With request for court review of decision, banks still gunning for credit union regulator’s membership rules

It’s not over yet for legal challenges to membership rules by the federal regulator of credit unions, as the banking industry is seeking review of an appeals court decision that mostly held up the regulations.

The American Bankers Association (ABA) said Friday that it has filed a petition with the full U.S. Court of Appeals for the District of Columbia Circuit seeking review of the decision by a three-judge panel of the court this past summer upholding much of the National Credit Union Administration’s (NCUA) 2016 field of membership rule.

In its Aug. 20 ruling, the three-judge panel 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 its filings late last week, the bankers are requesting a rehearing of the August decision by the full (or “en banc”) panel of judges in the D.C. Appeals Court. The ABA argued that the August decision distorted long-time court views that regulators must be given deference when making rules (under the Supreme Court’s so-called “Chevron doctrine,” courts defer to administrative agencies’ interpretation of statutes they administer where Congress has not specifically addressed the question at issue).

“Rehearing en banc is warranted to realign this Court’s Chevron jurisprudence with that of the Supreme Court,” the bankers’ group stated.

The group also asserted that the August decision was incompatible with judicial review under the Administrative Procedure Act and thus warranted review.

ABA Challenges Appellate Court’s Reliance on Chevron Doctrine in NCUA Ruling

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