Any federal credit union that had a rural district membership eligibility application postponed – for, in some cases, nearly two years — as a result of a now-resolved lawsuit will see its application processed immediately, the federal credit union regulator said Tuesday.
In a letter to credit unions (LTCU) the National Credit Union Administration (NCUA) said in addition to the postponed rural district membership applications, it will begin accepting new rural applications, also immediately. Federal credit unions with a rural district community charter are eligible to apply, the agency said.
The message comes in the wake of the Supreme Court’s rejection June 29 of an appeal by the American Bankers Association (ABA) of a lower court’s decision on the credit union regulator’s membership rules. The suit was originally brought in 2017, and in March of the next year a federal district court ruled in part for the banking group. Both NCUA and the bankers appealed the decision (to the D.C. Circuit Court of Appeals) which overturned the lower court’s partial decision and held up the agency’s original rule, for the most part.
The bankers appealed to the Supreme Court, which last week declined to consider the appeal – essentially ending the bankers’ challenge of the rule.
That development, NCUA said in a release Tuesday, “ends nearly four years of uncertainty and helps the NCUA foster greater financial inclusion for all Americans.”
The agency asserted that a lack of financial access is especially prevalent in rural communities, which it said have experienced the withdrawal of financial institutions over the last decade. “The Supreme Court’s decision will assist the agency’s efforts to bring these important and often overlooked communities back into the financial mainstream,” the agency said.
In addition to processing the postponed membership eligibility applications, NCUA said it was also in the process of reinstating rural districts for 18 credit unions that had these removed due to the ABA lawsuit. “The NCUA’s Office of Credit Union Resources and Expansion will contact these credit unions by July 10, 2020, to confirm the reinstatement,” the agency said. “No further action will be required for these credit unions.”
According to NCUA, proposed geographic area under its membership rules would generally qualify as a rural district if it has well-defined, contiguous geographic boundaries, and the total population of the proposed district does not exceed one million.