Judge issues mixed ruling on challenge to NCUA FOM rules

25542495_1752115101518706_2887136597949032630_oA U.S. district court on Thursday struck down two provisions of NCUA’s field of membership rule while upholding two others that were challenged in a lawsuit filed by the American Bankers Association.

Judge Dabney Friedrich of the U.S. District Court for the District of Columbia found that NCUA exceeded its statutory authority when it promulgated regulations that automatically qualify a combined statistical area with fewer than 2.5 million people to be a local community, and increased to 1 million people the population limit for rural districts.

New York Credit Union Association President/CEO William J. Mellin issued the following statement:

“The New York Credit Union Association disagrees with the court’s ruling that NCUA overstepped its authority when it modernized its field of membership rules. NCUA correctly and accurately understood that their field of membership rules needed to be updated to reflect the changing nature of financial services. Going forward, we urge NCUA to continue to pursue every effort to uphold its rulemaking authority, and the Association will explore all of our options for assisting the agency, credit unions and their members.”

Friedrich upheld two other challenged provisions in the regulations. One of those provisions allows credit unions to serve Core-based Statistical Areas without serving the “core” of that area, and the other allows credit unions to serve adjacent areas to well-defined local communities.

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