The Independent Community Bankers of America filed suit in federal court yesterday, challenging the NCUA’s new MBL rules, contending that the regulations allow credit unions to exceed limitations on business loans that were established by Congress.
In the suit, the ICBA asks that the rules be voided and states that the agency is reducing regulatory oversight, while creating risks for consumers. The ICBA argues that the new rules allow credit unions to exceed lending limitations placed on them by Congress and gives an advantage over community banks, since credit unions are tax exempt.
“This baseless attack on the NCUA’s rule ignores the law and the NCUA’s authority in crafting regulations for credit unions,” CUNA president/CEO Jim Nussle stated in response to the suit. ““This lawsuit lacks merit, and is merely a self-serving publicity stunt to distract community bankers from the real issues that should be concerning them, namely the encroachment by large banks into the business of small banks and their resulting loss of market share.”
CUNA reports that it is reviewing the complaint and will take whatever actions necessary to protect credit unions’ interest. CUNA believes the NCUA acted appropriately and followed all procedures when issuing the rule. Further, the rule falls well within its statutory authority to interpret the application of the member business lending cap. Read more at CUTimes.