ABA Appeals Credit Union Field of Membership Case to Supreme Court

The American Bankers Association (ABA) last week petitioned the U.S. Supreme Court to review a lower court ruling in the association’s challenge of the National Credit Union Administration’s 2016 field of membership rule.

In August, a three-judge panel of the D.C. Circuit Court of Appeals upheld much of rule while remanding a portion related to redlining concerns. The court will grant the petition only if four of the nine justices vote to accept the case.

ABA argued that the three-judge panel’s decision “stretches Chevron deference past the breaking point” in ruling that NCUA could define a “local community” as a combined statistical area inhabited by up to 2.5 million people or define an entire state as a “rural district.” Under the Supreme Court’s Chevron doctrine, courts defer to administrative agencies’ interpretation of statutes they administer where Congress has not specifically addressed the question at issue.

Chevron cannot be applied to the statute granting NCUA authority to define terms like “local community” and “rural district” in its regulations in such a way that neglects the “reasonableness” test of the agency interpretation, ABA argued, calling for the Supreme Court to hear the case and “make clear that an express delegation of definitional authority does not authorize an agency to interpret a term in ways that exceed its ordinary range of permissible meanings.”

Read the petition.