CUNA, NWCUA Back NCUA MBL Rule in Wake of ICBA Lawsuit
September 8, 2016
September 8, 2016
With reporting from CUNA News Now.
This story has been updated.
The lawsuit filed against the National Credit Union Administration (NCUA) by the Independent Community Bankers of America (ICBA) Wednesday is without merit, CUNA President and CEO Jim Nussle said. The ICBA filed its suit in response to the NCUA’s revised member business lending (MBL) rule that was finalized in February.
“This baseless attack on the NCUA’s rule ignores the law and the NCUA’s authority in crafting regulations for credit unions,” Nussle said. “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.”
The lawsuit, ICBA v. NCUA, was filed in the U.S. District Court of the Eastern District of Virginia.
CUNA is reviewing the complaint and will take whatever actions necessary to protect credit unions’ interests. Its initial review of the complaint indicates the suit is baseless.
“Banks are trying to hold the market captive, harming small businesses operating on Main Street who turned to credit unions when banks failed, added NWCUA AVP of Regulatory Affairs John Trull. “The lawsuit is an attempt to limit consumer choice and competition, but the law is not on their side.”
The MBL rule is consistent with the law, which provides significant constraints on credit union member business lending, CUNA believes. CUNA also believes the NCUA acted appropriately and followed all procedures when issuing the MBL rule and that the rule falls well within its statutory authority to interpret the application of the MBL cap.
CUNA supports the NCUA’s rule, which strips all restrictions from the MBL rule that are not specifically laid out in the Federal Credit Union Act. CUNA worked closely with the agency to ensure its waiver of the personal guarantee requirement, which became effective in May.
The rest of the rule is effective Jan. 1, 2017, and the agency said nothing has changed on that front.
Per NCUA, it is reviewing the complaint and will respond in court.
CUNA Board Passes Resolution in Support
CUNA’s board of directors passed a resolution Tuesday stating CUNA’s commitment to protecting credit union interests by rejecting the lawsuit brought last week by the Independent Community Bankers of America (ICBA) against the NCUA and its member business lending (MBL) rule. The rule is effective Jan. 1, 2017.
“CUNA’s board and I will take whatever actions necessary to protect credit unions’ interests,” said Jim Nussle, president/CEO of CUNA. “We believe that the MBL rule is consistent with the law, which provides significant constraints on credit union member business lending. The NCUA acted appropriately and followed all procedures when issuing the MBL rule. The rule falls well within its statutory authority to interpret the application of the MBL cap.”
Click here for more from CUNA News Now.
Questions about this story? Contact Eric Horvath: 503.350.2222, firstname.lastname@example.org.