The U.S. District Court for the District of Columbia is scheduled to hear motions for summary judgment Sept. 9 from the federal credit union regulator and four North Carolina banks challenging its chartering authority.
The lawsuit has been through several courts since 1991, when the banks and the American Bankers Association sued the National Credit Union Administration for allowing AT&T Family Federal Credit Union to add employee groups that have no connection to its original customer base.
The lawsuit hinges on rival interpretations of the Federal Credit Union Act of 1934. The law says, "Federal credit union membership shall be limited to groups having a common bond of occupation or association."
The agency has argued the law means a credit union can include unrelated groups if the members of each group have a bond. The NCUA has interpreted the Act this way since the early 1980s.
The ABA argues the language means all customers of the credit union must share a common bond.
"The words of the statute say what they say and say what they mean," said Michael Crotty, deputy general counsel for litigation for the American Bankers Association. "If they don't like what the law says, change it, don't ignore it."
