership, the agency told the U.S. Supreme Court Tuesday, challenging arguments made by the nation’s bankers.

Responding to the American Bankers Association’s challenge of the NCUA’s 2016 revisions to the agency’s Field of Membership rules, the agency said that definitions used in the changes are “reasonable and consistent” with the Federal Credit Union Act.

The NCUA’s response to the high-stakes legal battle was due Tuesday.

In March 2018, U.S. District Judge Dabney Friedrich struck down parts of the NCUA’s 2016 changes. 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.

The ABA had argued that those changes exceeded the powers that Congress gave the NCUA.

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 ABA asked the full appellate court to review that decision, but the court declined to do so. The ABA then appealed the case to the Supreme Court, which has agreed to hear it.

In its brief, the NCUA argued that the agency’s definition of “rural” is reasonable. The NCUA said that it increased the maximum population for a rural district in an effort to make those areas more attractive for credit unions to operate. The agency added that if someone is “aggrieved by a particular” definition used by the NCUA, it could then challenge the application of the rule.

Related:

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

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

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

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