ABA Seeking Discovery in Pa. Lawsuit Against NCUA

HARRISBURG, Pa. – The American Bankers Association has filed a motion for discovery in its lawsuit against the NCUA challenging its definition of a local, well-defined community. ABA did not mince words when it stated in its motion, “Ignoring Congress and the courts, the NCUA has abdicated its regulatory responsibilities and become the willing ally of credit unions such as the intervenors in this case that seek to become the marketplace equivalent of banks while continuing to enjoy tax breaks meant to be shared only by traditional credit unions serving defined memberships. Among other things, NCUA’s abdication of its responsibilities has led members of Congress to question the NCUA’s impartiality and has prompted requests for two GAO investigations.” ABA also argues that the field of membership application process is generally closed to the public other than the final approval and that there is no opportunity for public comment. The bankers accuse NCUA staff of “working collaboratively with credit union applicants to ensure that problematic information does not interfere with the foreordained result.” The result is a one-sided application that leads to “arbitrary decisions that have no basis in fact.” According to ABA, discovery is appropriate in this case because the administrative record does not include all the relevant factors. “A reviewing court may also consider evidence not included in the administrative record when.the evidence is needed to demonstrate how the agency failed to consider all relevant factors.” CUNA General Counsel Eric Richard disagreed, stating, “We do not think discovery is necessary or even proper and will make that argument to the Court as forcefully as possible. If discovery is permitted, this case may take many months to unfold.” NCUA and the intervenors for the defense in the case-counting CUNA, NAFCU, the Pennsylvania Credit Union Association, Members 1st FCU, AmeriChoice FCU, and New Cumberland FCU-have until May 22 to respond. NCUA approved a six-county community field of membership for Members 1st and approvals were subsequently granted for AmeriChoice and New Cumberland. “NAFCU does not believe that the bankers’ assertions regarding discovery are warranted and we are carefully considering our response to the court,” NAFCU Public Relations Manager Rebecca Somers said. -