trending Market Intelligence /marketintelligence/en/news-insights/trending/aehAhm6WewYmfCxjSws56A2 content esgSubNav
In This List

Appeals court upholds most of NCUA's field of membership rule

Podcast

Street Talk Episode 87

Blog

A New Dawn for European Bank M&A Top 5 Trends

Blog

Insight Weekly: US banks' loan growth; record share buybacks; utility M&A outlook

Blog

Banking Essentials Newsletter 2021: December Edition


Appeals court upholds most of NCUA's field of membership rule

The U.S. Court of Appeals for the District of Columbia Circuit upheld substantially all parts of the National Credit Union Administration's field of membership rule, overturning a previous opinion by the U.S. District Court for the District of Columbia.

The ruling allows 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 also asked the NCUA to explain further the removal of a requirement to serve the "core" of a core-based statistical area.

NCUA finalized the field of membership rule in October 2016. Two months later, it was sued by the American Bankers Association, with the latter arguing that the NCUA surpassed its statutory authority and that the rule is "arbitrary and capricious."

In March 2018, the D.C. court said because the rule automatically qualifies areas larger than states as rural districts despite the term commonly referring to areas smaller than a county, the NCUA's definitional decision is "unreasonable and manifestly contrary to the statute."

A joint statement by the Credit Union National Association, the National Association of Federally-Insured Credit Unions and the CUNA Mutual Group referred to the appeals court's decision as "a big win for credit unions." Meanwhile, American Bankers Association President and CEO Rob Nichols said, "[W]e are disappointed the court ruled that rural districts may be large and cross state lines. We further disagree with the court's reasoning that a local community may be larger than a county."