Removing Barriers Blog

CUNA and NAFCU File Amicus Brief Supporting NCUA’s Motion to Dismiss MBL Lawsuit
Posted November 22, 2016 by CUNA Advocacy

Today, CUNA and the National Association of Federal Credit Unions (NAFCU) filed an amicus brief in the U.S. District Court of the Eastern District of Virginia supporting the National Credit Union Administration’s (NCUA) motion to dismiss the lawsuit recently filed by the Independent Community Bankers of America (ICBA) which challenges the agency’s authority to issue that latest member business lending rule.  In the brief, we argue that NCUA’s interpretation of the Federal Credit Union Act in the rule is well within the agency’s legal authority and defend NCUA’s definition of “member business loan” (MBL) noting it has not substantively changed since 2003 and by definition can only include loans made to a member of the lending credit union.

 ICBA’s main complaint in their lawsuit is that the NCUA’s 2016 final MBL rule improperly excludes non-member loan participations from the definition of MBL and thus does not count loan participations against the statutory MBL lending cap.  NCUA has not defined a loan participation as an MBL since 2003 but had required credit unions count loan participations in the statutory cap calculation unless a credit union obtained a waiver.  The 2016 rule eliminates that and all other waiver requirements to provide regulatory relief to credit unions.  

CUNA and our attorneys will continue to closely monitor the litigation and support NCUA’s MBL rulemaking effort.