ICBA Fires Back at NCUA in Fight Over Business Lending Suit

The Independent Community Bankers of America have asked a federal judge to reject a motion by the National Credit Union Administration petitioning for the dismissal of a lawsuit filed by ICBA that challenges recent revisions to the agency's member business lending regulation.

The move sets the stage for a Dec. 15 courtroom showdown that will determine whether or not the suit ICBA filed in September will proceed, according to Christopher Cole, ICBA's senior vice president and regulatory counsel.

"Our bankers feel NCUA is an agency that has been pushing the envelope for years," Cole said Thursday in an interview. "They feel it needs to be reined in…I haven't run into any community bankers who've opposed [the lawsuit]. They're in full support."

Earlier this month, NCUA filed a 31-page memorandum defending its member business lending, along with a motion to dismiss the suit, with the U.S. District Court for the Eastern District of Virginia.

The case, Independent Community Bankers of America v. National Credit Union Administration, has been assigned to Judge James C. Cacheris.

In a written statement supporting ICBA's motion asking Judge Cacheris to quash NCUA's bid to terminate the suit, Cole listed seven banks that have lost loans totaling more than $50 million to competing credit unions.

At issue in the suit is a provision that permits credit unions to exclude loans or loan participations made to non-members from counting against the statutory cap that limits a credit union's member business loan portfolio to approximately 12.25% of total assets.

NCUA's board voted in February to approve revisions to the MBL rule.