WASHINGTON–The Independent Community Bankers Association of America (ICBA) has decided not to file an appeal of a court decision dismissing its lawsuit against NCUA over its new member business lending rule.
In a joint statement released by CUNA CEO Jim Nussle and NAFCU CEO Dan Berger, the two trade associations said, “The court vindicated NCUA’s rulemaking by dismissing the ICBA’s lawsuit. The ICBA not appealing the motion to dismiss further proves that this was a meritless and frivolous lawsuit from the beginning. Credit unions are always working in the best interests of their members and will continue to make member business loans to boost Main Street’s economy.”
As CUToday.info reported here, in its ruling, the court wrote, “The Court begins its analysis with Plaintiff’s Complaint. Curiously, the Complaint makes little mention of the regulatory changes wrought by the 2016 Rule. Indeed, Plaintiff dedicates only seven of the Complaint’s 90 paragraphs to the Rule Plaintiff ostensibly challenges. Instead, Plaintiff’s Complaint is almost entirely addressed to Defendant’s 2003 Rule. The relief Plaintiff requests is directed solely at overturning changes in Defendant’s regulations traceable to the 2003 Rule, to wit, the agency’s determination that ‘purchases of nonmember loans and participation interests . . . do not involve the provision of member loan services, and the acquired loan assets are not [member business loans]…’ This is significant because a six-year statute of limitations applies to lawsuits brought under the APA.”
Judge James Cacheris noted the bankers sought to challenge the 2003 rule under the “reopening doctrine,” but said it could find no “Supreme Court or Fourth Circuit precedent recognizing the reopening doctrine.”
The court also said it found the bankers’ argument that NCUA had reopened the issue based on its call for comment to be a “thin reed.”
The ICBA has until March 27 to appeal.