Judge Dismisses ICBA Credit Union Lawsuit

A federal judge today dismissed a lawsuit brought by the Independent Community Bankers of America challenging the National Credit Union Administration’s 2016 member business lending rule. The American Bankers Association supported the ICBA litigation that challenged the member business lending rule and amendments that weakened the statutory MBL cap, including making it easier to exclude nonmember loans from the cap calculation.

Judge James Cacheris said that ICBA lacked standing to sue, ruling that it could not demonstrate harm from the 2016 regulatory changes. In an unusual move, the court ignored Supreme Court precedent directing judges not to rule on the merits of the case if standing is not granted and found that the NCUA’s interpretation of “member business loan” was reasonable. The court also held that the challenge to the MBL rules was time-barred by the six-year statute of limitations because the underlying 2003 rule was not sufficiently “reopened” in 2016 to allow the challenge.

ABA remains supportive of the legal effort and will closely monitor any appeals and developments in the case, as well as in a separate lawsuit filed by ABA over NCUA’s expansive field of membership final rule.

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