News & Information

Bankers attack CU business lending, credit union system fights back

by Christine Henzig, Director of Communications Sep 30, 2016

The credit union system is fighting bankers' latest effort to put credit unions out of business.

What

The League/CUNA system is challenging a lawsuit filed this month by the Independent Community Bankers of America (ICBA) that aims to stem the flow of credit unions' member business loans (MBLs). 

ICBA is claiming that National Credit Union Administration (NCUA) violated the MBL restriction in the Federal Credit Union Act (FCUA) by allowing all credit unions to exceed the statutory 1.75 times actual net worth limitations on MBLs. ICBA contends that NCUA did this by allowing credit unions to exclude non-member loan participations from aggregate MBL calculations.   

Why

For decades, bankers have executed strategies to litigate, legislate and regulate credit unions out of business.

Our system's challenge to bankers' lawsuit exposes baseless banker intimidation of our system's federal regulator. CUNA has said that NCUA acted appropriately and followed all procedures when issuing the MBL rule, and that the rule falls well within NCUA's statutory authority to interpret the application of the MBL cap.  

Ongoing advocacy

All but four Wisconsin credit unions are state-chartered and follow state requirements set forth in DFI-CU 72 instead of the NCUA's recently revised MBL rule. But our system is defending the rule change by NCUA because it represented a win for the credit union movement; Activists' nationwide advocacy on the issue set a new standard for regulatory flexibility by doing away with restrictions not specifically required by law.

The League supports legislation and policy that ensures credit union members have full access to the products and services they desire through their credit union without unreasonable restrictions and limitations.

Wisconsin credit unions are collaborating on business loan participations through Reach Business Lenders™, LLC.


The Unite for Good effort is an internal growth strategy developed by CUNA in conjunction with its Board, state leagues, credit unions and system partners. The plan's action steps – to remove barriers, increase awareness and foster service excellence–are aimed at helping more credit unions become their members' primary financial institution by compelling members to see credit unions as their best financial partner. Read more articles in our Unite for Good series.