United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 5, 2001 Decided November 9, 2001

No. 00-5195

American Bankers Association,
Appellant

v.

National Credit Union Administration, et al.,
Appellees

Appeal from the United States District Court
for the District of Columbia
(No. 99cv00042)

Eric Mogilnicki argued the cause for appellant. With him
on the briefs were Christopher R. Lipsett, Jonathan M.
Mastrangelo, John J. Gill and Michael F. Crotty. Kimberly
A. Parker entered an appearance.

Michael E. Robinson, Attorney, U.S. Department of Jus-
tice, argued the cause for appellees. With him on the brief
were Kenneth L. Wainstein, U.S. Attorney, Jacob M. Lewis,


Attorney, U.S. Department of Justice, and John K. Ianno,
Counsel, National Credit Union Administration.

William J. Donovan, David M. Cherubin, Paul J. Lam-
bert, Gerard P. Finn and Robert M. Krasne were on the joint
brief for intervenors-appellees Credit Union National Associ-
ation, National Association of Federal Credit Unions, and
State Employees Federal Credit Union. Theodore W. Ruger
and Peter S. Leyton entered appearances.

Before: Randolph, Rogers and Tatel, Circuit Judges.

Opinion for the Court filed by Circuit Judge Tatel.

Tatel, Circuit Judge: The American Bankers Association
challenges a National Credit Union Administration rule gov-
erning chartering and membership standards for federal
credit unions. According to the ABA, the rule violates the
Credit Union Membership Access Act of 1998, pursuant to
which the Administration issued the rule. Except for one
claim that we dismiss as moot and another as unripe, we find
the ABA's arguments without merit and affirm the district
court's dismissal of the case.

I.

The Federal Credit Union Act (FCUA), 12 U.S.C. ss 1751-
1795k, provides for the establishment of federal credit unions
and governs their operations. A credit union is a "coopera-
tive association organized in accordance with the provisions of
[the FCUA] for the purpose of promoting thrift among its
members and creating a source of credit for provident or
productive purposes." Id. s 1752(1). The National Credit
Union Administration "may prescribe rules and regulations
for the ... administration of the [FCUA]," id. s 1766(a), and
charters, examines, and supervises federal credit unions, see
id. ss 1753, 1754, 1756.

As originally enacted, the FCUA limited credit union mem-
bership to "groups having a common-bond of occupation or
association, or to groups within a well-defined neighborhood,
community, or rural district." FCUA, Pub. L. No. 73-467,
s 9, 48 Stat. 1216, 1219 (1934) (codified at former 12 U.S.C.


s 1759 (amended 1998)). Starting in 1982, the Administra-
tion began permitting multiple occupational groups, i.e.,
groups with different common bonds, to combine into one
"multiple common-bond credit union." Interpretative Ruling
and Policy Statement (IRPS) 82-1, 47 Fed. Reg. 16,775,
16,775 (Apr. 20, 1982). In 1998, the Supreme Court, affirm-
ing a decision of this court, held that the FCUA prohibited
such credit unions. See Nat'l Credit Union Admin. v. First
Nat'l Bank & Trust Co., 522 U.S. 479, 499-501 (1998). Later
that year, however, Congress
amended the FCUA to authorize multiple common-bond
credit unions. Credit Union Membership Access Act, Pub. L.
No. 105-219, s 2, 112 Stat. 913, 914-15 (1998) (amending 12
U.S.C. s 1759(b)).

As amended, the FCUA permits three types of credit
unions, each defined by a different "membership field": sin-
gle common-bond credit unions, comprised of one group
having a common occupational or associational bond; multiple
common-bond credit unions, comprised of more than one such
group; and community credit unions. 12 U.S.C.
s 1759(b)(1)-(3). Pursuant to what the parties call a "grand-
father clause," the FCUA exempts certain previously existing
"members and groups" from the new membership field provi-
sions. Id. s 1759(c)(1). The FCUA also imposes several
limitations and conditions on multiple common-bond credit
union formation and growth, including: (1) restricting multi-
ple common-bond credit unions to groups with less than 3,000
members, id. s 1759(d)(1), unless certain exceptions apply,
including where a larger group "could not feasibly or reason-
ably" form its own credit union, id. s 1759(d)(2)(A); (2)
directing that the Administration "encourage" a group seek-
ing to join an existing credit union to form its own separately
chartered credit union instead, id. s 1759(f)(1)(A); (3) requir-
ing that in order to be added to an existing credit union a
group be within "reasonable proximity" of that credit union,
id. s 1759(f)(1)(B); and (4) requiring that where an existing
credit union seeks to include an additional group, the credit
union must satisfy certain "approval criteria" concerning its
financial soundness and administrative capabilities, and that


