A federal appeals court on August 20 dismissed most of the American Bankers Association’s challenge to the Field of Membership (FOM) updates by National Credit Union Administration (NCUA).
The U.S. Appeals Court for the District of Columbia reversed District Judge Dabney Friedrich’s ruling overturning the provisions of the agency’s rule related to combined statistical areas and the increase in the population size of rural districts.
However, with the regard to the elimination of the urban-core requirement for local communities based upon a Core-Based Statistical Areas, the court recognized the potential of gerrymandered redlining. The court ordered the District Court to issue a summery judgement in favor of the American Bankers Association, but stated that the agency may be able to offer a satisfactory reason on remand.
In its decision, the court noted that Congress gave the agency wide discretion to make these policy decisions, but its authority is not limitless.
The court also stated that the plaintiff can bring an applied challenge to local communities that exceed NCUA's authority.
NCUA stated that it is reviewing the Court's decision and will provide guidance to affected credit unions in the near future.
Read the decision.
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