Compliance Blog

Jul 22, 2019
Categories: ADA Operations

Second Federal Appeals Court Rules in Favor of CU on ADA

Written by Brandy Bruyere, Vice President of Regulatory Compliance

Last week, another credit union won an appeal in a lawsuit that claimed the credit union's website did not comply with the Americans with Disabilities Act. As background, it has been about two years since a California plaintiffs’ firm began targeting credit unions with demand letters alleging that a credit union’s website did not comply with private industry standards and therefore violated the ADA. However, the Department of Justice's ADA regulations do not contain specific website accessibility standards. Eventually, hundreds of credit unions in over two dozen states had received demand letters, usually from the same firm, seeking damages in connection with the credit union’s website and alleged ADA violations.

When there was a flurry of litigation being filed against credit unions, NAFCU filed sixteen amicus briefs in seven states in support of credit unions. Five federal cases were dismissed in Virginia alone in the spring of 2018, and two of these were appealed to the Fourth Circuit Court of Appeals. In both of these cases, this court reached a unanimous decision based on the particular facts of the cases – the plaintiff did not have “standing” to bring a suit because they could not qualify for membership at the credit union they sued.

Standing is a legal principle that generally determines whether a particular party has the ability to file a lawsuit in court. In a federal court, this requirement includes, in part, suffering an “injury in fact” meaning the harm is concrete, and actual or imminent. Many credit unions that defended ADA website accessibility cases argued that if the credit union is not legally permitted to offer services to the plaintiff, such as a person outside the credit union’s field of membership, then the specific plaintiff does not have standing.

Illinois CU Win. NAFCU continues to monitor litigation in this area, and we have not seen any new federal lawsuits filed against credit unions in over a year. But there are a few cases from 2018 that courts still have not decided. One of these pending cases involved an $18 million asset, privately-insured credit union from Illinois. The credit union won its motion to dismiss at the trial court level back in August 2018, but the plaintiff appealed.

Nearly a year later, on July 15, 2019, the court issued an opinion in favor of the credit union.  The court relied in large part on the credit union case from the Fourth Circuit where NAFCU had filed an amicus brief:

"[The plaintiff] identifies two injuries that he says are each sufficiently concrete and particularized to constitute [standing]: a dignitary harm stemming from his inability to use the website and an informational harm resulting from a lack of access to information on the website. Neither of these alleged injuries passes the test, although we stress that it is for a very narrow reason. As the Fourth Circuit recently held in a nearly identical case, a plaintiff who is legally barred from using a credit union’s services cannot demonstrate an injury that is either concrete or particularized. [citing the Virginia discussed here]


…Illinois law prevents [the plaintiff’s] dignitary harm from materializing into a concrete injury. Because Illinois has erected a neutral legal barrier to [plaintiff’s] use of the Credit Union’s services, the Credit Union’s failure to accommodate the visually impaired in the provision of its services cannot affect him personally. On the contrary, any blow thrown by the Credit Union is blocked as to [the plaintiff]…. the legal barrier here reduces—indeed, eliminates—the cognizable impact of the Credit Union’s conduct on [the plaintiff]..." (Emphasis added)

In other words, according to the court, where someone is not within a credit union’s field of membership, the harm to that individual is not specific and concrete enough to give them the ability to bring a lawsuit. The plaintiff could not be “distinguish[ed]” from anyone else who was not in the credit union’s field of membership. It is important to keep in mind that these decisions are limited and the outcome would likely be different on claims filed by a credit union’s member.

Meanwhile, as member-focused financial institutions, many credit unions have already taken steps to ensure their websites are accessible to those with visual impairments and they are serving all of their members’ needs. This may include adopting private industry standards to make their websites compatible with screen readers. This could also include placing accessibility statements along with toll-free numbers that are compatible with screen reader technology so those with visual impairments can easily access additional information and assistance as needed. Overall, credit unions are committed to providing members with high quality service, including being accessible.

NAFCU recognizes the importance of the ADA and fully supports efforts to ensure individuals with disabilities have equal access to financial services.  However, meritless and costly lawsuits are not the answer. NAFCU will continue to advocate for clear rules of the road in this area.