The two most recent major rules finalized by the National Credit Union Administration (NCUA) have been challenged by banking trade associations in court. But the legal rulings might not be necessary.
An examination of NCUA’s rules on member business lending and field of membership show each rule is subject to the 60-day window of the Congressional Review Act (CRA), which would allow Congress to reject and repeal the legislation.
To do so, the House, Senate and president would have to sign a bill noting Congress’ disapproval of the regulation. As the House has adjourned for the year, the 60-day window for review reaches back to May 26. The member business lending rule was published in the Federal Register March 14, but it was not reported to the House until June 14, making it well within the window. The field of membership rule was published in the Federal Register Dec. 7.
“We looked into it and we think the CRA applies to it,” Independent Community Bankers of America (ICBA) Executive Vice President and Senior Regulatory Counsel Chris Cole told Dodd Frank Update.
Cole said ICBA was asked by the House Government and Oversight Committee to submit a list of regulations which potentially could be subject to the CRA. That list now will include the member business lending rule, which ICBA has taken NCUA to court to contest.
“That is not slowing us down in our lawsuit, because who knows what is going to happen with this CRA business,” Cole said. “It would be great if the rule was reversed, but the lawsuit we’re really immersed in, we have a big hearing Dec. 15 on it.”
The case between ICBA and NCUA has a hearing Dec. 15 on NCUA’s motion to dismiss, which Cole said ICBA has been busy preparing to argue.
The American Bankers Association recently filed suit against NCUA over its field of membership rule, which had been finalized in October. It, too, could be reversed by the CRA process.
“I think the fact that you have a regulatory agency facing two lawsuits about two rules done in succession says something about how egregious these actions are,” Cole said, “that this agency is out of control, it’s no longer independent, it’s advocating for its industry, and it’s incorrectly interpreting the Federal Credit Union Act.”