FCUs must be allowed access to federal courts, says CUNA brief

CUNA supports federal credit unions’ access to federal courts via diversity jurisdiction, one of the two methods for a federal court to have jurisdiction, the association indicated in an amicus brief filed Monday. CUNA’s brief was submitted to the U.S. Court of Appeals for the Fourth District, in response to a decision by the U.S. District Court for the Eastern District of Virginia that found Section 1332 of the U.S. Code is the sole source of diversity jurisdiction and that Section 1332 does not apply to federally chartered corporations.

CUNA’s brief, filed in Navy FCU v. LTD Financial Services et al, says that by foreclosing the ability for federal credit unions to invoke diversity jurisdiction, the court has failed to give effect to Congressional intent to treat federal and state credit unions alike in all material respects.

“The District Court’s decision below closes the federal courthouse door for a significant number of CUNA’s members. It wholly deprives federal credit unions of the ability to bring a diversity action in the first instance, or to remove a case to federal court based on diversity,” the brief reads. “The ruling creates an unwarranted discrepancy between CUNA’s state and federal credit union members… There is no basis in the text or legislative history of the FCUA to believe that Congress intended such disparate treatment of institutions otherwise treated equally in all material respects.”


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