National Credit Union Administration v. First National Bank & Trust Co.

Background

A group of five commercial banks and the American Bankers Association sued the National Credit Union Administration (NCUA) and an AT&T federal credit union after the agency allowed credit unions to add multiple unrelated employer groups. The AT&T Family Federal Credit Union grew to about 110,000 members after the agency’s 1982 interpretation; only about 35% were AT&T employees. The banks sued under a federal law that allows people to challenge agency actions, arguing the statute requires a single “common bond” tying all members together.

Reasoning

The Court addressed two main questions: whether the banks could sue and whether the NCUA’s interpretation was lawful. The majority found the banks’ interest in limiting the markets credit unions may serve is “arguably” protected by the membership rule, so they can bring their challenge. On the merits, the Court concluded the statute unambiguously requires one common bond for an occupationally defined credit union, and the NCUA’s multiple-group interpretation was not permitted under the usual test for reviewing agency rules.

Real world impact

The ruling lets banks and trade groups continue to challenge agency approvals that add unrelated employer groups to credit unions, and it invalidates the NCUA’s broad practice allowing such expansions. The decision affects many credit unions that relied on the 1982 interpretation and limits how credit unions may expand membership going forward.

Dissents or concurrances

Justice O’Connor (joined by Justices Stevens, Souter, and Breyer) dissented, arguing the Court misapplied the zone-of-interests test and would have held the banks lacked the right to sue.