Court Vacates Parts of NCUA Field-of-Membership Rule

Mar 30, 2018
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A federal judge vacated two provisions of the National Credit Union Administration’s field-of-membership rule. The ruling in an ICBA-supported lawsuit against the NCUA limits the agency’s October 2016 final rule, which significantly expands the service areas in which community credit unions can do business.

The ruling in the American Bankers Association lawsuit, which ICBA and state community banking associations supported in a friend-of-the-court brief, overturns two key provisions of the rule. One automatically qualified combined statistical areas with fewer than 2.5 million people as local communities. The other increased the population limit for rural districts to 1 million people.

Two other provisions challenged in the lawsuit—one serving core-based statistical areas without serving their urban core, and another adding “adjacent areas” to existing community fields of membership—were left in place by D.C. District Court judge Dabney Friedrich.

The lawsuit argued that the NCUA’s rule ignored statutory requirements on credit union membership. The brief from ICBA and its state affiliates said the agency’s deliberate violation of statutory restraints to enlarge credit unions’ geographic reach is part of its ongoing campaign to promote the credit union industry.

ICBA will continue challenging the NCUA’s unlawful attempts to drastically increase the powers of tax-exempt credit unions beyond their statutory limits.

Read Judge’s Order
Read Memorandum Opinion