American Bankers Association v. NCUA, No. 16-02394 (D.C. District Court) (Field of Membership)

Defendant National Credit Union Administration (“NCUA” or “Defendant”), through itsundersigned counsel, hereby answers American Bankers Association’s (“Plaintiff”) Complaint inthe above-captioned matter as follows.

The unnumbered introductory paragraph consists of legal conclusions to which no responseis required but, to the extent a response is required, it is denied. Defendant further states that thisparagraph does not set forth a claim for relief or aver facts in support of a claim to which an answeris required.

Defendant neither admits nor denies the heading prior to paragraph 1.

1. In response to this paragraph, Defendant denies that the rule Plaintiff challenges inthis action—Chartering and Field of Membership Manual, 81 Fed. Reg. 88,412 (Dec. 7, 2016)(“Final Rule”)—“expand[s] the universe of members eligible to join a single federally-chartered credit union well beyond the limits established by Congress,” and further states that the firstsentence constitutes Plaintiff’s characterization of this lawsuit, to which no response is required.Defendant admits that the Final Rule is attached as an exhibit to Plaintiff’s Complaint.

2. This paragraph consists of Plaintiff’s legal conclusions and characterization of theFederal Credit Union Act (“FCUA”) and a note accompanying 12 U.S.C. § 1751, to which noresponse is required. To the extent a response is required, the allegations are denied.

3. The first sentence of this paragraph is a legal conclusion to which no response isrequired. The remainder of this paragraph consists of Plaintiff’s characterization of a noteaccompanying 12 U.S.C. § 1751 and a judicial decision. Defendant avers that these sources speakfor themselves, respectfully refers the Court to these sources for a full and accurate description oftheir contents, and denies this paragraph to the extent that it is inconsistent with these sources.

4. This paragraph consists of Plaintiff’s legal conclusions and characterization of 12U.S.C. § 1759(b), to which no response is required. To the extent a response is required, theallegations are denied.

5. This paragraph consists of Plaintiff’s characterization of a statute, to which noresponse is required. Defendant respectfully refers the Court to that statute for a full and accuratedescription of its contents.

6. This paragraph consists of Plaintiff’s legal conclusions to which no response isrequired but, to the extent a response is required, it is denied.

7. The first sentence of this paragraph—as well as Plaintiff’s characterization of theFinal Rule as expanding the definition of “rural district” beyond reasonable limits—consists ofPlaintiff’s legal conclusions to which no response is required but, to the extent a response isrequired, it is denied. The remainder of this paragraph consists of Plaintiff’s characterization of the Final Rule. Defendant avers that the Final Rule speaks for itself, denies that this paragraphconstitutes a full and accurate description of the Final Rule, respectfully refers the Court to theFinal Rule for a full and accurate description of its contents, and denies this paragraph to the extentit is inconsistent with the Final Rule.

8. The first sentence of this paragraph is a legal conclusion to which no response isrequired but, to the extent a response is required, it is denied. The remainder of this paragraphconsists of Plaintiff’s discussion of two judicial decisions. Plaintiff’s discussion of thesedecisions—neither of which involved the Final Rule at issue here—is irrelevant to this action, andDefendant, therefore, denies that these allegations constitute a short and plain statement of theclaim showing that Plaintiff is entitled to relief under Fed. R. Civ. P. 8(a)(2). Defendant furtherdenies that this paragraph constitutes a complete and accurate description of these judicialdecisions and respectfully refers the Court to these decisions for a full and accurate description oftheir contents.

9. This paragraph consists of Plaintiff’s legal conclusions to which no response isrequired but, to the extent a response is required, it is denied.

10. Defendant admits that Plaintiff purports to bring this action under the FCUA andAdministrative Procedure Act (“APA”) but denies that the Final Rule violates the APA or iscontrary to the FCUA, denies that the Final Rule is arbitrary, capricious, an abuse of discretion,and otherwise not in accordance with law, and states Plaintiff is entitled to no relief in this action.

Defendant neither admits nor denies the heading between paragraphs 10 and 11.

11. Defendant lacks knowledge and information sufficient to form a belief as to thetruth of the allegations in this paragraph.

12. Admit, except aver that NCUA is an independent agency.

Defendant neither admits nor denies the heading between paragraphs 12 and 13.

13. Defendant admits that Plaintiff purports to bring this action under the FCUA andthe APA but states that the remainder of this paragraph consists of legal conclusions to which noresponse is required. Defendant denies that Plaintiff is entitled to any relief in this action.

