The ABA (American Bankers Association) is suing The National Credit Union Administration (NCUA), a federal agency. The ABA believes that a new rule allows too many people to join credit unions and that this practice is unfair to banks. As Green Sheet readers know, credit unions can provide the same services as banks, but usually at a lower cost.
The rule in question was enacted December 17 and is the result of a bill that was passed last summer. That bill overruled a Supreme Court decision and allowed credit unions to offer memberships to more than one occupational group. The only stipulation is that each group cannot have more than 3,000 members.
The chairman of the ABAís credit union advisory group said, "Thereís no doubt in our minds that the rule violates both the letter and intent of the law." The ABA believes that the rule, which was meant to help small local credit unions, is being abused by allowing it to apply to large credit unions.
The suit comes as no surprise to the National Credit Union Administration. Norman DíArmorous of the agency said, "I believe they would have filed suit regardless of how our final regulation looked."
The ABA feels the Credit Union Membership Access Act that Congress passed in August is unfair because it allows the Credit Unions to take members from more than one employment group.
Now the NCUA has support from another industry group, the Credit Union National Association, which serves more than 90% of Americaís 11,300 credit unions. "By intervening in this suit we will ensure that credit unions are vigorously and aggressively represented in this litigation," said Dan Mica, CUNA president.
"By suing yet again, just months after being repudiated by Congress, the bankers have crossed the line between legitimate debate and harassment," Mica added. "The banksí effort to stifle consumer choice has reached a new low."
"The bottom line in this entire battle is that consumers would be denied a choice if the banks once again find a way to stop us from growing," Mica added.
