NCUA asks SCOTUS to deny ABA's petition in FOM case
The NCUA Tuesday asked the U.S. Supreme Court to deny to the American Bankers Association's (ABA) request that it take up its challenge to the agency's 2016 field of membership (FOM) rule. NAFCU has stood by the NCUA throughout the lawsuit, and NAFCU President and CEO Dan Berger continued to show the association's support in a joint statement released yesterday with CUNA and CUNA Mutual Group.
"Credit unions always put their members first, yet banks' continued opposition to credit unions serving their local communities at a time of immense economic and financial uncertainty is simply disheartening," Berger said. "NAFCU continues to stand alongside credit unions and their 120 million members in support of the NCUA's field of membership rule, and we oppose banks' efforts to increase their own profits at the expense of the financial well-being of families and communities."
At the core of this issue is the Chevron Doctrine, which allows federal agencies deference in the interpretation of acts of Congress. In the NCUA's response to the Supreme Court, the agency argued that the appeals court reaffirmed the agency’s interpretation of the Federal Credit Union Act and correctly applied the Chevron Doctrine.
"The court recognized that Congress had 'expressly assigned the NCUA the power to define the challenged terms,'" the NCUA wrote, and noted that the court of appeals "faithfully applied that settled standard here."
To address the appeals court's concerns, the NCUA in October proposed a rule related to eliminating the urban-core requirements for local communities based on core based statistical areas.
In addition, the NCUA highlighted that the ABA's its primary objection is related to "hypothetical credit unions."
"But 'the fact that petitioner can point to a hypothetical case in which the rule might lead to an arbitrary result does not render the rule' facially invalid," the NCUA argued, citing previous lawsuits.
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.
NCUA appealed that decision and the D.C. Circuit Court of Appeals' three-judge panel decision in August was largely in favor of the NCUA on key issues in the lawsuit. 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 more American consumers."
After the appeals court's decision, NCUA Chairman Rodney Hood indicated the agency will phase-in the rule's implementation and subsequently released the proposed rule to address remaining concerns. NAFCU offered its support for the proposal and also met with the NCUA to discuss these efforts. The NCUA continues to work to address these concerns.
NAFCU will continue to defend the credit union industry against banker attacks of any kind and urges the NCUA to continue efforts to modernize FOM rules
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