CEO DATELINE - Bank association files lawsuit to overturn credit union lending rule
CEO DATELINE - Bank association files lawsuit to overturn credit union lending rule
- September 7, 2016 |
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Walt Williams
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The Independent Community Bankers of America is suing to block implementation of a new federal rule that eases a major restriction on the growth of credit unions.
ICBA announced Wednesday it has filed a lawsuit against the National Credit Union Administration's commercial lending rule, which was adopted earlier this year. The new rule removes limits on business loans made to credit union members, which ICBA said is "unlawful" because Congress established those limits.
"The NCUA is attempting to unilaterally expand loopholes for tax-exempt credit unions by sidestepping Congress and putting consumers at risk," ICBA CEO Camden Fine said. "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."
The rule is part of a package of regulatory reforms being pushed by credit unions as part of an effort to grow the industry. Banks, which compete with credit unions for customers, have resisted the changes.
"ICBA and the nation's roughly 6,000 community banks believe that the credit union industry should not be allowed to continue expanding its lending authority as long as it remains exempt from taxation and the federal financial regulations that taxpaying community banks are obligated to meet," Fine said.
The National Association of Federal Credit Unions was quick to criticize the lawsuit. In a statement, CEO Dan Berger said the court action "raises to a new level the banking trade's campaign of misinformation and attempted intimidation in its effort to hinder credit unions' ability to serve their member small businesses."
The lawsuit was filed U.S. District Court for the Eastern District of Virginia. http://bit.ly/2c4L8fE
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