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The American Bankers Association (ABA) has filed a petition with the U.S. Court of Appeals for the D.C. Circuit for an en banc rehearing of its lawsuit challenging the NCUA's 2016 field of membership (FOM) rule. The appeals court three-judge panel decision in August was largely in favor of the NCUA on key issues in the lawsuit.

“NAFCU stands firmly with the NCUA, and its efforts to modernize credit unions’ field of membership rules,” said NAFCU President and CEO Dan Berger. “While the ABA continues its meritless attacks against credit union growth and competition, NAFCU will continue to support FOM modernization so that credit unions can serve their members, including the underserved, which banks have so often left behind. NAFCU strongly believes in the credit union industry’s cooperative, not-for-profit mission, and that credit unions provide the best financial solutions the marketplace has to offer.”

The panel's decision remanded the case with instructions to issue summary judgment in favor of the NCUA on the two provisions that were originally struck down by the U.S. District Court for the District of Columbia. The ABA is requesting the full court review the decision with respect to the agency's interpretations of "local community" and "rural district" in order to realign the court's interpretation of the Chevron Doctrine, which gives agencies deference as to their opinions, with that of Supreme Court precedent. 

The NCUA has until Nov. 21 to respond to the ABA's petition.

Following the appeals court panel decision, NAFCU Executive Vice President of Government Affairs and General Counsel Carrie Hunt shared insights with members, noting that it strongly reaffirms the Chevron Doctrine and the NCUA’s interpretations of the Federal Credit Union Act. After the D.C. Circuit’s decision, NCUA Chairman Rodney Hood indicated the agency will phase-in the rule's implementation, and will propose a rulemaking to address concerns related to eliminating the urban-core requirements for local communities based on core based statistical areas.

In March 2018, the D.C. District Court declared two provisions of the rule to exceed the NCUA's statutory authority: automatically qualifying a combined statistical area of fewer than 2.5 million people as a local community and increasing the population limit for rural districts to 1 million people.

The NCUA appealed the decision in May 2018 and the ABA cross-appealed in June 2018. NAFCU, CUNA, and CUNA Mutual Group jointly filed an amicus brief in support of the NCUA's appeal, arguing that "this lawsuit is a clear and transparent attempt by bank lobbyists to hamstring credit unions' ability to help American consumers." NAFCU attended the oral arguments in the appeal that were heard in April.

NAFCU continues to urge the NCUA to modernize FOM rules and to defend the credit union industry – and its growth – against baseless banker attacks. The association acknowledges that legislation is necessary to relax aspects of the Federal Credit Union Act's limitations on chartering, but believes that NCUA can enact constructive regulatory relief by streamlining its chartering and FOM procedures, as well as by removing all non-statutory constraints on FOM chartering and expansion.