Court Upholds NCUA FOM Posted by Association of Vermont Credit Unions on 1:30 PM

Today the D.C. Circuit Court of Appeals issued an opinion upholding almost all of NCUA’s field of membership (FOM) rule.  NCUA finalized its CUNA-supported FOM rule in October 2016, and the American Bankers Association sued the agency in December 2016. The U.S. District Court of the District of Columbia ruled in March 2018, upholding two challenged portions of the rule and striking down two provisions on the basis that the NCUA overstepped its statutory authority regarding the combined statistical area approach and the definition of rural district.

In today’s ruling, the court also considered ABA’s cross-appeal on those portions of District Judge Dabney Friedrich’s opinion upholding the provision of the rule permitting credit unions to serve core-based statistical areas without serving the urban core that defines the area.

CUNA strongly supported NCUA’s rule and the agency’s efforts to defend it in court. CUNA joined CUNA Mutual Group and the National Association of Federally Insured Credit Unions to file a brief in support of the agency in December. CUNA attended oral arguments before a three-judge panel of the D.C. Circuit Court of Appeals in April. During the hearing, the judges considered NCUA’s appeal of Judge Friedrich’s ruling overturning the provisions of the agency’s rule related to combined statistical areas and rural districts.

Today’s opinion by the D.C. Court of Appeals is a resounding victory for credit unions, their members, and communities across the country.  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.

CUNA President/CEO Jim Nussle