Drawbridge Operation Regulation; Belle River, LA

Federal Register / Vol. 85, No. 178 / Monday, September 14, 2020 / Rules and Regulations
Am. Bankers Ass’n, 934 F.3d at 656. See also
with respect to CSAs: ‘‘The NCUA possesses vast
discretion to define terms because Congress
expressly has given it such power. But the authority
is not boundless. The agency must craft a
reasonable definition consistent with the Act’s text
and purposes; that is central to the review we apply
at Chevron’s second step. Here, the NCUA’s
definition meets the standard.’’ Id. at 664.
Id. at 665–66.
Id. at 666–67.
Id. at 668.
In opposing the proposal, the ABA
stated that defining a CSA as a ‘‘single
local community’’ is unreasonable and
unlawful. The ABA largely relied on the
District Court opinion, which was
unanimously reversed by the Circuit
Court. The ABA provided examples of
CSAs that it believes might not be a
WDLC and contended that CSAs have a
‘‘daisy-chain nature’’ in which opposite
ends have little connection. It then
stated that the Circuit Court indicated
that some CSAs might not be a WDLC
and thus could be challenged on an ‘‘as
applied’’ basis. The ABA further stated
that the term ‘‘local community’’ should
not automatically include a CSA.
Rather, it stated that any presumption
that a CSA is a local community should
be rebuttable. The ABA further stated
that the Board should not adopt these
provisions while litigation remains
pending, including the possibility of an
appeal to the Supreme Court.
After reviewing the comments in light
of the unanimous Circuit Court decision
to affirm the Board’s adoption of a CSA
as a presumptive community, the Board
has determined that it is appropriate
and consistent with the Act to amend
the Chartering Manual to allow a CSA
to be re-established as a presumptive
WDLC. Much of the ABA’s argument
relied on the District Court decision that
was unanimously rejected by the three-
judge Circuit Court panel. In applying
Chevron, the Circuit Court stated: ‘‘We
appreciate the District Court’s
conclusions, made after a thoughtful
analysis of the Act. But we ultimately
disagree with many of them. In this
facial challenge, we review the rule not
as armchair bankers or geographers, but
rather as lay judges cognizant that
Congress expressly delegated certain
policy choices to the NCUA. After
considering the Act’s text, purpose, and
legislative history, we hold the agency’s
policy choices ‘entirely appropriate’ for
the most part. Chevron, 467 U.S. at
With respect to CSAs, the
Circuit Court, in rejecting the District
Court’s analysis, stated:
In addition to being consistent with the
Act’s text, the Combined Statistical Area
definition rationally advances the Act’s
underlying purposes. In the 1998
amendments, Congress made two relevant
findings about purpose. First, legislators
found ‘‘essential’’ to the credit-union system
a ‘‘meaningful affinity and bond among
members, manifested by a commonality of
routine interaction [;] shared and related
work experiences, interests, or activities [;] or
the maintenance of an otherwise well-
understood sense of cohesion or identity.’’
§ 2, 112 Stat. at 914. Second, Congress
highlighted the importance of ‘‘credit union
safety and soundness,’’ because a credit
union on firm financial footing ‘‘will enhance
the public benefit that citizens receive.’’
The Circuit Court explicitly rejected
the ABA’s assertion that CSAs have a
‘‘daisy chain’’ nature, linking multiple
metropolitan areas that have nothing to
do with those at opposite ends of the
chain. As the court stated:
[T]he NCUA’s definition does not readily
create general, widely dispersed regions. Cf.
First Nat’l Bank III, 522 U.S. at 502
(indicating that community credit unions
may not be ‘composed of members from an
unlimited number of unrelated geographical
units’. Combined Statistical Areas are
geographical units well-accepted within the
government. See [81 FR at 88414]. Because
they essentially are regional hubs, the
Combined Statistical Areas concentrate
around central locations.... The NCUA
rationally believed that such ‘real-world
interconnections would qualify as the type of
mutual bonds suggested by the term ‘local
community.’ . . . Thus, the agency
reasonably determined that Combined
Statistical Areas ‘‘simply unif[y], as a single
community,’’ already connected neighboring
regions. [See 81 FR at 88,415.]
The ABA’s misinterpretation of the
Chevron doctrine was further
repudiated by the entire Circuit Court,
which rejected the ABA’s petition for a
rehearing en banc. The Board
emphasizes that the ABA repeatedly
misstates the regulatory framework for
approving a presumptive community,
both in its court filings and in its
comment letter on the proposed rule.
Under the regulatory provisions in the
Chartering Manual, established by
notice-and-comment rulemaking, there
is no automatic approval of an
application based on a CSA. Rather, an
applicant would have to establish in its
application that it can serve the entire
community, as documented in its
business and marketing plan. A further
constraint on any such CSA or portion
thereof is that its population cannot
exceed 2.5 million people. As the
Circuit Court noted:
We might well agree with the District Court
that the approval of such a geographical area
would contravene the Act. But even so, the
Association would need much more to
mount its facial pre-enforcement challenge in
this case. As the Supreme Court repeatedly
has held, ‘‘the fact that petitioner can point
to a hypothetical case in which the rule
might lead to an arbitrary result does not
render the rule’’ facially invalid. Am. Hosp.
Ass’n v. NLRB, 499 U.S. 606, 619 (1991); see
also EPA v. EME Homer City Generation, L.P.
(EME Homer), 572 U.S. 489, 524 (2014) (‘‘The
possibility that the rule, in uncommon
particular applications, might exceed [the
agency]’s statutory authority does not
warrant judicial condemnation of the rule in
its entirety.’’); INS v. Nat’l Ctr. for
Immigrants’ Rights, Inc., 502 U.S. 183, 188
(1991) (‘‘That the regulation may be invalid
as applied in s[ome] cases . . . does not
mean that the regulation is facially invalid
because it is without statutory authority.’’);
cf. Barnhart v. Thomas, 540 U.S. 20, 29
(2003) (‘‘Virtually every legal (or other) rule
has imperfect applications in particular
Here, the Association’s complaint and
the District Court’s accompanying worry
strike us as too conjectural. The NCUA
must assess the ‘‘economic advisability
of establishing’’ the proposed credit
union before approving it, [12 U.S.C.
1754], and as part of the assessment, the
organizers must propose a ‘‘realistic’’
business plan showing how the
institution and its branches would serve
all members in the local community, see
[12 CFR. part 701, app. B, ch. 1 section
IV.D.] The Association has failed to
demonstrate the plausibility of a local
community that is defined like the
hypothetical narrow, multi-state strip
and accompanies a realistic business
plan. And if the agency were to receive
and approve such an application, a
petitioner can make an as-applied
challenge. See, e.g., EME Homer, 572
U.S. at 523–24; Buongiorno, 912 F.2d at
Thus, existing regulatory provisions
guard against the extreme examples
posited by the ABA, which claims
incorrectly that the Board must approve
them under the Chartering Manual. The
Board agrees with the ABA and the
Circuit Court that any application for a
presumptive community, including one
based on a CSA, can be challenged on
an as applied, case-by-case basis. Given
this regulatory framework, which is
subject to judicial review, the Board
agrees with the Circuit Court’s reasoning
in concluding that re-establishing the
CSA as a presumptive community is
entirely consistent with the express
authority delegated to the Board by
Congress. This provision also advances
the Act’s dual purposes of promoting
common bonds while addressing safety
and soundness considerations by
ensuring that FCUs remain
economically viable.
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