any harmful effect the expansion will have on any other credit
union must be "clearly outweighed in the public interest by
the probable beneficial effect of the expansion," id.
s 1759(f)(2). Finally, the 1998 Amendments added the word
"local" to the community credit union definition, thus confin-
ing such credit unions to "well-defined local communit[ies],
neighborhood[s], or rural district[s]." Id. s 1759(g)(1).

Following notice and comment, the Administration issued a
final rule implementing the 1998 Amendments. See IRPS
99-1, 63 Fed. Reg. 71,998 (Dec. 30, 1998). Several of the
rule's provisions regarding multiple common-bond credit un-
ions are at issue in this case. First, although the rule allows
the immediate family and household of a group member, as
well as "[p]ersons retired as pensioners and annuitants," to
join the group's multiple common-bond credit union, the rule
does not count these persons toward the 3000-member limit.
Id. at 72,002, 72,037. Second, in determining whether a
group with 3000 or more members "could not feasibly or
reasonably" form its own credit union, 12 U.S.C. s 1759(d)(2),
the Administration considers the group's "desire and intent,"
63 Fed. Reg. at 72,002. Third, while the rule requires groups
with 3000 or more members to "demonstrate why they cannot
satisfactorily form a separate credit union if they want to be
added to another credit union," it requires groups with fewer
than 3000 members to "demonstrate why they can successful-
ly operate a credit union" in order to be separately chartered.
Id. at 72,001. Fourth, the rule permits healthy multiple
common-bond credit unions comprised of groups with fewer
than 3000 members to merge with each other "without regard
to the statutory analysis that is required when [such groups]
... seek to join an existing credit union." Id. at 72,003.

Also at issue in this case are the rule's provisions imple-
menting the FCUA's grandfather clause, "reasonable proxim-
ity" requirement, and "well-defined local community" stan-
dard. See 63 Fed. Reg. at 71,998, 72,003, 72,015, 72,037-38.
Under the rule, the grandfather clause covers not just indi-
viduals who were members of a group at the time the FCUA
was amended, but also those who subsequently become mem-
bers of the group. Id. at 72,015. The rule provides that a


group is within "reasonable proximity" of a credit union if it is
within the "service area of a service facility of the credit
union"; a service facility includes a "credit union owned
electronic facility" other than an automated teller machine.
Id. at 72,002-03. Finally, the rule establishes criteria to
implement the statute's "well-defined local community" stan-
dard and adopts a presumption that certain areas, defined by
political jurisdiction and population, meet that standard. Id.
at 72,037-38.

Alleging that these provisions of the rule violate the FCUA,
appellant, the American Bankers Association (ABA), filed suit
in the United States District Court for the District of Colum-
bia pursuant to the Administrative Procedure Act. See 5
U.S.C. s 706. Underlying all of the ABA's claims is its belief
that the rule is too permissive with respect to credit union
formation and growth. Except for the provision regarding
pensioners, which the district court found the ABA's amended
complaint failed to challenge, the district court concluded that
each of the challenged provisions reflects a reasonable inter-
pretation of the FCUA and dismissed the amended complaint
pursuant to Federal Rule of Civil Procedure 12(b)(6).

Renewing the arguments it made in the district court, the
ABA appeals. Three organizations representing credit un-
ions intervened to defend the rule. We review the district
court's Rule 12(b)(6) dismissal de novo. See, e.g., Brown v.
Plaut, 131 F.3d 163, 167 (D.C. Cir. 1997).

II.

