National Credit Union Administration v. First National Bank & Trust Co.
522 U.S. 479 (1998)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
The Federal Credit Union Act's requirement that membership be limited to 'groups having a common bond of occupation' unambiguously requires that all members of an occupationally-defined credit union must be united by a single, common bond.
Facts:
- The Federal Credit Union Act (FCUA) of 1934 limits membership in federal credit unions to 'groups having a common bond of occupation or association, or to groups within a well-defined neighborhood, community, or rural district.'
- Until 1982, the National Credit Union Administration (NCUA) interpreted this provision to require all members of a single credit union to share the same common bond.
- In 1982, the NCUA reversed its policy, interpreting the law to permit a credit union to be composed of multiple, unrelated employer groups, where each group possessed its own distinct common bond.
- Following this change, AT&T Family Federal Credit Union (ATTF) expanded its membership to include employees from numerous unrelated companies such as Coca-Cola Bottling Company and the American Tobacco Company.
- By 1990, only 35% of ATTF's members were employees of AT&T and its affiliates.
- In 1990, the NCUA approved charter amendments allowing ATTF to add several more unrelated employer groups.
- A group of commercial banks and the American Bankers Association, who are competitors of federal credit unions, objected to this expansion.
Procedural Posture:
- The American Bankers Association and five commercial banks sued the National Credit Union Administration (NCUA) in the U.S. District Court for the District of Columbia.
- The District Court initially dismissed the complaint, finding the banks lacked prudential standing.
- The U.S. Court of Appeals for the D.C. Circuit reversed the dismissal, holding that the banks did have standing to sue.
- On remand, the District Court granted summary judgment for the NCUA, ruling under Chevron that the agency's interpretation of the FCUA was permissible because the statute was ambiguous.
- The D.C. Circuit reversed again, finding the statute unambiguous and holding the NCUA's interpretation impermissible under Chevron step one.
- The NCUA and the credit unions (petitioners) were granted a writ of certiorari by the U.S. Supreme Court.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does Section 109 of the Federal Credit Union Act, which limits membership to 'groups having a common bond of occupation,' permit the National Credit Union Administration to interpret the statute as allowing a federal credit union to be composed of multiple, unrelated employer groups, each with its own separate common bond?
Opinions:
Majority - Justice Thomas
No, the NCUA's interpretation is not permissible. The Federal Credit Union Act unambiguously requires that the same common bond of occupation must unite every member of an occupationally-defined federal credit union. Reasoning: The court first held that the respondent banks had prudential standing under the Administrative Procedure Act (APA). The 'zone of interests' test does not require a showing of congressional intent to benefit the plaintiff; it only requires that the plaintiff's interest be 'arguably within the zone of interests to be protected' by the statute. Because § 109 limits the markets that credit unions can serve, the banks, as competitors, have an interest in enforcing that limitation, which falls within the statute's zone of interests. On the merits, the court applied the first step of the Chevron analysis. It concluded that Congress had spoken directly to the precise question at issue. This conclusion was based on several tools of statutory construction: (1) The NCUA’s interpretation renders the term 'common bond' surplusage, as each individual employer group already has its own common bond before being joined into the larger credit union. (2) The canon of consistent interpretation requires that the occupational limitation ('groups having a common bond') be read in parallel with the geographical limitation ('groups within a well-defined neighborhood'), which the NCUA concedes refers to a single geographic area. (3) The statute's express purpose is to 'limit' membership; the NCUA's interpretation would permit a limitless result, potentially allowing a credit union to include employees of every company in the nation, thus reading the word 'limited' out of the statute. Because the statute is unambiguous, the agency's contrary interpretation is impermissible.
Dissenting - Justice O'Connor
The Court should not have reached the merits of the case because the respondent banks lack prudential standing to bring this lawsuit. Reasoning: The majority eviscerates the 'zone of interests' test by conflating it with the Article III injury-in-fact requirement. Under the majority’s approach, any party that suffers a competitive injury will have standing, effectively eliminating the prudential standing doctrine. The proper inquiry is whether the injury complained of—competitive harm to banks—falls within the zone of interests the statute was intended to protect. The legislative history of the FCUA shows that the common bond provision was intended to ensure the financial stability and cooperative nature of credit unions for the benefit of their members, not to protect the commercial interests of competing banks. The banks' interests are, at best, 'marginally related to or inconsistent with the purposes implicit in the statute,' and thus they are not suitable challengers to the NCUA's interpretation.
Analysis:
This decision is significant in administrative law for its application of Chevron step one, demonstrating that courts will use traditional tools of statutory interpretation to find a clear congressional intent, thereby denying deference to an agency's contrary interpretation. It reinforces that an agency cannot create ambiguity where the statutory structure and context provide a clear meaning. Additionally, the ruling solidifies a broad test for competitor standing under the APA, allowing parties to challenge regulations that expand their competitors' market, even when Congress did not intend to protect the challengers' specific interests.
Unlock the full brief for National Credit Union Administration v. First National Bank & Trust Co.