The American Bankers Association said it filed a lawsuit on Wednesday against the National Credit Union Administration (NCUA), seeking to overturn a recently passed rule to ease restrictions on who may join credit unions.
The NCUA said in October that the rule would allow more consumers access to credit unions, which are member-owned lenders that typically form around a common employer, hometown or other shared class.
Regulators approved easing geographic limits on credit union membership and allowing more contractors to join employer-affiliated lenders, among other reforms.
Bank trade group ABA said the rule would "unlawfully expand fields of membership for credit unions," disregarding Congress' instruction that community credit unions serve only a single, well-defined local community. (bit.ly/2gCSxEm)
"NCUA's rule ignores statutory requirements at the expense of taxpayers, small banks and the communities those banks serve," ABA Chief Executive Rob Nichols said.
The lawsuit was filed in the United States District Court for the District of Columbia, the ABA said.
(Reporting by Richa Naidu in Bengaluru; Editing by Martina D'Couto)