Banker group files suit over provision in new MBL rule
Sept. 7, 2016 -- A federal court has been asked by a bankers’ group to invalidate and set aside a provision in NCUA’s new member business lending rule that allows federally insured credit unions to exclude purchased commercial loans or participations in such loans from the aggregate cap on MBLs.
In the lawsuit filed today in U.S. District Court for the Eastern District of Virginia in Alexandria, the Independent Community Bankers of America (ICBA) asked the court to declare that NCUA acted “arbitrarily and capriciously” and without statutory authority in concluding in the MBL rule (adopted by the agency last spring) that “to purchase a commercial loan or an interest in a commercial loan from another lender is not to ‘make’ a commercial loan within the meaning” of the law.
Additionally, the bankers’ group (based in Washington, and representing primarily “community” banks), asked the court to invalidate and set aside the rule to the extent that its provisions “purport to treat any acquired commercial loans or interests in such loans as anything other than a ‘member business loan’ for purposes of the lending restriction.”
NCUA Spokesman John Fairbanks said today that the agency reviewing the complaint, and “the agency will respond.” NCUA has 60 days to respond.