Before considering the merits of the ABA's claims, we must
deal with its preliminary argument that the district court
erred by failing to direct the Administration to produce the
administrative record. According to the ABA, the district
court needed the administrative record in order to consider
its "claims under the APA, challenging NCUA's rule and
certain expansions on the ground that the agency's actions
were 'arbitrary, capricious, an abuse of discretion, or other-
wise not in accordance with the law.' " Appellant's Opening
Br. at 17 (quoting amended complaint). Having reviewed the


amended complaint, however, we agree with the district court
that the ABA's argument that the challenged provisions
violate the FCUA can be resolved with nothing more than the
statute and its legislative history. See Am. Bankers Ass'n v.
Nat'l Credit Union Admin., 93 F. Supp. 2d 35, 48-49 (D.D.C.
2000); see also Sierra Club v. United States Fish & Wildlife
Serv., 245 F.3d 434, 440 n.37 (5th Cir. 2001) ("Although the
administrative record for the regulation is not before this
Court, that is of no moment. Our review is limited to
interpreting the extent to which the regulation is consistent
with the statute--a task which we are competent to perform
without the administrative record.") (citing INS v. Cardoza-
Fonseca, 480 U.S. 421, 447 (1987)). Although the ABA now
hints that it also asserted a challenge to the Administration's
rule-making process, we can find no such claim in the amend-
ed complaint. Nor, and again contrary to what the ABA
says, can we find any challenge to the manner in which the
Administration has applied the rule in specific cases that does
not depend entirely on the argument that the rule itself
violates the statute. Should the ABA have concerns about
the Administration's application of the rule to specific cases, it
remains free to bring an as-applied challenge.

Because the ABA argues that the provisions of the rule it
challenges violate the FCUA, a statute the Administration is
charged with enforcing, we proceed in accordance with Chev-
ron's familiar two-part test. See Chevron U.S.A., Inc. v.
Natural Res. Def. Council, Inc., 467 U.S. 837 (1984). Al-
though Chevron step one analysis begins with the statute's
text, we must not "confine [ourselves] to examining a particu-
lar statutory provision in isolation. The meaning--or ambi-
guity--of certain words or phrases may only become evident
when placed in context." FDA v. Brown & Williamson
Tobacco Corp., 529 U.S. 120, 132 (2000). We must also
"exhaust the traditional tools of statutory construction," Nat-
ural Res. Def. Council, Inc. v. Browner, 57 F.3d 1122, 1125
(D.C. Cir. 1995) (internal quotation marks and citation omit-
ted), including examining the statute's legislative history to
"shed new light on congressional intent, notwithstanding stat-
utory language that appears superficially clear," id. at 1127


(internal quotation marks and citation omitted). And, of
course, "we must be guided to a degree by common sense as
to the manner in which Congress is likely to delegate a policy
decision ... to an administrative agency." Brown & Wil-
liamson, 529 U.S. at 121. If, applying these principles, we
find that "Congress has directly spoken to the precise ques-
tion at issue ... that is the end of the matter; for the court,
as well as the agency, must give effect to the unambiguously
expressed intent of Congress." Chevron, 467 U.S. at 842-43.

Only if we find the statute either silent or ambiguous with
respect to "the precise question at issue" do we proceed to
Chevron's second step, asking "whether the agency's answer
is based on a permissible construction of the statute." Chev-
ron, 467 U.S. at 842-44. But not in this case. Although the
district court resolved all issues on the basis of Chevron step
two analysis, Am. Bankers, 93 F. Supp. 2d at 40, the ABA
rests its appeal entirely on Chevron step one. Throughout its
opening brief, the ABA uses only Chevron step one language:
"the District Court misapplied Chevron ... by upholding
actions that are contrary to the clearly expressed intent of
Congress," Appellant's Opening Br. at 11; "the language of
the FCUA expressly rejects NCUA's policy choice," id. at 26;
"Congress makes plain," id.; "it is clear that Congress did
not intend," id. at 28; "[the Administration] decided it could
evade the plain meaning of [the statute]," id. at 29; "[the rule
is unlawful] as a matter of simple English," id. at 35. More-
over, the brief never uses the word "unreasonable" nor any
other language suggesting a Chevron step two argument.
Even after the Administration and Intervenors responded
with Chevron step one and two defenses, the ABA confined
its reply brief to straightforward Chevron step one argu-
ments: "policy considerations cannot trump the clearly ex-
pressed intent of Congress," Appellant's Reply Br. at 7; "[the
Administration's] argument is contrary to the plain lan-
guage," id. at 9; "Congress did express an intent," id. at 12;
"there is no basis to believe that Congress's concern did not
apply," id. at 14. Accordingly, we will evaluate the ABA's
claims under Chevron step one standards alone.


