NCUA Seeks Dismissal of Banker Lawsuit Posted by Association of Vermont Credit Unions on 11:03 AM

As reported by CU Journal, the National Credit Union Administration filed a district court motion today seeking dismissal of a lawsuit over its member business lending rule filed by the Independent Community Bankers of America. NCUA also filed a 31-page memorandum defending the MBL rule on the basis of:

• the original Federal Credit Union Act of 1934
• rulemaking from the late nineties, 2003 and the current rule, finalized earlier this year.

NCUA's court documents say the ICBA has not suffered any injury as a result of the rule and that the suit is essentially a challenge to the 2003 rule and is therefore time-barred from litigation. The agency claims that ICBA "has failed to state a claim upon which relief can be granted," and that the challenge "is based on a disagreement with NCUA's interpretation" of the rule.

CUNA and NAFCU also filed a joint statement in support of NCUA:

". . . the NCUA acted well within its authority when it issued its member business lending rule. Submitting a motion to dismiss this baseless attack is the logical next step for the agency in defending that right. For our part, the CUNA/league system and NAFCU will continue to work collaboratively to defend the NCUA's authority to interpret the Federal Credit Union Act. Ensuring small businesses have access to much-needed capital remains a top priority for the credit union industry."

NCUA's motion to dismiss comes on the heels of its approval of its field of membership rule expansion, which broadens membership options for federal credit unions. ICBA has indicated it intends to sue over that rule, as well.