The Independent Community Bankers of America has decided not to appeal a federal judge's decision to toss an ICBA suit challenging the NCUA's Member Business Lending rules.
"Instead, ICBA will explore all avenues for redress of the NCUA's unjustified and outrageous expansion of limitations on credit union commercial lending activities under current congressional statutes," ICBA President/CEO Camden Fine said.
Fine went on to say that the NCUA is a "captive regulator" of credit unions and that the ICBA will take the issue to Capitol Hill.
The NCUA had 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 ICBA contended that the new rules violated federal law governing credit unions and provided unfair competition to banks because credit unions are tax exempt.
Judge James C. Cacheris of the Eastern District of Virginia said the lawsuit had no substantive merit.
The case illustrates the difficulty in challenging rules under the so-called Chevron doctrine in which the U.S. Supreme Court said that in most cases, courts must defer to federal agencies' interpretations of statutes.
"ICBA will continue to call on Congress to prevent credit unions and their captive regulator from continuing to unreasonably expand their activities beyond any limits justified by their tax exemption, especially at the expense of community banks," Fine said.
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