The American Bankers Association (ABA) on December 7 filed a lawsuit against the National Credit Union Administration (NCUA) seeking to overturn the agency's final field of membership (FOM) rule that is scheduled to take effect on February 6, 2017.
The Final FOM Rule was published on December 7 in the Federal Register.
According to ABA's complaint, NCUA’s final rule “fails to adhere to the limitations on federal credit unions established by Congress. By exceeding these statutory limitations, the final rule upsets the balance Congress struck between granting federal credit unions tax-favored status and limiting their operations to carefully circumscribed groups or localities that share a common bond.”
ABA stated that the rule disregards Congress' explicit instruction that community credit unions serve only a single, well-defined local community. Instead, it declares that large regions including millions of residents and cutting across multiple states are single "local" communities.
Under the final rule, an FCU can apply to serve entire geographic regions. NCUA has defined Combined Statistical Areas with populations up to 2.5 million residents as a "well-defined local community." So-called “rural districts” can serve up to 1 million people, which would include the entirety of Alaska, North Dakota, South Dakota, Vermont or Wyoming.
ABA alleges that "[n]o reasonable agency could conclude that the vast areas covered by the Final Rule constitute a single "well-defined local community" or "rural district."
However, NCUA should not be confused with being a reasonable agency.
The lawsuit was filed in the United States District Court for the District of Columbia.
Read the complaint.
Read the press release.
Tax them. Give them everything banks have.
ReplyDeleteIncluding a real regulator.