ABA asks Supreme Court to settle disputed credit union membership rule

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The American Bankers Association has filed a petition asking the Supreme Court to hear its challenge to the National Credit Union Administration’s field-of-membership rule.

The move breathes new life into a case that had appeared to have been settled when the U.S. Court of Appeals for the District of Columbia ruled in August that the NCUA had “vast discretion” to define the membership regulations governing federal credit unions.

The NCUA’s governing board approved revised field-of-membership rules in December 2016 making it easier for credit unions in rural districts to widen their membership and allowing a combined statistical area of 2.5 million inhabitants to qualify as a well-defined local community.

The ABA challenged the field-of-membership rule shortly after the NCUA's approval, filing a lawsuit in the U.S. District Court for the District of Columbia. That case resulted in a split decision in March 2018, with Judge Dabney Friedrich upholding two of the four provisions and striking the others down. The appeals court decision reversed Friedrich's findings.

The ABA’s lawyer, Robert Long, a Covington partner who co-chairs the firm’s appellate and Supreme Court litigation group, has argued that the rule stretches the Chevron doctrine past its breaking point, a claim he repeated in his petition for certiorari.

The Chevron doctrine grants federal agencies wide latitude to interpret rules delegated to them by Congress.

“Under the regulation challenged here and upheld below, sprawling regions containing dozens of cities and counties automatically qualify as single local communities,” Long wrote.

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Law and regulation American Bankers Association NCUA