ABA Files Brief in CU Field of Membership Appeal

The American Bankers Association (ABA) on January 18 filed an appeal and response brief in its ongoing legal challenge to the National Credit Union Administration’s field of membership rule.

NCUA appealed Judge Dabney Friedrich’s March 2018 ruling invalidating two aspects of the rule -- (1) a Combined Statistical Area with fewer than 2.5 million people meets the requirement of being well-defined local community and (2) the expansion of the population of a “rural district” from 250,000 people to 1 million people.

ABA filed a cross-appeal challenging Judge Friedrich’s decision to uphold provisions of the rule that permit credit unions to serve core-based statistical areas without serving the urban core that defines the area -- despite calling the provisions as “troubling,” “jarring” and “a barely reasonably interpretation of the statute.”

In ABA’s brief, the association argued that NCUA’s rule on core-based statistical areas would allow credit unions to serve disparate local communities without serving the core that connects them, which would authorize credit unions “to effectively engage in ‘redlining’ by refusing to serve urban areas of the community with the highest concentrations of lower-income and minority individuals.”

ABA's brief also defended the legal reasoning behind the judge’s findings vacating portions of the NCUA rule related to combined statistical areas and rural districts.