Washington, D.C. (June 5, 2017)—The Independent Community Bankers of America® (ICBA) and a coalition of affiliated state community banking associations filed a friend-of-the-court brief strongly supporting the American Bankers Association’s lawsuit challenging the National Credit Union Administration’s field-of-membership rule. The amicus brief shows community banks are united in their opposition to the NCUA’s unlawful attempt to drastically increase the powers of tax-exempt credit unions beyond their statutory limits.
“The NCUA’s expansive field-of-membership rule is another example of this captive regulator inappropriately and illegally extending the industry’s taxpayer-subsidized competitive advantage over taxpaying community banks,” ICBA President and CEO Camden R. Fine said today. “If allowed to stand, the NCUA’s action will enable credit unions to unlawfully exploit their significant tax advantage by flouting congressional intent.”
The NCUA’s October 2016 final rule significantly expands the service areas in which community credit unions can do business, rendering meaningless the statutory standard that limits these institutions to serving a well-defined local community, neighborhood or rural district. ABA’s lawsuit argues that the rule ignores statutory requirements on membership by concluding that combined statistical areas are presumptively proper fields of membership for community credit unions and that a “rural district” can include vast regions that in many instances include areas that are not rural. The brief from ICBA and its state affiliates says 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.
As ICBA noted in a February 2016 comment letter to the NCUA, the agency’s actions erode any meaningful distinction between tax-exempt credit unions and taxpaying community banks, further undermining any justification for the credit union tax exemption. Given the serious consequences that may result from the NCUA’s actions, including much larger credit unions serving larger and more geographically diverse areas, ICBA and its affiliated state associations urge the court to grant ABA’s motion for summary judgement.
The Independent Community Bankers of America®, the nation’s voice for more than 5,800 community banks of all sizes and charter types, is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education and high-quality products and services. For more information, visit ICBA’s website at www.icba.org.