National Credit Union Administration v. First National Bank & Trust Company

PETITIONER: National Credit Union Administration
RESPONDENT: First National Bank & Trust Company
LOCATION: National Endowment for the Arts

DOCKET NO.: 96-843
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the District of Columbia Circuit

CITATION: 522 US 479 (1998)
ARGUED: Oct 06, 1997
DECIDED: Feb 25, 1998

John G. Roberts, Jr. - for petitioners in case No. 96-847
Michael S. Helfer - on behalf of the Respondents
Seth P. Waxman - on behalf of the Federal Petitioner

Facts of the case

Section 109 of the Federal Credit Union Act provides that that "federal credit union membership shall be limited to groups having a common bond of occupation or association, or to groups within a well-defined neighborhood, community, or rural district." The National Credit Union Administration (NCUA) interprets section 9 to permit federal credit unions to be composed of multiple, unrelated employer groups, each having its own distinct common bond of occupation. Under this interpretation, the NCUA approved a series of charter amendments adding several unrelated employer groups to the membership of AT&T Family Federal Credit Union, which now has approximately 110,000 members nationwide only 35% of whom are employees of AT&T and its affiliates. Subsequently, a number of private actors brought suit under the Administrative Procedure Act, asserting that the NCUA's decision was contrary to law because section 109 unambiguously requires that the same common bond of occupation unite each member of an occupationally defined federal credit union and members of the new groups did not share a common bond of occupation with AT&T Family Federal Credit Union's existing members. Ultimately, the District Court held that the private interests lack standing to challenge NCUA's decision and the Court of Appeals reversed.


Do banks and professional associations have standing under the Administrative Procedure Act to seek federal-court review of the National Credit Union Administration's decisions? Is the NCUA's interpretation of section 109 of the Federal Credit Union Act permissible?

Media for National Credit Union Administration v. First National Bank & Trust Company

Audio Transcription for Oral Argument - October 06, 1997 in National Credit Union Administration v. First National Bank & Trust Company

William H. Rehnquist:

We'll hear argument now in No. 86-843, National Credit Union Administration [= v.] the First National Bank and Trust Company, and a related case.

General Waxman.

Seth P. Waxman:

Mr. Chief Justice, and may it please the Court:

Congress enacted the Federal Credit Union Act to foster the development of strong and stable, cooperative credit institutions so that persons not being served by banks could obtain credit at non-usurious rates.

Credit union proponents advocated including the common bond provision because experience had shown that credit unions organized around preexisting, cohesive groups were most likely to form economically strong cooperative institutions.

The banks lack standing under the APA to challenge the NCUA's interpretation of the common bond provision because Congress enacted that provision as an organizing principle to promote financially viable credit unions and not to impose substantive restrictions or constraints on competition.

Thus, the banks' competitive interests are not within the, quote, zone of interests Congress sought to protect.

William H. Rehnquist:

Well, how do you reconcile that petition... position, Mr. Waxman, with our decision in the Clarke case?

Seth P. Waxman:

Well, Justice Rehnquist, in Clarke, this Court determined that the plaintiffs, the security industry, had standing because it found that Section... Sections 36 and 81 of the McFadden Act, which were the substantive provisions at issue there, had been enacted to reflect a, quote, congressional concern to keep national banks from obtaining monopoly power over credit and money through unlimited branching.

And, therefore, Congress... the Court found, Congress had arguably legislated against the very competition that the securities interest was seeking to challenge.

In this case, the common bond provision, in particular, and even the Federal Credit Union Act in general, was not enacted with any thought to restrict or control competition in any way.

It was enacted in order to provide a means for strengthening the development of credit institutions.

Sandra Day O'Connor:

Well, Mr. Waxman, the... the Investment Company Institute v. Camp case was enacted, of course, to restrict competition.

And we found standing there, didn't we?

Seth P. Waxman:

You did, Justice O'Connor.

And I think it's fair to acknowledge that that case, at least in our view, represents the outer limits of where this Court has gone in zone of interest.

Sandra Day O'Connor:

Yeah, I think that's the... the closest case for the standing argument.

I mean, how do you get around that?

Seth P. Waxman:

I... I... I... I think... I think it is... and I think it's important and can be readily distinguished in three ways.

First of all, although the Court acknowledged that the principle reason for enacting Section 16 of the Glass-Steagall Act had been to protect banks from engaging in investment activities of their own sake, the Court, both in the opinion in Investment Company Institute, and subsequently in Clarke, also noted that Congress had been concerned with, quote, the danger to the economy as a whole.

So it wasn't the only reason.

But, more importantly, the basis for the holding in Investment Company Institute was that Section 16 of the Glass-Steagall Act was legislation against competition.

The Court found in that case that Congress had legislated against the competition that the petitioners sought to challenge.

So even if you construe that case in the broadest possible way... and I would simply adopt Justice Harlan's characterization of the majority opinion in that case in dissent... he said, if Congress prohibited entry into a field of business for reasons relating to competition, then a competitor has standing to seek observance of the prohibition.

Now, he thought that that was a holding that was not warranted by the Court's prior precedence.

But even if that is what Investment Company Institute v. Camp stands for, that's not this case.

The common bond provision, and, indeed, the FCUA in general, have nothing to do with competition.

They were not... there was not a reason for enacting the common bond--

William H. Rehnquist:

But in order to find out the answer to that question, what was the reason for enacting the common bond, must we go back into the legislative history?

Seth P. Waxman:

--I think you do, because prudential... the prudential standing inquiry this Court has taught is an analysis of what Congress intended; that is, the interest... to quote Association of Data Processors... the interest sought to be protected by the complainant must be arguably within the zone of interest to be protected by the statute.