NCUA considering appeal of FOM decision

NCUA headquarters

The NCUA is currently considering whether to appeal the U.S. District Court for the District of Columbia’s recent decision to strike down provisions of the agency’s field-of-membership (FOM) rule related to rural districts and combined statistical areas. NAFCU continues to support the underlying legality of the NCUA’s FOM rule.

The consideration was noted in the NCUA’s notice filed with the court Thursday outlining how it will implement the recent decision.

The notice indicates NCUA has instructed credit unions to not accept any new members who would only be eligible under the vacated portions of the FOM rule. However, credit unions can continue to serve existing members who would have been ruled ineligible by the court’s decision, so long as they became members by April 4.

The NCUA argued that if the court’s decision meant credit unions could no longer serve existing members, it would “punish individuals and entities who did nothing wrong and who were not parties in this litigation.” The agency cited the Federal Credit Union Act’s “once a member, always a member” provision and previous practice in its reasoning.

 

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