14. This paragraph consists of a legal conclusion to which no response is required.

15. This paragraph consists of a legal conclusion to which no response is required.

16. This paragraph consists of legal conclusions to which no response is required.

17. In response to this paragraph, Defendant states that Plaintiff’s claim that “numerouscredit unions filed comments urging NCUA to allow” a particular expansion consists of Plaintiff’scharacterization of certain comments allegedly submitted during the rulemaking process.Defendant avers that any such comments speak for themselves and respectfully refers the Court tothe administrative record in this matter, a certified list of which Defendant will file with the Court.Defendant lacks knowledge and information sufficient to form a belief as to the truth of Plaintiff’sassertion that, at the time the Complaint was filed, “multiple federally-chartered credit unions[were] already planning to take prompt advantage of the Final Rule.” The sentence which begins“The Final Rule” consists of Plaintiff’s characterization of the Final Rule to which no response isrequired but, to the extent a response is required, it is denied; Defendant respectfully refers the Court to the Final Rule for a full and accurate description of its contents. The remainder of thisparagraph consists of Plaintiff’s legal conclusions to which no response is required but, to theextent a response is required, Defendant denies the remaining allegations in this paragraph.

18. This paragraph consists of Plaintiff’s legal conclusions to which no response isrequired but, to the extent a response is required, it is denied.

Defendant neither admits nor denies the two headings between paragraphs 18 and 19.

19. This paragraph consists of Plaintiff’s characterization of the FCUA. Defendantrespectfully refers the Court to the FCUA for a full and accurate description of its contents.

20. This paragraph consists of Plaintiff’s characterization of a note accompanying 12U.S.C. § 1751, 12 U.S.C. § 1768, a document on NCUA’s website, and a document on the WhiteHouse website. Defendant states that these materials speak for themselves, respectfully refers theCourt to them for a full and accurate description of their contents, and denies this paragraph to theextent it is inconsistent with these materials.

21. The last sentence of this paragraph is a legal conclusion to which no response isrequired but, to the extent a response is required, it is denied. Plaintiff’s assertion that Congresshas granted credit unions highly favorable tax treatment is a legal conclusion to which no responseis required. The remainder of this paragraph consists of Plaintiff’s characterization and quotationof a Supreme Court opinion, a Senate Report, and a note accompanying 12 U.S.C. § 1751.Defendant states that these materials speak for themselves, respectfully refers the Court to themfor a full and accurate description of their contents, and denies this paragraph to the extent it isinconsistent with these materials.

22. This paragraph consists of Plaintiff’s characterization and quotation of variousprovisions of the FCUA and a note accompanying 12 U.S.C. § 1751. Defendant states that thesematerials speak for themselves, respectfully refers the Court to them for a full and accuratedescription of their contents, and denies this paragraph to the extent it is inconsistent with thesematerials.

23. Defendant denies this paragraph to the extent it alleges that any expansion of creditunion activity since 1995 is somehow inconsistent with the sources cited in the previousparagraphs or with any other provision of law, and further denies this paragraph to the extent it alleges that credit union expansion is a direct result of taxpayer subsidies. Defendant further statesthat this paragraph and the accompanying footnote consist of allegations that are irrelevant to thisaction, and Defendant, therefore, denies that these allegations constitute a short and plain statementof the claim showing that Plaintiff is entitled to relief under Fed. R. Civ. P. 8(a)(2).

Defendant neither admits nor denies the heading between paragraphs 23 and 24.

24. This paragraph consists of Plaintiff’s characterization of this lawsuit and Plaintiff’slegal conclusion to which no response is required but, to the extent a response is required, it isdenied.

25. This paragraph consists of Plaintiff’s characterization of a statute, to which noresponse is required. Defendant respectfully refers the Court to that statute for a full and accuratedescription of its contents.

The heading between paragraphs 25 and 26 consists of a legal conclusion to which noresponse is required.

26. This paragraph consists of Plaintiff’s characterization of a Supreme Court decision.Defendant states that that decision speaks for itself, respectfully refers the Court to that decisionfor a full and accurate description of its contents, and denies this paragraph to the extent it isinconsistent with that decision.

27. This paragraph consists of Plaintiff’s characterization of the Credit UnionMembership Access Act (“CUMAA”). Defendant states that the CUMAA speaks for itself,respectfully refers the Court to the CUMAA for a full and accurate description of its contents, anddenies this paragraph to the extent it is inconsistent with CUMAA.

28. This paragraph consists of Plaintiff’s characterization and quotation of an agencydocument. Defendant states that this document speaks for itself, respectfully refers the Court that document for a full and accurate description of its contents, and denies this paragraph to theextent it is inconsistent with that document.

