Credit union trade groups on Wednesday blasted the Independent Community Bankers of America for filing suit over the NCUA’s new MBL rules, contending that the suit amounts to a publicity stunt and a baseless attack on credit unions.
“This suit 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,” said NAFCU President/CEO Dan Berger.
The ICBA filed suit in federal court in Virginia, arguing that the new rules allow credit unions to exceed limitations on business loans that were established by Congress. The group also argues that the agency is loosening regulatory oversight, creating risks for consumers and the financial system.
In adopting the new rules, the NCUA said it was moving away from prescriptive limits on credit unions such as collateral and security requirements, equity requirements and loan limits and to a principles-based regulation.
The NCUA is reviewing the suit and will respond in federal court, Public Affairs Specialist John Fairbanks said.
CUNA President/CEO Jim Nussle also condemned the suit.
“This baseless attack on the NCUA’s rule ignores the law and the NCUA’s authority in crafting regulations for credit unions,” he said. “This lawsuit lacks merit, and is merely a self-serving publicity stunt to distract community bankers from the real issues that should be concerning them, namely the encroachment by large banks into the business of small banks and their resulting loss of market share.”
Berger said the MBL rules are a well-considered approach that allows more credit unions to serve their members’ needs. “During the crisis, the banks weren’t complaining about MBL, they were avoiding new business loans altogether,” Berger said. “Credit unions, by contrast, stepped up.”
“If the banks had put this much effort and money in policing themselves, maybe they could have helped prevent the financial crisis they caused that harmed consumers and our country’s economy,” he said.
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