20 Hoosier Banker November 2016 FEATURE For Independent Community Bankers of America, it was simply the last straw. It wasn’t even a close call. The National Credit Union Administration’s irresponsible power play earlier this year to ignore the explicit member business lending limits Congress has set for credit unions could not be ignored. As you’ve heard by now, the ICBA has filed a federal lawsuit against the NCUA for its flagrant disregard for the plain meaning of both the letter and the spirit of the Federal Credit Union Act. Specifically, on behalf of community banks nationwide, the association has asked a federal court to invalidate the NCUA’s member business lending rules set to take effect in January. If unchallenged, the NCUA’s latest rogue promulgation will deliberately create loopholes so vast as to render meaningless the explicit statutory 12.25-percent-total-asset cap on credit union commercial lending that Congress purposefully put in place. Certainly this disingenuous regulatory interpretation will expand, to an absurd degree, the federally funded competitive advantages tax-exempt credit unions enjoy over community banks. In the process, however, the regulation also tramples upon consumers, taxpayers, the financial system and the integrity of responsible government. Adding further shame to the NCUA’s action, Congress has repeatedly and formally rejected credit union efforts to expand their commercial lending activities. Community bankers know firsthand the NCUA’s longstanding reputation for bureaucratic featherbedding, rather than impartial regulation. ICBA has long and repeatedly criticized the NCUA for abandoning its duty to act as a responsible regulator overseeing a highly subsidized industry. Time after time, incremental step by egregious step, the agency has transparently chosen the role of a permissive enabler of unbounded credit union industry demands. Mostly serving the wishes of a few large, aggressively growth-oriented credit unions, the NCUA for years has adopted rulemakings that plainly bend, stretch and waltz around clear congressional statutes and intentions. A still freshly minted case in point that ICBA is closely monitoring involves the NCUA’s proposed field-of-membership rule that would eviscerate the definition of “well-defined local community,” which by law limits the territory a community-based credit union can serve. If adopted, that proposal would make an absolute mockery of statutory credit union membership restrictions, allowing by one example a seven-state territory to qualify as “local” community from which credit unions could accept members. Enough is enough! NCUA is too far out of control. For the ICBA, it’s time to take a firm and unequivocal stand against the NCUA’s unlawful regulatory adventurism. By filing its lawsuit, the ICBA wants simply to compel the agency to adhere to the law when writing its rules. Our legal action is not undertaken lightly. We did not want or seek this fight, but we are compelled to defend community banks and Main Street America and, fundamentally, the integrity of equal protection under law. Failing to act otherwise would tolerate government malfeasance and, yes, arbitrary tyranny. America’s founding principles and heritage demand that no person is above the law. Neither is any private corporation or, as our lawsuit reminds, any public agency. As the nation’s voice for community banks, the ICBA is taking this stand on behalf of the nearly 6,000 community banks nationwide. Our action reflects ICBA’s mission to create and promote an environment where community banks flourish. If necessary, we will take our cause all the way to the U.S. Supreme Court. t About the Author Camden R. Fine is president and chief executive officer of the Independent Community Bankers of America. He came to the ICBA from Midwest Independent Bank, Jefferson City, Missouri, where he chartered and organized the bankers’ bank and served as president and CEO for nearly 20 years. A long-time member of the ICBA prior to becoming the association’s president and CEO, Fine served on several association standing committees and on the ICBA board of directors. The author can be reached at: cam.fine@icba.org. Taking Our Stand
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