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1 1 (September 5, 2019)

handle is hein.crs/govbbay0001 and id is 1 raw text is: Congressional ______ **Research Service Appeals Court Clears Most Roadblocks to Credit Union Expansion Regulations September 5, 2019 On August 16, 2019, a unanimous three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) upheld National Credit Union Administration (NCUA) regulations expanding the ability of community credit unions to draw members from wider geographic areas than previously permitted. The decision, American Bankers Association v. National Credit Union Administration, is an outgrowth of long-standing competition between community credit unions and community banks and is not likely to settle the issue. The appellate decision differs sharply from and largely reverses a 2018 district court decision that had vacated provisions of the credit union field-of- membership and chartering regulations, issued in 2016, and held them to be beyond the agency's authority under the Federal Credit Union Act (the Act). Whether the American Bankers Association (ABA) seeks further review, either from the D.C. Circuit sitting en banc or from the Supreme Court, the rivalry between community credit unions and community banks and the differences in how they are regulated may provoke congressional interest. That is because, as discussed here, these two types of depository institutions share similar business models and are likely to vie for the same clientele, but are subject to distinct regulatory regimes and tax treatment. Background This case involves challenges to four aspects of how the 2016 regulations reinterpret field-of-membership requirements for community credit unions. Unlike banks, which may offer their services to any customers, federal credit unions, are member-owned cooperatives that are restricted to serving only their members, and membership must be based on a common bond of occupation or association, or, in the case of community credit unions, geographical area. Under the Act, community credit unions are required to have a common bond limiting their membership to [p]ersons or organizations within a well-defined local community, neighborhood, or rural district. In 1998, following a Supreme Court decision invalidating an NCUA regulation permitting credit unions to have multiple common bonds, Congress enacted the Credit Union Membership Access Act, P.L. 105-219, reversing that decision and permitting multiple-group credit unions under certain circumstances. That legislation also delegated broad authority to the NCUA to construe the language at issue in the current case and to mak[e] any determination with regard to the field of membership of a [community] credit union. Challenged Aspects of the NCUA's 2016 Regulations Congressional Research Service https://crsreports.congress.gov LSB10345 CRS Legal Sidebar Prepared for Members and Committees of Congress