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July 29, 1988


The opinion of the court was delivered by: PENN

 The Massachusetts Credit Union Share Insurance Corporation, (hereafter MSIC), brought this action for declaratory and injunctive relief from the effect of a rulemaking procedure by the Board of the National Credit Union Administration, (NCUA), an independent agency of the United States organized within the Executive branch. It asserts that NCUA has violated the Administrative Procedure Act, 5 U.S.C. § 551 et seq., and exceeded the authority delegated to it by the Congress under the Federal Credit Union Act, 12 U.S.C. § 1751 et seq., by promulgating a rule requiring the credit unions which it insures to post signs and utilize advertising statements indicating that deposits in such credit union accounts are "federally insured". MSIC maintains that deposits in such credit unions are insured by NCUA only to the extent of that agency's capitalization supplemented by certain loan mechanisms authorized by the Congress. Therefore, plaintiff contends that the NCUA insurance program is not guaranteed by the full faith and credit of the United States and that NCUA's use of the term "federally insured" is misleading and will prompt state-chartered credit unions to replace their current MSIC deposit insurance with the alternate protection offered by NCUA. This matter comes before the Court on defendants' motion for judgment on the pleadings or in the alternative, summary judgment. The Court concludes for the reasons set out below that the plaintiff lacks standing to bring this action. Even were the Court to assume that the plaintiff has standing, the defendants would be entitled to judgment on the merits of the claim.


 The Massachusetts Credit Union Share Insurance Corporation was chartered by the Massachusetts Legislature in 1961 in order to provide insurance for deposits in credit unions engaged in banking operations in that commonwealth. It operates on the cooperative principle and is owned collectively by the institutions which it insures. It currently provides share and deposit insurance for nearly two hundred state-chartered credit unions and also provides insurance for deposits in excess of the $ 100,000 NCUA statutory limit held by thirty-one state-chartered credit unions and seven federal credit unions in Massachusetts.

 The National Credit Union Administration was established by the Congress in 1970 to regulate and insure all federal credit unions and to insure state-chartered credit unions that apply and qualify for participation in the National Credit Union Share Insurance Fund. 12 U.S.C. § 1781. Under Massachusetts law, all credit unions operating in the Commonwealth are required to insure deposits through either NCUA or MSIC. Mass. Gen. L. ch. 1719, § 34. In light of the mandatory choice between its services and those provided by NCUA, MSIC views itself as being in direct competition with NCUA.

 At issue in this action are advertising regulations issued by NCUA under the authority of the National Credit Union Act. *fn1" In a Notice of Proposed Rulemaking published on May 6, 1986, 50 Fed. Reg. 16710, NCUA proposed changes in both the advertising statement and the official sign in order to promote "public awareness and recognition" of NCUA as a federal entity providing protection for credit union members' savings. The Notice also contained a statement, at 16711, that the NCUA Board was considering changing the phrase on the official sign from "your savings insured to $ 100,000" to "your savings federally insured to $ 100,000", in order to aid the public in understanding the nature of the protection afforded by the share insurance program. The Notice invited comment on or before May 30, 1986.

 The president of MSIC submitted comments on an unrelated section of the proposed rule on June 17, 1986, but did not make reference to the proposed alterations in the sign or statement. On October 23, 1986, NCUA issued the final rule, 51 Fed Reg. 37549, which indicated that the phrase "your savings federally insured to $ 100,000" would become part of the sign. It noted that all comments received by NCUA concerning this provision were positive. 51 Fed. Reg. 37550. On November 25, 1986, MSIC petitioned NCUA to amend the final rule so as to remove the disputed phrase. The petition was denied on December 9, and the rule became effective on December 22, 1986. 12 C.F.R. § 740.4. Plaintiff thereafter initiated this action alleging that use of the phrase "federally insured" violates NCUA regulations proscribing advertising which is inaccurate or misrepresentative and exceeds the authority granted to the NCUA Board under the enabling legislation. MSIC further maintains that the denial by the NCUA Board to amend the rule is arbitrary and capricious action by the agency. Defendant NCUA challenges MSIC's standing to litigate.


 When a litigants' standing is challenged, as it is here, it has become almost reflexive to note that the jurisdiction of federal courts is limited, under Article III of the Constitution, to "cases" and "controversies". The recent decisions of the Supreme Court concerning the issue of standing demonstrate that, "at an irreducible minimum", Article III requires a party who invokes the court's authority to "show that he has personally suffered some actual or threatened injury as a result of the putatively illegal conduct of the defendant". Diamond v. Charles, 476 U.S. 54, 62, 106 S. Ct. 1697, 1703, 90 L. Ed. 2d 48 (1986); Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 472, 102 S. Ct. 752, 758, 70 L. Ed. 2d 700 (1982); Gladstone Realtors v. Village of Bellwood, 441 U.S. 91, 100, 99 S. Ct. 1601, 1608, 60 L. Ed. 2d 66 (1979). The injury must be such that it "fairly can be traced to the challenged action" and "is likely to be redressed by a favorable decision". Simon v. Eastern Kentucky Welfare Rights Organization, 426 U.S. 26, 38, 41, 96 S. Ct. 1917, 1924, 1926, 48 L. Ed. 2d 450 (1976). Moreover, a party seeking review must allege facts showing that it has itself been adversely affected; a mere interest in the problem, "no matter how longstanding the interest and no matter how qualified the organization is in evaluating the problem, is not sufficient by itself to render the organization 'adversely affected' or 'aggrieved' within the meaning of the APA". Sierra Club v. Morton, 405 U.S. 727, 740, 741, 92 S. Ct. 1361, 1368, 1369, 31 L. Ed. 2d 636 (1972).

