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September 15, 1994

FIRST NATIONAL BANK, et al., Plaintiffs,

The opinion of the court was delivered by: JOHN H. PRATT

 On September 9, 1994, this Court conducted a hearing to consider whether the National Credit Union Administration's ("NCUA") interpretation of the "common bond provision" in the Federal Credit Union Act ("FCUA") *fn1" conflicts with the clear intent of Congress or whether the Court must defer to the NCUA's interpretation. The issue has been well-briefed on both sides. Based on the arguments and authorities presented by the parties in their briefs and during the hearing, we defer to the NCUA's interpretation of the common bond provision. Plaintiffs' renewed motion for summary judgment is denied and defendants' summary judgment motions are granted. *fn2"

 I. Background

 In 1991, the Court determined that plaintiffs did not have standing to challenge the agency decision because they were not the intended beneficiaries of the FCUA and because Congress did not intend to protect competitive interests. 772 F. Supp. 609 (D.D.C. 1991) (Harris, J.). The Court of Appeals reversed, 988 F.2d 1272 (D.C. Cir. 1993), cert. denied, U.S. , 114 S. Ct. 288 (1993), and the matter now comes before the undersigned judge for consideration on the merits.

 Plaintiffs, four North Carolina banks and the American Bankers Association, challenge the NCUA's approval of several applications by AT&T Family Federal Credit Union ("AT&T Family") to expand its membership to include the employees of unrelated employers in several areas of the United States. Plaintiffs, which are conventional banks and their trade association, contend that they are suffering from the competition caused by the expansion of AT&T Family. At the September 9th hearing, the Court concluded that it was impossible to consider the validity of the application approvals by the NCUA without examining its interpretation of the common bond provision. The remainder of this opinion will focus on the common bond provision and whether the NCUA's interpretation conflicts with Congress' intent.

 Congress first authorized federal credit unions during the Great Depression. It will be recalled that in March 1933, President Roosevelt found it necessary to close all banks and that the woeful state of the nation's banking system during the early 1930s left large segments of the population without access to necessary credit. Congress reviewed the then existing system of state licensed credit unions and determined that federal credit unions would improve access to credit for people of "small means." S.Rep. No. 55, 73d Cong., 2d Sess. 1 (1934). The basic statute was passed at that time.

 By definition, a federal credit union is owned by its members and can issue loans only to its members or to other credit unions. 12 U.S.C. § 1757. To insure sound loan policies in an era before deposit insurance, *fn3" Congress restricted membership to "groups having a common bond of occupation or association." Id. § 1759. The original purpose behind the common bond provision was twofold: to insure the financial stability of credit unions by providing a sense of cohesiveness among members and by enabling the members to establish a borrower's credit worthiness at minimum cost; and to promote the growth of credit unions because it was faster and easier to form a credit union with members who already had a common bond.

 The expansion of AT&T Family is premised on this interpretation which plaintiffs now challenge. *fn4" Plaintiffs seek injunctive and declaratory relief vacating all AT&T Family membership approvals since November 14, 1989. *fn5" Relief is sought on the theory that the NCUA's approval of the membership expansions violates the Administrative Procedure Act ("APA"). *fn6" 5 U.S.C. § 706.

 II. Analysis

 There are no material questions of fact precluding summary judgment in this case. The Court's review of an agency's interpretation of a statute must follow "the well-trodden path carved out in Chevron U.S.A., Inc. v. National Resources Defense Council, Inc., 467 U.S. 837, 81 L. Ed. 2d 694, 104 S. Ct. 2778 (1984)." Northwest Airlines, Inc. v. U.S. Dept. of Transportation, 304 U.S. App. D.C. 381, 15 F.3d 1112, 1118 (D.C. Cir. 1994). The first prong of the Chevron formulation, often called "Chevron I," asks whether the Court,

armed with the traditional tools of statutory construction, . . . can ascertain clear congressional intent on the precise issue before us.

 Id. (emphasis added). If the statutory language is silent or ambiguous on this specific issue, the Court then proceeds to the second prong of the Chevron formulation, "Chevron II." Doe v. Sullivan, 291 U.S. App. D.C. 111, 938 F.2d 1370, 1381 (D.C. Cir. 1991). Under Chevron II, the Court must determine whether the agency's interpretation of the statute is a reasonable one. We are required to ...

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