Saying that the NCUA’s new Field of Membership rules are “arbitrary,capricious, an abuse of discretion” the American BankersAssociation has asked a federal judge to nullify theregulations.

In asking U.S. District Judge Ketanji Brown Jackson to approveits request for a Summary Judgment, the bankers said the NCUA haseroded the statutory restrictions that allow credit unions tooperate.

The rules essentially allow credit unions to gerrymander theirfields of membership to ensure that they can serve more affluentareas, the bankers said.

In October, the NCUA board approved the rules, which boardmembers said would provide credit unions with more flexibility todetermine their fields of membership. Then-board Chairman RickMetsger said the rules would make it easier for people to gainaccess to affordable financial services.

However, the ABA contends that the rules went too far. Congress,the association argues, restricted community credit unionmembership to well-defined local areas.

The ABA cited previous court rulings against the NCUA and saidthat the new rules expands the field of membership for communitycredit unions “far beyond the limits imposed by Congress.”

In addition, the NCUA “has staked out a position that isconsiderably more extreme than the one rejected by a federal court,without acknowledging or answering the court’s objections,” thebankers contend.

Credit Union trade groups reaffirmed their support of the newNCUA rules

“This suit is a meritless attack that ignores the law and theagency’s authority to regulate credit unions,” said CUNAPresident/CEO Jim Nussle.

"This suit is another outrageous effort by the banking tradegroup to distort the truth in its effort to block consumers'ability to choose a financial institution that puts them first,”said NAFCU President/CEO B. Dan Berger.