We begin with the ABA's challenge to the Administration's
method for calculating the size of a common-bond group.
Under the statute, the "membership field" of a multiple
common-bond credit union is limited to groups comprised of
persons sharing a common bond, 12 U.S.C. s 1759(b)(2), and
"only a group with fewer than 3,000 members shall be eligible
to be included in the field of membership category of a
[multiple common-bond] credit union...." 12 U.S.C.
s 1759(d)(1). Under the rule, the Administration counts only
"primary potential members," 63 Fed. Reg. at 72,000, 72,002,
i.e., persons sharing the occupational or associational bond
that defines the group, toward the 3000-member limit. Al-
though "by virtue of their close relationship to a common-
bond group," certain other persons "may be included ... in
the field of membership" of a common-bond credit union--
that is, they may join the credit union--such persons are not
counted toward the 3000-member limit. Id. at 72,037. These
persons include immediate family and household members of
primary potential members, as well as pensioners and annui-
tants. Id. We consider each category in turn.

Family Members

Calling the rule's failure to count family members toward
the 3000-member limit a "serious misreading of the Act,"
Appellant's Opening Br. at 21, the ABA argues that individu-
als are eligible to join a common-bond credit union only if
they share the common bond. Therefore, the ABA claims, if
family members are eligible for common-bond credit union
membership, then they are necessarily group members and
must be counted. The ABA also points out that subsection
1759(c) contains two "[e]xceptions" to subsection (b), the
"membership field" provision--one for "grandfathered mem-
bers and groups" and another for "underserved areas"--
neither of which pertains to family and household members.
12 U.S.C. s 1759(c).

The ABA focuses too narrowly. Subsection 1759(b) ex-
pressly states that it is "subject to the other provisions of
[Section 1759]," 12 U.S.C. s 1759(b), and section 1759 con-


tains a provision relating to family and household members:
the "Additional membership eligibility provisions," 12 U.S.C.
s 1759(e). This subsection states:

No individual shall be eligible for membership in a credit
union on the basis of the relationship of the individual to
another person who is eligible for membership in the
credit union, unless the individual is a member of the
immediate family or household ... of the other person.

12 U.S.C. s 1759(e)(1). Though phrased as a limitation,
subsection 1759(e) links credit union membership eligibility
for family and household members to the personal relation-
ship between such persons and group members (or other
persons eligible for credit union membership), rather than to
group membership. Moreover, the fact that this provision
speaks of individuals' eligibility for credit union membership,
while the 3000-member limit provision, 12 U.S.C.
s 1759(d)(1), speaks of "group ... eligibil[ity] to be included
in ... a [multiple common-bond] credit union," indicates that
credit union members and group members do not entirely
overlap. Under these circumstances, we have no basis for
concluding that the FCUA unambiguously requires the Ad-
ministration to count family and household members toward
the 3000-member limit.

The ABA insists that "the history of the statute" supports
its view that section 1759(e)(1) provides no basis for family
and household credit union membership eligibility other than
sharing the common bond. Appellant's Opening Br. at 21.
Specifically, it argues that prior to the 1998 Amendments, the
Administration treated family and household members as
part of the common-bond group, and that in the district court
the Administration conceded that Congress "merely 'endorsed
the agency's longstanding policy' " regarding these persons.
Appellant's Opening Br. at 21-22 (quoting Admin. Mem. In
Supp. Motion to Dismiss at 51 (internal quotation marks and
citation omitted)). Although the ABA cites some evidence
that supports this characterization of the Administration's
prior policy, see 44 Fed. Reg. 43,737, 43,739 (July 26, 1979)
(proposed rule characterizing family members as "additional


persons [who] ... share a common bond with the basic
group") (cited in Appellant's Opening Br. at 21-22), other
evidence indicates that the matter is not so clear. For
example, a 1994 Final Interpretive Ruling and Policy State-
ment describes family members as "secondary or derivative"
members included in the field of membership "by virtue of
their close relationship to a common bond group." 59 Fed.
Reg. 29,066, 29, 093 (June 3, 1994) (cited in Intervenors' Br.
at 13 n.6). Such conflicting evidence cannot clarify ambigu-
ous statutory language. See Ayuda, Inc. v. Thornburgh, 880
F.2d 1325, 1345 (D.C. Cir. 1989) ("[E]ither the plain language
of the statute must be clear, or the legislative history and
design of the act must illustrate a specific intent despite
arguably ambiguous statutory language.") (citations omitted),
vacated on other grounds, 498 U.S. 1117 (1991).