 Thus, the threshold question is whether MSIC's complaint has sufficiently alleged an "injury in fact" so as to invoke the federal judicial power. MSIC maintains in its complaint that the regulation in question will result in three distinct sources of economic injury. First, it alleges that the appearance of the phrase "your savings federally insured" will have a "natural tendency" to prompt MSIC-insured credit unions to withdraw from MSIC and elect coverage under the NCUA program. Second, it posits that the alleged misrepresentation that NCUA insurance is backed by the full faith and credit of the United States will cause depositors to withdraw their savings from MSIC-insured credit unions and deposit them in NCUA-insured institutions. Finally, for much the same rationale, it contends that future new depositors will elect to become members of NCUA-insured credit unions rather than MSIC-insured institutions. The sole issue for determination is whether these grievances constitute an "injury in fact" capable of rendering the action justiciable.

 In this regard, the Supreme Court has held it is not necessary to prove a grave injury in order to sustain a challenge to standing to litigate; a minor but identifiable harm will suffice. United States v. Students Challenging Regulatory Agency Procedures (SCRAP), 412 U.S. 669, 689, n. 14, 93 S. Ct. 2405, 2417, 37 L. Ed. 2d 254 (1973). Still, pleadings must be "something more than an ingenious academic exercise in the conceivable. A plaintiff must allege that he has been or will in fact be perceptibly harmed by the challenged agency action, not that he can imagine circumstances in which he could be affected by the agency's action." The injury must not only be perceptible, concrete and distinct, Id. at 2416, but real and immediate rather than conjectural and hypothetical. California Bankers Associations v. Shultz, 416 U.S. 21, 69, 94 S. Ct. 1494, 1521, 39 L. Ed. 2d 812 (1974)(quoting O'Shea v. Littleton, 414 U.S. 488, 493-494, 94 S. Ct. 669, 695, 38 L. Ed. 2d 674 (1974).

 The complaint here merely alleges that the "natural tendency" of MSIC-insured credit unions would be to insure their depositors' accounts with NCUA only if they believed that such insurance was backed by the full faith and credit of the United States. One implication of this allegation is that if the NCUA rule regarding the official sign and advertising statement is invalidated, credit unions in Massachusetts will regard the two programs as equivalent competitors and select deposit insurance upon grounds other than the extent of the federal government's financial support of the NCUA program. Another may be that absent the NCUA sign and advertising statement, these institutions will tend to opt for MSIC insurance. The fact that at least some state-chartered credit unions in Massachusetts had, before the promulgation of the NCUA rule, elected to insure their deposits with NCUA rather than MSIC, demonstrates not only the speculative nature of the allegations, but necessarily compels the conclusion that these same institutions made the election without regard to the regulation in question. *fn2"

 In this regard, the Court notes that MSIC's president has stated that thirty-seven credit unions left MSIC in 1985 and that this event endangered the continued vitality of the corporation. Affidavit of Robert Maietta, 4, attached as Exhibit B to Plaintiff's Opposition to Defendant's Motion for Judgment on the Pleadings, filed October 20, 1987, (hereafter Plaintiff's Opposition). Nonetheless, the Court also notes that MSIC has not alleged that any of its members have left MSIC as a consequence of the NCUA rule, nor has MSIC alleged that any of its members have dropped MSIC coverage since the rule took effect for any cause. Instead, MSIC has submitted the affidavit of the manager of a state-chartered credit union which has carried MSIC insurance since 1963 which relates that the manager has "become more attuned" to seeking NCUA protection. In addition, the manager states that he has "seriously considered" the possibility of securing federal deposit protection and would "most likely" do so in the event of a destabilizing financial event. Affidavit of Robert W. Carlson, 2, attached as Exhibit C to Plaintiff's Opposition.

 Standing alone, these assertions are insufficient to justify the plaintiff's standing. "Where there is no current injury, and a party relies wholly on the threat of future injury, the fact that the party (and the court) can 'imagine circumstances in which [the party] could be affected by the agency's action is not enough.'" Northwest Airlines, Inc., v. Federal Aviation Administration, 254 U.S. App. D.C. 150, 795 F.2d 195, 201 (D.C. Cir. 1986)(quoting SCRAP, supra, 412 U.S. at 688-89, 93 S. Ct. at 2416-17)(emphasis in original). "A plaintiff or petitioner 'must demonstrate a realistic danger of sustaining a direct injury. . . . one does not have to await the consummation of threatened injury. If the injury is certainly impending that is enough.'" Northwest Airlines, 795 F.2d at 201, quoting, Babbitt v. United Farm Workers National Union, 442 U.S. 289, 298, 99 S. Ct. 2301, 2308, 60 L. Ed. 2d 895 (1979)(emphasis in original). Here however, the parties have not alleged such facts as would be necessary ...

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