A phased approach to implementing the impact on credit union membership rules of a federal judge’s decision will be taken by the federal regulator of credit unions, the agency’s head said Wednesday.
National Credit Union Administration (NCUA) Board Chairman Rodney Hood in a statement said the agency’s phased approach to implementing the Aug. 20 decision by the U.S. Court of Appeals for the D.C. Circuit (in American Bankers Association v. NCUA) is necessary because the court’s ruling remains subject to requests for further review.
In its Aug. 20 ruling, the court said NCUA holds “vast discretion to define terms because Congress expressly has given it such power.” However, the court also stated that the authority is not boundless. “The agency must craft a reasonable definition consistent with the Act’s text and purposes,” the court stated.
In his statement, Hood said that “in the near future” the agency would consider a limited proposal to address the definition of local community. The federal court, in its decision, focused on the definition of “Core-Based Statistical Areas” that do not include the urban core.
Hood also said that, for credit unions serving rural districts, the agency will permit federal credit unions to submit applications seeking expanded rural districts serving geographic regions that encompass up to 1 million people and that meet the other requirements set forth in the agency’s field-of-membership rules. “The NCUA will act on such applications at the appropriate time,” Hood said.
He also noted that the D.C. Circuit upheld that portion of NCUA’s 2016 rule which allowed charters serving “Combined Statistical Areas,” or a portion thereof, subject to a 2.5-million person limit. “We will announce further guidance on this issue shortly,” he said.
He noted that the agency anticipates issuing a proposed rulemaking with a public comment period.
Chairman Hood: NCUA Will Take Phased Approach to Implement FOM Rule