Credit union victory in NCUA FOM challenge

NCUA headquarters

The D.C. Circuit Court of Appeals issued an opinion today upholding almost all portions of the NCUA’s field of membership (FOM) rule, which had been challenged by 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, thereby allowing 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.

 

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