The heading between paragraphs 28 and 29 consists of legal argument to which no responseis required but, to the extent a response is required, NCUA denies that its actions were attempts toweaken the field of membership requirement for community credit unions. To the extent thisheading characterizes the judicial decisions discussed in the subsequent paragraphs, Defendantfurther states that those decisions speak for themselves, respectfully refers the Court to thosedecisions for a full and accurate description of their contents, and denies this heading to the extentit is inconsistent with those decisions. Defendant further states that the argument in this headingis irrelevant to this action, and Defendant, therefore, denies that this heading constitutes a shortand plain statement of the claim showing that Plaintiff is entitled to relief under Fed. R. Civ. P.8(a)(2).

Defendant states that paragraphs 29-33—which discuss two judicial decisions unrelated tothis action—are irrelevant to this lawsuit and Defendant, therefore, denies that these paragraphsconstitute a short and plain statement of the claim showing Plaintiff is entitled to relief under Fed.R. Civ. P. 8(a)(2). Defendant nonetheless responds to each paragraph below.

29. This paragraph is irrelevant to this lawsuit and Defendant, therefore, denies thatthis paragraph constitutes a short and plain statement of the claim showing that Plaintiff is entitledto relief under Fed. R. Civ. P. 8(a)(2). Defendant further states that this paragraph consists of legalconclusions to which no response is required but, to the extent a response is required, it is denied.

30. This paragraph is irrelevant to this lawsuit and Defendant, therefore, denies thatthis paragraph constitutes a short and plain statement of the claim showing that Plaintiff is entitledto relief under Fed. R. Civ. P. 8(a)(2). The second sentence of this paragraph consists of legal conclusions to which no response is required but, to the extent a response is required, it is denied.The first sentence of this paragraph consists of Plaintiff’s characterization of two judicialdecisions. Defendant states that those decisions speak for themselves, respectfully refers the Courtto those decisions for a full and accurate description of their contents, and denies this paragraph tothe extent it is inconsistent with those decisions.

31. This paragraph consists of Plaintiff’s discussion of a judicial decision. Thisparagraph is irrelevant to this lawsuit and Defendant, therefore, denies that this paragraphconstitutes a short and plain statement of the claim showing that Plaintiff is entitled to relief underFed. R. Civ. P. 8(a)(2). Defendant further states that this decision speaks for itself, respectfullyrefers the Court to that decision for a full and accurate description of its contents, and denies thisparagraph to the extent it is inconsistent with that decision.

32. This paragraph consists of Plaintiff’s discussion of a judicial decision. Thisparagraph is irrelevant to this lawsuit and Defendant, therefore, denies that this paragraphconstitutes a short and plain statement of the claim showing that Plaintiff is entitled to relief underFed. R. Civ. P. 8(a)(2). Defendant further states that this decision speaks for itself, respectfullyrefers the Court to that decision for a full and accurate description of its contents, and denies thisparagraph to the extent it is inconsistent with that decision.

33. This paragraph is irrelevant to this lawsuit and Defendant, therefore, denies thatthis paragraph constitutes a short and plain statement of the claim showing that Plaintiff is entitledto relief under Fed. R. Civ. P. 8(a)(2). The first sentence of this paragraph consists of Plaintiff’scharacterization of two judicial decisions, to which no response is required, and Defendant furtherdenies that Plaintiff’s characterization of the two referenced decisions in this sentence constitutesa full and complete account of those decisions. As to the remainder of the paragraph, Defendant states that the referenced decisions speak for themselves, respectfully refers the Court to thosedecisions for a full and accurate description of their contents, and denies this paragraph to theextent it is inconsistent with those decisions.

The heading between paragraphs 33 and 34 consists of legal conclusions to which noresponse is required but, to the extent a response is required, it is denied.

34. This paragraph consists of legal conclusions to which no response is required but,to the extent a response is required, it is denied.

35. This paragraph consists of Plaintiff’s characterization of a statutory provision, aSupreme Court decision, and an agency rule. Defendant states that these sources speak forthemselves, respectfully refers the Court to these sources for a full and accurate description of theircontents, and denies this paragraph to the extent it is inconsistent with those sources.

36. This paragraph consists of Plaintiff’s discussion of an agency document. Defendantstates that this document speaks for itself, respectfully refers the Court to this document for a fulland accurate description of its contents, and denies this paragraph to the extent it is inconsistentwith that document.

37. This paragraph consists of Plaintiff’s discussion of an agency document. Defendantstates that this document speaks for itself, respectfully refers the Court to this document for a fulland accurate description of its contents, and denies this paragraph to the extent it is inconsistentwith that document.

