NCUA’s Metsger hammers federal judge’s field-of-membership ruling

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National Credit Union Administration board member Rick Metsger charged Thursday that a federal judge went too far when she struck down two provisions of the agency’s field-of-membership regulation.

“Last week a federal district court judge issued a split decision on the four provisions the [American Bankers Association] challenged, upholding two of them, but overturning the other two,” Metsger said during the Minnesota Credit Union Network’s annual conference in Bloomington. “As is often the case in Washington, the judge got it half right.”

According to Metsger, legal precedent enshrined in the U.S. Supreme Court’s famous 1984 Chevron decision requires judges to accord federal agencies broad discretion in interpreting the statutes they administer. Judge Dabney L. Friedrich’s March 29 decision “failed to give the agency that deference,” Metsger said.

He argued that since Congress, in the Credit Union Membership Access Act, mandated that the agency define well-defined local community, neighborhood or rural district, "it is entitled to even more than the usual Chevron deference.”

While stopping short of saying the NCUA plans to appeal Friedrich’s decision, Metsger made it clear the option remains on the table.

“We are consulting with the Department of Justice, which represents the agency in federal court, and I have encouraged agency staff to consider all legal and regulatory options to address the court's decision,” Metsger said.

As reported, credit unions could face some risks should the NCUA choose to pursue an appeal.

In her 39-page decision, Friedrich invalidated one provision that allowed credit unions to use combined statistical areas to delineate fields of membership and another that increased the population of rural districts fourfold, to 1 million, even when the districts crossed state borders.

Friedrich labeled both provisions “manifestly contrary to statute,” but none of the 535 members of Congress raised any questions in the 17 months since the NCUA approved the revised field-of-membership rule in October 2016, Metsger noted.

“This is what proves that the agency was acting in a way that was manifestly consistent with the statute, because if Congress had wanted to overturn the agency’s decision it could have easily done so,” Metsger said.

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Field of membership Lawsuits Rick Metsger NCUA American Bankers Association Minnesota