Court's Dismissal of NCUA FOM Challenge Marks a Victory for Credit Unions
Today, the D.C. Circuit Court of Appeals issued an opinion upholding almost all portions of the NCUA’s field of membership (FOM) rule, thereby dismissing a challenge from the American Bankers Association.
“Today’s opinion by the D.C. Court of Appeals is a resounding victory for credit unions, their members, and communities across the country,” said CUNA President/CEO Jim Nussle. “That the court has recognized the benefits of an expanded field of membership speaks to the important role credit unions play in advancing financial inclusion. This is the second major recent legal victory for credit unions in the face of ill-conceived bank attacks, and speaks to the power of cooperation between CUNA, NAFCU and CUNA Mutual Group.”
In today’s ruling, the D.C. Circuit Court of Appeals overturned a previous opinion by U.S. District Court for the District of Columbia, allowing credit unions to serve Combined Statistical Areas of up to 2.5 million people and rural districts with up to 1 million people. The circuit court left intact the lower court's holding that allowed credit unions to serve adjacent areas, but asked the NCUA to provide additional explanation for the removal of a requirement to serve the "core" of a Core-Based Statistical Area, which NCUA should be able to remedy by providing additional information to the District Court.
“Today’s decision by the D.C. Court of Appeals upholding almost all portions of the NCUA’s rule is a big win for credit unions," read a joint statement by CUNA, NAFCU and CUNA Mutual Group. "This will have a positive impact for the industry’s 117 million members and American consumers who now have better access to member-owned not-for-profit credit unions. For the one aspect of the rule that the court asked for more explanation, we are confident the agency will provide additional support.
“CUNA, NAFCU and CUNA Mutual Group stand united in our position that credit unions provide the best in financial services to American consumers. Against meritless banker attacks, we will continue our efforts to ensure field of membership regulations are updated to reflect the modern financial services system so that credit unions can serve their members, including the underserved.”
“This court decision is a victory for federally-chartered credit unions and it may influence state regulations in some states as well," said MCUL President/CEO Dave Adams. "Additionally, this ruling affirms that neither the courts nor lawmakers are willing to let bankers restrict consumer access to credit unions through technical legal maneuvering or creative lobbying techniques.”