Pensioners

Unlike the FCUA's express provision for family and house-
hold members, the statute never mentions pensioners or
annuitants. According to the ABA, this silence means that its
argument that anyone eligible for multiple common-bond
credit union membership must be counted toward the 3000-
member limit applies even more forcefully in the case of
pensioners. The district court concluded that the ABA had
failed to raise this claim because the amended complaint
mentions only family and household members in the relevant
count. Am. Bankers, 93 F. Supp. 2d at 41 n.3. We agree.

In its original complaint, the ABA made only one allegation
with respect to the Administration's method for calculating
common-bond group size: that the rule unlawfully fails to
count family and household members. See Complaint p p 40-
42. The complaint never mentioned pensioners. In its
amended complaint, the ABA continues to focus on family
members, although pensioners are mentioned. The amended
complaint describes how the rule permits certain persons
whom the Administration does not count as group members--
"persons in the immediate families or households of the credit
unions [sic] members; pensioners and annuitants of a quali-


fied business; spouses of persons who died when in the credit
union's field of membership; and employees of the credit
union"--to be eligible for credit union membership, Amended
Complaint p 24, and alleges that "if the persons listed in [this]
section of the rule ... do not share the common bond, then
they cannot be eligible for membership in a common-bond
credit union," id. p 28. The amended complaint further alleg-
es that the Administration's approval of a certain credit
union's application to add an occupational common-bond
group violated the statute because the Administration failed
to count "members of the employees' immediate families,
persons [who] retired as pensioners or annuitants ... and
[s]pouses of persons who died" as group members. Id. p 27
(internal quotation marks omitted). Like the original com-
plaint, however, the amended complaint challenges only the
failure to count family and household members. For exam-
ple, immediately after describing the rule's failure to count
pensioners and annuitants, among others, the amended com-
plaint alleges that the rule is unlawful because it "excludes
family members" and "counts only ... primary members."
Id. p p 25, 26 (internal quotation marks omitted). Likewise,
Count One objects to the rule's failure to count "certain
members of the common bond, including family and house-
hold members," id. p 69; neither Count One nor any of the
other sixteen counts mentions pensioners. Under these cir-
cumstances, we doubt the Administration could have known
that the ABA intended to challenge the rule's application to
pensioners and annuitants. See Fed. R. Civ. P. 8(a)(2);
Conley v. Gibson, 355 U.S. 41, 47 (1957) (setting forth notice
pleading rule).

III.

The FCUA's grandfather clause provides: "(i) any person
or organization that is a member of any Federal credit union
as of August 7, 1998 may remain a member of the credit
union after August 7, 1998"; and "(ii) a member of any group
whose members constituted a portion of the membership of
any Federal credit union as of August 7, 1998 shall continue
to be eligible to become a member of that credit union, by


virtue of membership in that group after August 7, 1998." 12
U.S.C. s 1759(c)(1)(A)(i) and (ii). The Administration inter-
prets the grandfather clause to permit persons who are
members of a group that was part of a credit union as of
August 7, 1998, the date the 1998 Amendments were enacted,
to join the credit union even if they didn't become group
members until after that date. See 63 Fed. Reg. at 72,015
(grandfather provision applies to "a member, or subsequent
new member, of any group, whose membership constituted a
portion of the membership of any federal credit union at the
date of enactment"). Disagreeing, the ABA argues that the
clause's plain language permits only persons who were group
members as of August 7, 1998, to join because only they could
"continue to be eligible" to become credit union members. 12
U.S.C. s 1759(c)(1)(A)(ii).

