NCUA said that federally chartered credit unions are exempt from a consumer protection statute passed by the Washington D.C., council aimed at battling predatory home lenders. In a legal opinion letter issued to the D.C. CU League, NCUA said the District's Home Loan Protection Act of 2002 is preempted for federal credit unions by the Federal CU Act, which regulates the rates, terms of repayment and other conditions of loans and lines of credit for federally chartered credit unions.
"Our opinion is that the District of Columbia may not require FCUs to comply with it," NCUA said. Since there are no locally chartered credit unions, the ruling has the effect of exempting all credit unions from complying with the predatory lending statute.
It is the third time in the past two years that NCUA has helped credit unions skirt local consumer protection statutes through preemptive rulings, including requests to do so for federal charters challenging applications of North Carolina's anti-predatory lending statute and California's credit card disclosure law.