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ICBA’s Challenge to MBL Rule Revisions: A Day Late and a Dollar Short

Credit unions should keep a close eye on pending litigation involving the MBL and FOM rules.

By Gina Carter | Updated on February 07, 2017

On Jan. 24 the U.S. District Court of the Eastern District of Virginia dismissed a closely-watched lawsuit involving an attempt by the Independent Community Bankers of America to roll back a February rulemaking that allows federal credit unions to extend business loans to nonmembers. The court’s dismissal rested on two main points, one that was particular to this case, and one that will likely arise again in pending and future litigation involving banks and credit unions.

The ICBA sought a declaration that the NCUA violated federal law by adopting the aforementioned rule, and during the early stages of litigation the court focused on two vital requirements the lawsuit had to meet in order to proceed. The first one – and the one far more particular to this specific case – involved a statute of limitations built in to the Administrative Procedure Act which states that there is six-year period for challenging agency regulations. The second requirement involved issues of standing – did the ICBA have the legal right to bring the lawsuit?

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