MAY 2018

USA
Setback for National Credit Union Administration in US court battle
A legal battle in the US between the
National Credit Union Administration
(NCUA) and the American Bankers
Association, over the size of the field of
membership permitted for credit unions,
saw mixed results in a federal ruling.
A federal judge in the US District Court
upheld two portions of the NCUA’s rules
but struck down two others, following
a lawsuit launched by the ABA in
December 2016.
Bankers had complained that some
credit unions have grown too large, when
their membership is supposed to be
limited by association or geographic area.
The two provisions struck down by
Judge Dabney Friedrich were:
• a measure that automatically qualified
a combined statistical area of up to 2.5
million people to be a local community
• and a provision that increased the
population limit for rural districts to
1 million people.
Other provisions – one on serving corebased
statistical areas without serving
their urban core, and another adding
“adjacent areas” to existing community
fields of membership — were left in place.
The ABA had argued that the contested
rules were in violation of “Congress’
explicit instruction that community credit
unions serve only a single, well-defined
local community
“Instead, it declares that large regions
including millions of residents and
cutting across multiple states are single
‘local’ communities.”
National credit union trade groups,
including the National Association of
Federally-Insured Credit Unions, the
Credit Union National Association and
CUNA Mutual Group, criticised the ruling.
“Our organisations are pleased the court
upheld components of the NCUA’s fieldof-membership
rule; however, we strongly
disagree with the court’s decision that
aspects of the rule exceed the agency’s
legal authority,” said a joint statement.
“The field-of-membership rule is not
only entirely consistent with the Federal
Credit Union Act, but also credit unions
must have the ability to grow and serve
more Americans. We will continue to
support the agency on this critical issue.”
NCUA says it is considering its options,
although others have warned that an
appeal could provoke the ABA into
continuing its fight against the measures
which survived the judge’s ruling.
EUROPEAN UNION
European Parliament supports regulatory relief for credit unions
Credit union representatives went to the
European Parliament in Brussels to push
for regulatory relief.
The meeting, on 27 March, brought
together the European Network of Credit
Unions and the European Parliament
Credit Union Interest Group. The network
estimates that credit unions serve more
than 7 million European households.
The caucus was launched in 2014
as an informal, all-party European
Parliamentary Group to raise awareness
about credit unions and micro-finance
among EU institutions and stakeholders.
It is made up of 15 members of the
European Parliament who support credit
unions, including co-chair Marian Harkin
(Republic of Ireland) and vice chair Paul
Tang (Netherlands).
They were joined by Sven Giegold
(Germany), a member of the Economic and
Monetary Affairs Committee (ECON), in
p MEPs Paul Tang and Marian Harkin; Michael S. Edwards, VP and general counsel, WOCCU; and
MEPs Sven Giegold and Luke Ming Flanagan (Image: WOCCU)
highlighting ways to reduce unnecessary
regulatory burdens and support increased
credit union activities in the EU.
Mr Giegold said: “We need to preserve
the business model of smaller, low-risk
actors such as good credit unions which
play a useful role for the stability of the
European banking sector. Financial
regulation must not overburden small
banks with administrative requirements
but needs to properly address the risks
posed by systemic institutions.”
Representatives from the Irish League
of Credit Unions, the National Association
of Co-operative Savings and Credit Unions
of Poland, the Estonian Union of Credit
Cooperatives, and World Council of Credit
Unions also explained how EU policy
could provide regulatory relief for credit
unions in Europe.
18 | MAY 2018