NCUA appeals adverse ruling on credit union field of membership

The federal regulator of credit unions on Wednesday filed an appeal of a March 29 federal district court ruling vacating two provisions of the agency’s chartering and field-of-membership (FOM) rule.

The American Bankers Association (ABA), in a suit filed in the U.S. District Court for the District of Columbia, is challenging National Credit Union Administration (NCUA) rule changes adopted by the agency board in October 2016 and which took effect in February 2017. The portions vacated in the March 29 order include a provision that qualifies a “combined statistical area” with fewer than 2.5 million people as a “local community” that can be served by a credit union; and one raising to 1 million people the population limit for rural districts that may be served.

NCUA, in a notice last month, told the court that the agency will not grant any new community charters under the vacated rule provisions while the order is in effect. It says it has also instructed affected credit unions during this time not to accept any new members who would only be eligible for membership under those provisions.

The agency said it will not require credit unions to de-list members who became members on or before April 4, 2018.

NCUA filed its appeal with the U.S. Court of Appeals for the District of Columbia Circuit.

NCUA notice of appeal

NCUA notice filed April 19, 2018, in FOM lawsuit