The ABA's interpretation is certainly plausible. But when
we read the grandfather clause in its entirety, as we must, see
Brown and Williamson, 529 U.S. at 120 (noting that statuto-
ry words and phrases should be read in context), its meaning
is not so clear. The grandfather clause's first part--referring
to "a member of any group whose members constituted a
portion of the membership of any Federal credit union as of
August 7, 1998," 12 U.S.C. s 1759(c)(1)(A)(ii)--suggests, as
the Administration argues, that its scope turns not on wheth-
er the individual was a group member as of August 7, 1998,
but on whether the group was part of a credit union as of that
date. Indeed, if individuals needed to be group members on
the date the FCUA was amended, the phrase "as of August 7,
1998" would follow the words "a member of any group."

According to the ABA, the Administration's interpretation
of the grandfather clause "has the effect of reading the word
'continue' out of the statute." Appellant's Reply Br. at 16.
We disagree. The Administration plausibly interprets this
word to refer to any member of a group that was part of a
credit union as of August 7, 1998. To use the statute's
language, if a group's "members constituted a portion of the
membership of any federal credit union as of August 7, 1998,"
12 U.S.C. s 1759(c)(1)(A)(ii), then the group's members,


whether they became members before or after August 7,
1998, shall "continue" to be eligible for credit union member-
ship.

Faced with two plausible interpretations of the grandfather
clause, we may examine its legislative history, see Browner,
57 F.3d at 1126-29 (considering legislative history at Chevron
step one), and that history definitively resolves the debate
over the grandfather clause's meaning in the Administration's
favor. The House Report explains that the "broad grandfa-
ther" clause "covers all persons or organizations or successors
who were members of a federal credit union on the date of
enactment of this Act, as well as anyone who is or becomes a
member of a group representing a portion of the credit
union's membership," H.R. Rep. No. 105-472, at 19 (1998),
and "[the provision] grandfathers all current members as well
as current groups contained within the membership of a
credit union as of the date of enactment of this legislation.
The grandfather [provision] will permit such groups to contin-
ue accepting new members," id. at 11. The Senate Report
makes the same point, stating that the clause includes "all
current members as well as current groups.... The grand-
father provision also permits such groups to continue adding
new members." S. Rep. No. 105-193, at 3-4 (1998). As the
district court put it, this legislative history is "pellucid" on the
issue. Am. Bankers Ass'n v. Nat'l Credit Union Admin., 38
F. Supp. 2d 114, 134 (D.D.C. 1999).

IV.

The ABA's next challenge focuses on the FCUA's require-
ment that in order for a group to be added to a credit union,
the group must be within "reasonable proximity" of that
credit union. 12 U.S.C. s 1759(f)(1)(B). The rule defines
"reasonable proximity" as "within the service area of a service
facility of the credit union." 63 Fed. Reg. at 72,002. Al-
though the rule defines a "service facility" as "a credit union
owned electronic facility" at which the credit union member is
"able to deposit funds, apply for a loan, and obtain funds on
approved loans," the rule "excludes ... ATMs." Id. at
72,003. Claiming that an "electronic facility" is similar to an


ATM, and that the legislative history of the 1998 Amend-
ments shows that "Congress did not intend for devices similar
to ATMs to be considered 'service facilities,' " Appellant's
Opening Br. at 37, the ABA argues that the Administration's
definition violates the statute. Defending its rule, the Admin-
istration argues that the legislative history deals with the
term "facility" in the context of a different statutory provi-
sion, that Chevron step two applies because the FCUA no-
where defines "reasonable proximity," and that the agency's
interpretation is reasonable.

Although the parties obviously feel strongly about this
issue--they devoted nine pages of briefing to it--not one has
identified an "electronic facility" that is not also an ATM.
The rule doesn't define "electronic facility"; the briefs never
define it; and when asked at oral argument, neither counsel
could define it, much less tell us whether non-ATM electronic
facilities even exist. Under these circumstances, this issue is
plainly unripe for judicial review. See Abbott Labs. v. Gard-
ner, 387 U.S. 136, 148-49 (1967) (ripeness requires that issue
be fit for judicial decision); Louisiana Envtl. Action Network
v. United States Envtl. Prot. Agency, 172 F.3d 65, 69 (D.C.
Cir. 1999) (issue not fit for judicial decision where its "[c]on-
sideration ... would benefit from a more concrete setting").

