Congressman Jim Kolbe
5TH DISTRICT ARIZONA
ISSUE POSITION
I am pleased to inform you of a recent court ruling important to
credit unions. On March 10th, US District Court Judge Colleen
Kollar-Kotelly rejected a request from the American Bankers
Association for a preliminary injunction against the National Credit
Union Administration (NCUA).
The American Bankers Association had sued the federal credit
union regulators over the NCUA's field of membership rules, adopted
after Congress allowed broader fields in last year's Credit Union Membership Access Act.
The ABA challenged the legality of the rules and asked the court to
impose a preliminary injunction barring the NCUA from approving
membership expansions until the case is decided on the merits.
One key issue presented by the bankers' request for an
injunction was whether the NCUA rules impermissibly expanded on the
legislation's 3,000-member limit on groups that can be added to
"multiple common-bond" credit unions. The judge found that the
NCUA's interpretation of the new legislative authority is a
reasonable interpretation of last year's law. Further, Judge
Kollar-Kotelly found nothing sufficient to support a preliminary
injunction. Concluding that the ABA is unlikely to succeed on the
merits of most of its claims, the court denied the preliminary
injunction.
In summary, the strength of Judge Kollar-Kotelly's ruling
indicates it is highly unlikely that the US courts will support
additional challenges to the credit union membership rules
promulgated by the Credit Union Membership Access Act.
I was an original cosponsor of H.R.
1151, the Credit
Union Membership Act. Credit
unions provide a great service to our communities. Many people, like
me, use credit unions regularly. The financial services industry is
changing rapidly, however, and competition is increasing between
banks and credit unions for customer loyalty and deposits. This law
ensures that the principles of fairness and the needs of the
consumer are top priorities. I am extremely pleased that the US
District Court agrees.
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