The agency that regulates credit unions in Washington state has suspended hearings on the new MBL rule designed to expand business lending after a banking organization filed suit challenging the rules.
The Washington State Division of Credit Unions said it temporarily suspended the four hearings scheduled for this fall at the request of “some of Washington state-chartered credit unions.” The hearings were to update the Washington State MBL Rule.
The turnabout came after the Independent Community Bankers of America filed suit Sept. 7 in federal court asking that the NCUA vacate the rule it approved in February. The ICBA accuses the NCUA of overstepping its authority and being unfair to for-profit banks.
“We concur that, while the Division of Credit Unions and credit unions analyze this lawsuit and its implications (if any) for Washington State, it would be prudent to temporarily suspend our rule-making process at this time,” the agency said in a Sept. 19 news release.
The state agency examines and supervises state credit unions for safety and soundness and compliance with applicable credit union law in order to protect members’ financial interests.
CUNA and other credit union advocacy groups have supported the MBL rule change. NAFCU officials said the rule would “provide economic stimulus without costing the taxpayer a dime.”
“We support NCUA’s member business loan regulation as a carefully-considered rulemaking that falls well-within the agency’s legal authority,” said NAFCU spokeswoman Patty Briotta. “Although litigation can breed uncertainty in these situations, we do not believe that should be the case here. We continue to support NCUA moving forward with implementing the rule.”
The Northwest Credit Union Association (NWCUA) declined to comment.
Ryan Donovan, CUNA’s chief advocacy officer, said “CUNA intends to work with the NWCUA to better understand why the Washington state regulator is taking this action given the strength of NCUA’s position.”
