NEW YORK (7/27/10)--The dismissal in May of Hudson Valley CU's lawsuit contesting New York's mortgage recording tax (MRT) has also resulted in the end of a class action suit against the credit union for charging the tax to its mortgage borrowers. Three credit union members who paid the tax required under New York law have dropped their suit in the U.S. District Court for the Southern District of New York against the credit union and title insurance companies (Times Herald-Record July 24). Their suit claimed that the taxes were unlawful under the Federal Credit Union Act and should not have been charged because the credit union knew the taxes were illegal (News Now June 4). The members filed a voluntary dismissal on Thursday. Their lawyer, Mark Kindall of Izard Nobel, a Hartford, Conn., law firm, told the Times Herald-Record that the judge's ruling in May to dismiss the credit union's case against the state made proceeding with the class action suit substantially more difficult. They had sought the refunding of three times the tax paid to have their mortgages recorded with their counties. The central argument of their case maintained the Federal Credit Union Act prohibits such taxes on them. The Poughkeepsie, N.Y.-based credit union filed suit in May 2009 against the New York State Department of Taxation and Finance saying the credit union is exempt from the MRT. However, State Supreme Court Justice Judith Gische dismissed the credit union's challenge on May 20, thus killing the central argument in the borrowers' suit. The credit union has appealed the ruling ( May 24).