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NCUA Files Motion in FOM Suit, Asks to Deny ABA Motion
Monday, June 26, 2017 6:40 AM

The National Credit Union Administration last week filed a motion to deny the American Bankers Association request for summary judgment its lawsuit against the agency’s field-of-membership rule. The request, filed in the U.S. District Court for the District of Columbia, also asks the court to grant NCUA’s motion for summary judgment.

In the motion, NCUA says Congress has authorized it to charter community credit unions, subject to a requirement limiting membership to “a well-defined local community, neighborhood, or rural district." Further, it adds that Congress, rather than define those terms itself, directed NCUA to prescribe a definition by regulation.

NCUA argues that, despite the ABA’s claims, the rule is a “permissible construction of statute.”

The NCUA board finalized the FOM rule in October 2016, a rule strongly supported by CUNA and Cornerstone. The ABA filed suit in December, and NCUA filed a motion to dismiss the suit in March.