Oral arguments underway in NCUA’s appeal on FOM rule, challenged by bankers

Credit Union National Association attended oral arguments Tuesday before a three-judge panel of the DC Circuit Court of Appeals in American Bankers Association’s ongoing legal challenge to the National Credit Union Administration’s field of membership rule.

NCUA finalized its FOM rule in October 2016, and the American Bankers Association sued the agency in December 2016. The U.S. District Court of the District of Columbia ruled in March 2018, upholding two challenged portions of the rule and striking down two provisions.

CUNA joined CUNA Mutual Group and the National Association of Federally Insured Credit Unions to file a brief in support of the agency in December. CUNA believes the U.S. District Court of the District of Columbia erred in its finding that the agency overstepped its statutory authority with regard to the combined statistical area approach and the definition of rural district.

During the hearing, the judges considered NCUA’s appeal of District Judge Dabney Friedrich’s ruling overturning the provisions of the agency’s rule related to combined statistical areas and rural districts.

The Court also considered ABA’s cross-appeal on those portions of Friedrich’s opinion upholding the provision of the rule permitting credit unions to serve core-based statistical areas without serving the urban core that defines the area.

Source: CUNA News