38. Plaintiff’s characterization of a proposed rulemaking as “significantly expand[ing]the field of membership for community credit unions” is a legal conclusion to which no responseis required but, to the extent a response is required, it is denied. To the extent this paragraphcharacterizes the proposed rule, Defendant states that this document speaks for itself, respectfully refers the Court to this document for a full and accurate description of its contents, and denies thisparagraph to the extent it is inconsistent with the proposed rule. To the extent this paragraphconsists of Plaintiff’s characterization of certain alleged comments submitted during therulemaking process, Defendant avers that any such comments speak for themselves andrespectfully refers the Court to the administrative record in this matter, a certified list of whichDefendant will file with the Court. Defendant further states that the portions of Plaintiff’scomments quoted in this paragraph are legal conclusions to which no response is required but, tothe extent a response is required, they are denied.

39. This paragraph consists of legal conclusions to which no response is required but,to the extent a response is required, it is denied.

40. This paragraph consists of legal conclusions to which no response is required but,to the extent a response is required, it is denied.

41. This paragraph consists of legal conclusions to which no response is required but,to the extent a response is required, it is denied.

42. This paragraph consists of Plaintiff’s characterization of the Final Rule, to whichno response is required but, to the extent a response is required, it is denied. Defendant respectfullyrefers the Court to the Final Rule for a full and accurate description of its contents.

43. The first sentence of this paragraph quotes NCUA’s notice of proposed rulemaking.Defendant denies that this paragraph constitutes a complete and accurate discussion of the topic atissue, and respectfully refers the court to the notice of proposed rulemaking for a full and accurate description of its contents. The second sentence of this paragraph consists of a legal conclusion towhich no response is required but, to the extent a response is required, it is denied.

44. As to the first sentence of this paragraph, Defendant admits that some CSAs havepopulations in the millions and encompass portions of multiple states. Plaintiff’s claim that manyCSAs “unite far-flung communities” is a legal conclusion to which no response is required but, tothe extent a response is required, it is denied. As to the second sentence of this paragraph,Defendant states that Plaintiff’s characterization of a CSA as including “a large portion of NorthernVirginia” is too vague for Defendant to formulate a response. Defendant otherwise admits theallegations in the second and third sentences of this paragraph, but states that, given the FinalRule’s 2.5 million person membership cap, Plaintiff’s discussion is incomplete and of limitedrelevance to this action. The final sentence of this paragraph is a legal conclusion to which noresponse is required but, to the extent a response is required, it is denied.

The map between paragraphs 44 and 45 does not set forth a claim for relief or aver facts insupport of a claim to which an answer is required.

45. As to the clause prior to the three bullets, Plaintiff’s characterization of certainCSAs as including “far more than a single, well defined local community” is a legal conclusion towhich no response is required but, to the extent a response is required, it is denied.

• Defendant admits the allegations in the first bullet accompanying this paragraphbut states that, given the Final Rule’s 2.5 million person membership cap,Plaintiff’s discussion is incomplete and of limited relevance to this action.
• Defendant admits the allegations in the second bullet accompanying thisparagraph but states that, given the Final Rule’s 2.5 million person membershipcap, Plaintiff’s discussion is incomplete and of limited relevance to this action.
• Defendant admits the allegations in the third bullet accompanying thisparagraph but states that, given the Final Rule’s 2.5 million person membershipcap, Plaintiff’s discussion is incomplete and of limited relevance to this action.

46. This paragraph consists of Plaintiff’s characterization of the Final Rule and its legalconclusions to which no response is required but, to the extent a response is required, it is denied.The footnote accompanying this paragraph consists of Plaintiff’s characterization of a proposedrule dated November 9, 2016. In response, Defendant states that this proposed rule is irrelevant tothis action but refers the Court to that proposed rule for a complete and accurate description of itscontents.

47. This paragraph consists of legal conclusions to which no response is required but,to the extent a response is required, it is denied.

48. The first and last sentences of this paragraph consist of legal conclusions to whichno response is required but, to the extent a response is required, they are denied. The secondsentence contains Plaintiff’s quotation of an agency document, to which no response is required.Defendant respectfully refers the Court to that document for a complete and accurate descriptionof its contents.

The header between paragraphs 48 and 49 consists of legal conclusions to which noresponse is required but, to the extent a response is required, it is denied.

49. As to the portion of this paragraph that quotes a notice of proposed rulemaking,NCUA states that this document speaks for itself and respectfully refers the Court to that documentfor a full and accurate description of its contents. NCUA admits the remaining allegations in thisparagraph.

