HARRISBURG, Penn. – In another win for the bankers, a federal court ruled today that NCUA overstepped its authority when it approved three vast community charters.
"Under all the circumstances, the decision of NCUA is arbitrary and capricious and must be set aside," ruled Judge Yvette Kane, of the U.S. District Court for the Middle District of Pennsylvania. She scheduled a hearing for 30 days to determine a remedy in the case.
The American Bankers Association argued that NCUA overstepped its authority in 2003 when it allowed Members 1st FCU to serve a six-county area covering about 1.2 million people. The NCUA ruling was subsequently used to grant two similar charters for New Cumberland FCU and AmeriChoice FCU.
NCUA has lost at least two other court challenges to the bankers over field of membership. They include a ruling in Utah finding NCUA’s underserved expansions process flawed, and the landmark AT&T Family FCU case which struck down NCUA’s multiple groups FOM policy.
