In a December 9 letter to the National Credit Union Administration (NCUA), The American Bankers Association (ABA) reiterated its strong opposition to two proposed amendments that would further expand the already loose fields of membership (FOM) from which credit unions can draw their customers.
NCUA proposed to re-adopt a recently repealed provision of its rules defining any combined statistical area as a single local community, provided it has a population of 2.5 million people or less.
NCUA also objected to the expansion of the population threshold to 1 million people for a rural district. ABA contended that this would allow whole states to be treated as rural districts.
NCUA also proposed to reaffirm its elimination of a requirement for credit unions serving a core-based statistical area to serve the urban core of the community, which would effectively allow credit unions to engage in redlining by allowing them to construct fields of membership consisting of wealthier suburbs without lower-income core neighborhoods.
ABA, which previously challenged the NCUA’s field of membership rule in federal court, noted that “these proposals are seriously flawed” and called for them to be withdrawn or significantly revised.
In a related news, NCUA on November 21 filed its response to the ABA’s petition for an en banc rehearing of its lawsuit challenging the NCUA's 2016 FOM rule.
In its en banc petition, ABA argued the three-judge panel’s decision “stretches Chevron deference beyond its limits.”
NCUA argued the unanimous panel correctly concluded that NCUA reasonably interpreted the terms “local community” and “rural district” under Chevron. NCUA claimed that it reasonably relied on population size, commuting patterns, population density, and economic activity to determine whether an area is a “local community” or “rural district.”
NCUA argued that the three-judge panel's decision does not warrant rehearing en banc.
Read ABA's comment letter.
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