ICBA, State Groups Back Appeal of Rule Allowing Credit Unions to Ignore Urban Cores
Washington, D.C. (Jan. 28, 2019)—The Independent Community Bankers of America® (ICBA) and a coalition of affiliated state community banking associations participated in an industry legal brief strongly supporting the American Bankers Association’s appeal in its lawsuit challenging the National Credit Union Administration’s field-of-membership rule. The friend-of-the-court brief demonstrates firm community bank opposition to the NCUA’s unlawful attempt to drastically increase the powers of tax-exempt credit unions beyond their statutory limits.
“The NCUA’s rule allowing credit unions to serve entire metropolitan areas while abandoning their urban cores is another example of this captive regulator attempting to extend the industry’s taxpayer-subsidized competitive advantage at the expense of local customers and communities,” ICBA President and CEO Rebeca Romero Rainey said today. “The ICBA-supported appeal is designed to prevent credit unions from flouting both congressional intent and the communities they were created to serve.”
The NCUA’s October 2016 final rule significantly expanded 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. A federal judge last year vacated two provisions of the rule that would have defined combined statistical areas with fewer than 2.5 million people as local communities and increased the population limit for rural districts to 1 million.
ABA’s appeal challenges the court’s decision to leave in place a provision of the rule allowing credit unions to serve metropolitan areas without serving their urban core. The appeal supported by today’s joint amicus brief argues that this provision counters congressional intent that credit unions serve persons of modest means. The brief also urges the appellate court to uphold the lower court’s ruling that the NCUA rule unreasonably defines rural districts to automatically include entire states, vast non-rural areas, and major metropolitan centers.
ICBA will continue challenging the NCUA’s unlawful attempts to drastically increase the powers of tax-exempt credit unions beyond their statutory limits.
The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. With more than 52,000 locations nationwide, community banks constitute 99 percent of all banks, employ more than 760,000 Americans and are the only physical banking presence in one in five U.S. counties. Holding more than $4.9 trillion in assets, $3.9 trillion in deposits, and $3.4 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers’ dreams in communities throughout America. For more information, visit ICBA’s website at www.icba.org.
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