V.

The ABA raises several other challenges to the rule's
provisions governing multiple common-bond credit unions.
None has merit.

First, the ABA argues that the Administration's criteria for
determining when a group with 3000 or more members "could
not feasibly or reasonably establish a new single common-
bond credit union," 12 U.S.C. s 1759(d)(2)(A), and may there-
fore join an existing credit union, violate the FCUA because
the Administration considers the group's "desire and intent"
to be "[i]mportant" and "key" in this analysis, 63 Fed. Reg. at
72,002, 72,010. According to the ABA, the statutory phrase
"feasibly or reasonably" requires the Administration to deter-
mine independently whether the group could operate its own


credit union, but the rule "essentially ... allows the group
itself to decide whether it will be allowed to join an existing
credit union." Appellant's Opening Br. at 25. The rule
specifies, however, that "the intent of the group ... [is] not
the sole factor[ ]. The final decision must be based on an
independent regulatory analysis in consideration of the re-
maining factors in the regulation." 63 Fed. Reg. at 72,002
(emphasis added). Those remaining factors include "the vol-
unteers and resources to support the efficient and effective
operations of the credit union, whether the group meets the
economic advisability criteria and the demographics of the
group." Id. at 72,010.

Second, the ABA challenges the portion of the rule that
permits voluntary mergers between healthy multiple com-
mon-bond credit unions comprised of groups with fewer than
3000 members "without regard to the statutory requirements
for non-affiliated groups of [this size] ... seeking to join an
existing credit union." 63 Fed. Reg. at 72,003. These re-
quirements, which apply to multiple common-bond credit
union "expansions," include a provision directing the Adminis-
tration to "encourage the formation of separately chartered
credit unions," the "reasonable proximity" requirement, and
the "approval criteria" for credit unions seeking to include
new groups. 12 U.S.C. s 1759(f). The ABA argues that
these requirements "apply on their face whenever a credit
union seeks to expand its field of membership by adding new
groups--including when it does so through merger." Appel-
lant's Opening Br. at 30. This argument suffers from an
obvious defect: Several of the requirements set forth in the
"expansions" subsection make no sense in the case of merg-
ers. For example, how can the Administration "encourage
the formation of separate credit unions," since mergers, by
definition, bring together already-formed credit unions? Or
why would Congress have written the "approval criteria" in
the singular--"the credit union has not engaged in any unsafe
or unsound practice," "is adequately capitalized," and "has the
administrative capability ... and the financial resources ...
to serve the new membership group," 12 U.S.C.
s 1759(f)(2)--if it had intended them to apply to mergers of


two credit unions? Contrary to the ABA's argument, there-
fore, subsection 1759(f) does not unambiguously apply to
mergers.

Third, the ABA challenges the requirement that groups
with fewer than 3000 members "demonstrate why they can
successfully operate a credit union" in order to obtain a
separate charter. 63 Fed. Reg. at 72,001. According to the
ABA, this provision violates the FCUA's requirement that the
Administration "encourage the formation of separately char-
tered credit unions." 12 U.S.C. s 1759(f)(1)(A). Yet the
statute only requires the Administration to encourage groups
to form their own credit unions "whenever practicable and
consistent with reasonable standards for the safe and sound
operation of the credit union." Id. Requiring that smaller
groups show they can operate their own credit unions safely
is entirely consistent with this requirement.

VI.

We turn finally to the ABA's challenges to the Administra-
tion's approach to the chartering of community credit unions.
Pointing out that Congress added the word "local" to the
"well-defined community, neighborhood, or rural district"
community credit union definition, the ABA argues that al-
though Congress intended the Administration to take a more
restricted approach to community credit union charters, the
new rule is either the same as, or in some instances, less
restrictive than, the prior rule. In support of this proposi-
tion, the ABA cites two provisions of the rule: the criteria for
determining whether a community qualifies for a charter,
see 63 Fed. Reg. at 72,038, and the new 34presumptive community34
standard applicable to a recognized political jurisdiction with no more than
300,000 residents, or multiple contiguous political jurisdictions with no more
than 200,000 residents, see 63 Fed. Reg. at 72,013, 72,037-38. The ABA
contends that the community credit union criteria are substantially unchanged.
Compare 63 Fed. Reg. at 72,038 (new rule listing political jurisdictions,
major trade areas, shared/common facilities, organiza-
tions/clubs, newspapers/other periodicals, maps designating
community to be served, common characteristics and back-
ground of residents, and other documentation demonstrating
common interests or interaction) with 59 Fed. Reg. at 29,077
(former rule listing political jurisdictions, major trade areas,
shared/common facilities, organizations/clubs, newspa-

