The U.S. Supreme Court declined to review the National Credit Union Administration's field-of-membership rules, ending an ICBA-supported legal challenge going back several years.
In a statement, ICBA President and CEO Rebeca Romero Rainey said the decision not to review a rule that could have a discriminatory impact on urban communities is another reminder of the need to "Wake Up" to the realities of tax-exempt credit unions.
The NCUA rule significantly expands the service areas in which community credit unions can do business. Among its provisions, the rule would allow credit unions to include suburbs of metropolitan areas in their fields of membership while cutting out their urban cores. It would also define entire states and major metro centers as rural districts.
An August 2019 U.S Court of Appeals decision largely upheld the NCUA's rules, citing the "Chevron doctrine" that grants considerable rulemaking discretion to regulatory agencies. However, that court also found that the provision on urban cores could have a discriminatory impact on lower-income and minority residents, permitting the NCUA to issue a new proposal to address its concerns.
ICBA and state banking associations filed a friend-of-the-court brief in April asking the Supreme Court to review the appeals court's decision. ICBA previously called on the NCUA to withdraw and redraft its updated proposal on urban cores, arguing that it does not adequately address discrimination concerns.
Through its "Wake Up" campaign, ICBA will continue encouraging policymakers to open their eyes to the risky practices, costly tax subsidies, and irresponsibly lax oversight of tax-exempt credit unions.