WASHINGTON-The U.S. Court of Appeals for the District of Columbia ruled November 9 in favor of credit unions in the bankers' appeal of their lawsuit over NCUA's chartering and field of membership manual (American Bankers Association v. National Credit Union Administration, et al). "Except for one claim that we dismiss as moot and another as unripe, we find the ABA's arguments without merit and affirm the district court's dismissal of the case." Judge David Tatel wrote in the court's decision. The ABA claimed NCUA's "rule is too permissive with respect to credit union formation and growth. Except for the provision regarding pensioners, which the district court found the ABA's amended complaint failed to challenge, the district court concluded that each of the challenged provisions reflects a reasonable interpretation of the [Federal Credit Union Act] and dismissed the amended complaint pursuant to Federal Rule of Civil Procedure." The appellate court felt the same. The issues of `reasonable proximity' in relation to an `electronic facility' was determined to be unripe for judicial review, according to Tatel. "Although the parties obviously feel strongly about this issue. not one has identified an `electronic facility' that is no also an ATM," the ruling said. "The rule doesn't define `electronic facility;' the briefs never define it; and when asked at oral argument, neither counsel could define it, much less tell us whether non-ATM electronic facilities even exist. Under these circumstances, this issue is plainly unripe for judicial review." Additionally, the issue ruled moot involved an ethnicity question in determining eligibility for a community charter, but was deleted by the NCUA Board from the regulation. "It is particularly gratifying that they lost on every single one of [their points]," CUNA General Counsel Eric Richard said. He added that because the court basically approved of NCUA's rule itself, that would help credit unions in future court challenges from the bankers. CUNA has vowed to come to the aid of specific credit unions that may be challenged in court on federal issues. NAFCU President and CEO Fred Becker, a former Navy judge advocate general, said of the ruling, "The court has rejected, correctly, the bankers' attempt to use the courts to do what they cannot do as an industry: remove credit unions as a viable competitor in providing valued services to consumers nationwide." "Though disappointed in today's decision, we are not dissuaded from the need to challenge NCUA proposals and rules that we think are unfair or illegal," ABA Executive Vice President Donald Ogilvie said in a statement following the decision. He continued, saying that taxpayers are increasingly "subsidizing multi-billion dollar financial superstores." While ABA Spokesperson Charlotte Birch said, "I don't see that case (NCUA v. ABA) going any place further," she noted that there may be future challenges. "The banking industry's reasons for being concerned have not gone away." ABA will continue to challenge credit union regulation through legislation and the judicial system when it feels regulations and policies are inappropriate, she explained. "It is my hope that this unanimous ruling will be the beginning of the end to the nearly two decades of legal conflict pursued by the banking industry on both NCUA and America's credit unions," NCUA Chairman Dennis Dollar said. "I believe that both the banking and credit union community would best be served by moving their efforts forward from the courtroom to the streets of America." Before even handling the issues of the case, the court was asked to decide whether NCUA had to produce the administrative record, as ABA indicated. The court answered that the ABA's challenges can be addressed with the statute and legislative history alone. However, the decision reads, "Should the ABA have concerns about the Administration's application of the rule to specific cases, it remains free to bring an as-applied challenge." In counting potential members for a SEG, NCUA should consider each group's family members in the count, ABA advocated. The court found that the petitioners focused "too narrowly" and that Congress did not intend such a count. However, the ABA failed to raise the claim of pensioners in the relevant count of its amended complaint, so the court did not rule on that issue because NCUA could not have known that was what the group was questioning. ABA also challenged NCUA's grandfather clause, which allows new members of groups associated with credit unions prior to August 7, 1998 to become members. While the court said the ABA's case was plausible on this point, when taking the entire provision into consideration, congressional intent is not so clear. Legislative history, the court said, points toward the agency's line of thinking. ABA also challenged NCUA's consideration of a group's `desire and intent' in forming a new credit union or joining an existing one; policy on voluntary mergers of healthy credit unions; and requiring groups smaller than 3,000 members to show they are capable of running their own credit unions. All arguments were found without merit. NCUA crafted its regulation following the passage of the landmark Credit Union Membership Access Act of 1998, also known as H.R. 1151. [email protected]