purposes." Furthermore, the NCUA has issued federal regulations which provide objective criteria by which the Board can make the above decisions. 12 C.F.R. § 741.9. Therefore, as in Salinas Valley, the court finds that the plaintiff's application does not rest in the uncontrolled discretion of the Board. Rather, the Board shall reject an application only if the credit union is too grave a risk under the terms of the Act. At the same time, if an applicant can show that the Board does not have a ground to reject its application, the applicant should qualify for insurance. Consequently, the court holds that the plaintiffs do have a property interest.
Next, given that a property interest is at stake, the court must determine what procedures are due the plaintiffs. The fundamental requirement of due process is the "opportunity to be heard at a meaningful time and in a meaningful manner." Mathews v. Eldridge, 424 U.S. 319, 333, 47 L. Ed. 2d 18, 96 S. Ct. 893 (1976). The concept of due process, however, is flexible "and calls for such procedural protections as the particular situation demands." Morrissey v. Brewer, 408 U.S. 471, 481, 33 L. Ed. 2d 484, 92 S. Ct. 2593 (1972). To determine what process is due, the Supreme Court has set out a balancing test requiring consideration of three distinct factors. They are: (1) the private interest that will be affected by the official action; (2) the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and (3) the Government's interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirements would entail. Mathews, 424 U.S. at 335.
In this case, due process does not require the full panoply of procedural safeguards that plaintiffs seek in their complaint nor does it require a full evidentiary hearing. The guarantees of due process vary with the nature of the interest at stake; a loose procedure of notice and an opportunity for informal response may suffice. See, e.g., Goss v. Lopez, 419 U.S. 565, 42 L. Ed. 2d 725, 95 S. Ct. 729 (1975); Foster v. Ripley, 207 U.S. App. D.C. 217, 645 F.2d 1142 (D.C. Cir. 1981). This is one of those cases. Due process requires that the plaintiffs be provided some opportunity to object in writing to the agency's rejection of their application. This would be satisfied if the credit union, after notice, was permitted to submit objections to the NCUA, thus giving the NCUA an opportunity to explore those objections.
Importantly, the court holds that the agency has done just that and satisfied the plaintiffs' right to due process. The facts in the administrative record bear that out. On November 3, 1992, defendant Veghts, the Regional Director of the NCUA initially denied the plaintiffs' application. In response, on November 25, 1992, the plaintiffs requested reconsideration by defendant Veghts. The request was granted and plaintiffs submitted thirty-one pages of additional documentation in support of their charter application. On June 16, 1993, defendant Veghts reconsidered and again denied the application. Plaintiffs, in turn, appealed to the NCUA Board. They submitted another lengthy response to the agency's denial. Finally, on March 18, 1994, the Board issued a final denial of the plaintiffs' application.
Based on the foregoing, the court is confident that the plaintiffs received the process that is due them in accordance with the Fifth Amendment. Therefore, defendants' motion to dismiss plaintiffs' due process claim is granted.
Defendants' motion to dismiss is granted in part and denied in part. Defendants' motion to dismiss the plaintiffs' claim for judicial review is denied. Defendants' motion to dismiss plaintiffs' due process claim is granted.
Date: FEB 14 1995
JAMES H. ALESIA
United States District Judge