Court Hears Oral Arguments for NCUA FOM Appeal

Tuesday, a three-judge panel of the D.C. Circuit Court of Appeals heard the American Bankers Association’s ongoing legal challenge to the National Credit Union Administration’s field of membership (FOM) rule.

During the hearing, the judges heard NCUA’s appeal of District Judge Dabney Friedrich’s ruling overturning the provisions of the agency’s rule related to combined statistical areas and rural districts. Meanwhile, ABA is cross-appealing Friedrich’s opinion upholding the provision of the rule permitting credit unions to serve core-based statistical areas without serving the urban core that defines the area—provisions the judge upheld despite calling them “troubling,” “jarring” and “a barely reasonably interpretation of the statute.”

NCUA finalized its FOM rule in October 2016, and the American Bankers Association filed a lawsuit against the agency in December 2016. The U.S. District Court of the District of Columbia ruled in March 2018, upholding two challenged portions of the rule and striking down two provisions. 

CUNA and CUNA Mutual Group joined an amicus brief in support of the agency’s appeal, arguing that “this lawsuit is a clear and transparent attempt by bank lobbyists to hamstring credit unions’ ability to help more American consumers.”