50. This paragraph consists of Plaintiff’s characterization of an agency document, towhich no response is required. Defendant respectfully refers the Court to that document for acomplete and accurate description of its contents.

51. The first sentence of this paragraph is a characterization of the Final Rule; NCUAstates that the Final Rule speaks for itself and respectfully refers the Court to the Final Rule for afull and accurate description of its contents. The remainder of this paragraph consists of legalconclusions to which no response is required but, to the extent a response is required, it is denied.

52. Defendant admits that federal credit unions are not required to comply with theCommunity Reinvestment Act. Plaintiff’s characterization of the purpose of the CommunityReinvestment Act is a legal conclusion to which no response is required. The remainder of thisparagraph consists of legal conclusions to which no response is required but, to the extent aresponse is required, it is denied.

53. The first sentence of this paragraph is a characterization of the Final Rule; NCUAstates that the Final Rule speaks for itself and respectfully refers the Court to the Final Rule for afull and accurate description of its contents. The remainder of this paragraph consists of legalconclusions to which no response is required but, to the extent a response is required, it is denied.

The heading between paragraphs 53 and 54 consists of legal conclusions to which noresponse is required but, to the extent a response is required, it is denied.

54. This paragraph consists of Plaintiff’s characterization of a statute, to which noresponse is required. Defendant respectfully refers the Court to that statute for a full and accuratedescription of its contents.

55. This paragraph contains a characterization of—and quotations from—an NCUAproposed rule and an earlier final rule. Defendant states that these sources speak for themselves, denies that Plaintiff’s characterization constitutes a complete and accurate description of thesesources, and respectfully refers the Court to these sources for a complete and accurate descriptionof their contents.

56. This paragraph consists of Plaintiff’s description of the Final Rule. Defendantstates that the Final Rule speaks for itself, denies that Plaintiff’s characterization constitutes acomplete and accurate description of the Final Rule’s content, and respectfully refers the Court tothe Final Rule for a full and accurate description of its contents.

57. This paragraph consists of legal argument to which no response is required but, tothe extent a response is required, Defendant denies the allegations in this paragraph.

58. This paragraph consists of legal argument to which no response is required.

The heading between paragraphs 58 and 59 consists of legal conclusions to which noresponse is required but, to the extent a response is required, it is denied.

59. This paragraph consists of Plaintiff’s characterization of the Final Rule and anearlier 2003 rule. Defendant states that these sources speak for themselves, and respectfully refersthe Court to these sources for a full and accurate description of their contents.

60. This paragraph consists of legal conclusions to which no response is required but,to the extent a response is required, Defendant denies the allegations in this paragraph.

61. This paragraph consists of legal conclusions to which no response is required but,to the extent a response is required, Defendant denies the allegations in this paragraph.

As to the headings between paragraphs 61 and 62, Defendant admits that Plaintiff purportsto bring a claim under the APA and FCUA, but denies that Defendant acted in excess of statutoryauthority and denies that Plaintiff is entitled to any relief.

62. Defendant incorporates by reference its responses to paragraphs 1-61 as if fully setforth herein.

63. This paragraph consists of legal conclusions to which no response is required.

64. This paragraph consists of legal conclusions to which no response is required but,to the extent a response is required, Defendant denies the allegations in this paragraph.

65. This paragraph consists of legal conclusions to which no response is required but,to the extent a response is required, Defendant denies the allegations in this paragraph and deniesthat Plaintiff is entitled to any relief.

As to the headings between paragraphs 65 and 66, Defendant admits that Plaintiff purportsto bring a claim under the APA, but denies that Defendant acted in an arbitrary or capriciousfashion and denies that Plaintiff is entitled to any relief.

66. Defendant incorporates by reference its responses to paragraphs 1-65 as if fully setforth herein.

67. This paragraph consists of legal conclusions to which no response is required.

68. This paragraph consists of legal conclusions to which no response is required but,to the extent a response is required, Defendant denies the allegations in this paragraph.

69. This paragraph consists of legal conclusions to which no response is required but,to the extent a response is required, Defendant denies the allegations in this paragraph and deniesthat Plaintiff is entitled to any relief.

The Section following paragraph 69 is a Prayer for Relief, to which no response is required.To the extent a response is required, Defendant denies that Plaintiff is entitled to any relief.

Defendant hereby denies all allegations in the Complaint not expressly admitted or deniedor otherwise responded to.

WHEREFORE, having fully answered the Complaint, Defendant asserts that Plaintiff isnot entitled to the relief requested, or to any relief whatsoever, and requests that this action bedismissed in its entirety with prejudice and that Defendant be given such other relief as this Courtdeems proper, including costs and disbursements.