pers/other periodicals, census tracts, common
characteristics and background of residents, history of area, and other evidence of what
distinguishes chosen area and its residents).
The ABA also points out that an area benefitting from the
"presumptive community" standard is sub-
ject to less demanding documentation requirements than
ordinarily apply to an area seeking a credit union charter.
See 63 Fed. Reg. at 72,013, 72,037-38.

Keeping in mind that the ABA limits this appeal to Chev-
ron step one, we have little difficulty rejecting these arguments.
To begin with, the Administration acknowledges in the rule
itself that the addition of the word "local" reflects congres-
sional intent that it take "a more circumspect and restricted
approach to chartering community credit unions." 63 Fed.
Reg. at 72,012. Moreover, although the Administration left
the community credit union criteria substantially unchanged,
it has made clear that it intends to apply them more strin-
gently. Specifically, where a community tests the limits of
the statutory standard, the Administration will require it "to
demonstrate more definitively how it meets the local require-
ment." Id. at 72,012; see also id. at 72,037-38 (more docu-
mentation required for larger or more densely populated
areas). And although the Administration adopted a new
presumption, the rule not only requires documentation "de-
scribing how the area meets the standards for community
interaction or common interests," but also makes clear that
the Administration reserves the right to request additional
evidence of community interaction or common interests when
the community's initial submission falls short. See id. at
72,038. At least on its face, therefore, the rule adopts a more
circumspect method for applying the community credit union
criteria.

The ABA also argues that because the rule provides that
the Administration will consider an area's "primary ethnic
composition" in determining whether it qualifies as a "well-
defined local community," 63 Fed. Reg. at 72,038, the rule
violates the Fifth Amendment, the FCUA, and the Equal


Credit Opportunity Act, 15 U.S.C. s 1691(a)(3). The district
court dismissed this claim, concluding that the ABA, having
failed to allege injury to itself, lacked Article III standing. In
the alternative, the court held that the consideration of eth-
nicity in the chartering process violates none of the cited
statutory or constitutional provisions. See Am. Bankers, 93
F. Supp. 2d at 48. The Administration argues that this issue
has now become moot because it deleted the ethnicity provi-
sion from the rule during the pendency of this appeal. Com-
pare 63 Fed. Reg. at 72,038 (final rule) with 66 Fed. Reg.
15,619, 15,620 (March 20, 2001) (amending final rule). Al-
though the ABA insists that we should nonetheless "declare
[the] policy unlawful to prevent the [Administration] from
returning to it," Appellant's Reply Br. at 21, we think the
Administration has met its burden to show mootness: It has
eliminated the allegedly unlawful provision and "there is no
indication [it] will revert to its past [policy]." Arizona Pub.
Serv. Co. v. EPA, 211 F.3d 1280, 1295-96 (D.C. Cir. 2000)
(holding that challenge to EPA rule was moot where agency
issued clarification modifying challenged provision); see Nat'l
Mining Ass'n v. United States Dep't of Interior, 251 F.3d
1007, 1011 (D.C. Cir. 2001) (holding that challenge to National
Mining Association regulations was moot where agency
adopted new regulations eliminating challenged provisions);
Motor & Equip. Mfrs. Ass'n v. Nichols, 142 F.3d 449, 458-59
(D.C. Cir. 1998) (holding that EPA met " 'heavy' burden" to
show that challenge to EPA waiver for state regulatory
program was moot to extent state had eliminated allegedly
unlawful regulations) (quoting County of Los Angeles v.
Davis, 440 U.S. 625, 631 (1979)).

VII.

The ABA's challenge to the "reasonable proximity" require-
ment is dismissed as unripe. Its challenge to the ethnicity
provision is dismissed as moot. In all other respects, the
decision of the district court is affirmed.

So ordered.