WASHINGTON—A federal judge said he will rule after the turn of the year on a motion by NCUA to dismiss a lawsuit filed by the Independent Community Bankers Association over the agency’s proposed changes to its member business lending rules.
Judge James C. Cacheris of the U.S. District Court for the Eastern Division of Virginia issued the ruling.
“ICBA vigorously defended its case against the NCUA at (the) hearing and looks forward to a decision…on the NCUA’s motion to dismiss the case,” said ICBA President Camden R. Fine. “Our case against the NCUA’s unlawful commercial lending rule is strong, as indicated by the agency’s attempts to bend over backward to evade judicial review.
“In moving to dismiss ICBA’s complaint, the NCUA has mischaracterized our case, which is both timely and ripe for resolution,” Fine continued. “ICBA has made it clear that community banks, consumers and the financial system at large are threatened by the NCUA’s rule allowing tax-exempt credit unions to exceed congressional limits on commercial lending activity.”
Fine said the ICBA has “clearly demonstrated the tangible financial harm” NCUA’s rule would do to community banks and local communities. He further alleged the agency’s decision exceeds the limitations on commercial lending activity established by Congress for credit unions.
CUNA and NAFCU, in a joint statement, commented on the court's decision.
“We appreciate Judge Cacheris’ consideration of NCUA’s motion to dismiss ICBA’s groundless lawsuit. We are confident that NCUA acted well within its authority when it issued its member business lending rule. The CUNA/league system and NAFCU will continue to defend the NCUA’s authority to interpret the Federal Credit Union Act. Main Street small businesses are the lifeblood of our economy, and they need access to capital to succeed. Credit unions are committed to supporting their members’ efforts to grow their businesses and, by extension, to strengthen our nation’s economy,” said Dan Berger, president/CEO of NAFCU, and Jim Nussle, president/CEO of CUNA.