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

The U.S. Supreme Court on Monday refused to consider the American Bankers Association’s challenge to the National Credit Union Administration’s Field of Membership rule.

The refusal is a major win for the agency and credit unions that have defended the rule.

The ABA had argued that in 2016, the NCUA amended its Field of Membership rule beyond the standards Congress had set for credit unions.

The Supreme Court gave no reason for deciding not to consider the case.

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

The ABA had argued that the NCUA stretched the term “local community” to include “large regions inhabited by millions of people and comprising dozens of cities and counties.”

The bankers also argued 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 Supreme Court decision not to consider the case upholds the NCUA’s Field of Membership rule.

Related:

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

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

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)

Spread the word. Share this post!