WASHINGTON—Saying the lawsuit is “baseless” and part of a “campaign of misinformation,” NAFCU and CUNA responded to the Independent Community Bankers of America’s suit against NCUA that challenges the agency’s commercial lending rule.
In the lawsuit the ICBA alleges NCUA is attempting to “unilaterally expand loopholes for tax-exempt credit unions by sidestepping Congress and putting consumers at risk.
“This unlawful rule from the NCUA is the latest example of the agency stretching the law beyond its breaking point to serve as the tax-exempt credit union industry’s regulatory rubber stamp,” said ICBA President and CEO Camden R. Fine.
Coverage of the lawsuit’s contents can be found here
NAFCU President and CEO Dan Berger said the lawsuit “raises to a new level the banking trade’s campaign of misinformation and attempted intimidation in its effort to hinder credit unions’ ability to serve their member small businesses. NCUA’s revised member business loan rule is a well-considered approach to making it possible for more credit unions to serve their members’ needs by eliminating red tape and remaining within the letter and the spirit of the law. During the crisis, the banks weren’t complaining about MBL, they were avoiding new business loans altogether. Credit unions, by contrast, stepped up.”
Berger added that if banks had “put this much effort and money in policing themselves, maybe they could have helped prevent the financial crisis they caused that harmed consumers and our country's economy. NAFCU will continue to vigorously defend credit unions’ ability to provide member business loans.”
NAFCU noted that a 2011 study commissioned by SBA’s Office of Advocacy found that during the 2007-2010 financial crisis, while banks’ small business lending decreased, credit union business lending increased as a percentage of assets.
For its part, meanwhile, CUNA said it has activated the CUNA/league system to “reject” the ICBA allegations.
“This baseless attack on the NCUA’s rule ignores the law and the NCUA’s authority in crafting regulations for credit unions,” said CUNA President/CEO Jim Nussle. “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 said it is reviewing the complaint and will take whatever actions necessary to protect credit unions’ interest.
“Our initial review of the complaint indicates the suit is baseless. The NCUA’s member business lending rule is consistent with the law, which provides significant constraints on credit union member business lending. 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,” CUNA stated.