American Bankers Association v. National Credit Union Administration

By statute, federally-chartered community credit unions are limited to serving “[p]ersons or organizations within a well-defined local community, neighborhood, or rural district.” 12 U.S.C. § 1759(b)(3). The statute directs the National Credit Union Administration to define those terms by regulation. Id. § 1759(g)(1). The agency has defined “local community” to include any “Combined Statistical Area,” or portion of such an area, with a population of up to 2.5 million people. “Combined Statistical Areas” are large regions that often encompass dozens of cities and counties. The agency has also defined “rural district” to include vast areas with overwhelmingly urban populations of up to one million people. The D.C. Circuit upheld these definitions on the basis of Chevron deference. In doing so, the court relied on circuit precedent holding that a statutory grant of definitional authority “necessarily suggests that Congress did not intend the word to be applied in its plain meaning sense” and thus grants the agency “vast discretion” to adopt its own interpretation. The question presented is: When a statute expressly directs an agency to define a statutory term, does the delegation expand the scope of the agency’s authority at Chevron step two beyond its ordinary bounds?