Making good on threats it had made previously, the Independent Community Bankers of America filed suit Wednesday against the National Credit Union Administration, claiming the agency's recent overhaul of its member business lending rules violate two different laws.
As part of the 1998 Credit Union Membership Access Act, Congress limited the size of credit unions' member business lending portfolios to about 12.25% of total assets. But the ICBA argues that new rules approved in February allows credit unions to exceed the cap by not counting certain purchase loan participations against it. The community bank trade group says the rules are "contrary to the plain language" of both the Federal Credit Union Act and the Credit Union Membership Access Act.
"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," Camden Fine, the ICBA's president and chief executive, said in a press release.
The lawsuit, Independent Community Bankers of America v. National Credit Union Administration, was filed in the U.S. District Court of the Eastern District of Virginia.
In filing the suit, Fine made good on a warning he issued in November, when he told American Banker that "there's a good chance we may litigate if NCUA doesn't back off."
The ICBA said it is considering filing a second lawsuit to challenge changes the NCUA made recently to the field of membership regulations.