Pub. 4 2016 Issue 3

17 Fall 2016 The Community Banker TAKING OUR STAND By Camden Fine, President and CEO of ICBA F or Independent Commu- nity 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 Con- gress has set for credit unions could not be ignored. As you’ve heard by now, ICBA filed a feder - al lawsuit last month against the NCUA for its flagrant disregard for the plain meaning of both the letter and the spirit of the Federal Credit Union Act. Specif- ically, on behalf of community banks nationwide, the associa- tion 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 mean- ingless the explicit statutory 12.25-percent-total-asset cap on credit union commercial lending that Congress purpose- fully 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 re- peatedly and formally rejected credit union efforts to expand their commercial lending activ- ities. Community bankers know firsthand the NCUA’s longstand - ing reputation for bureaucratic featherbedding rather than im- partial 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, incre- mental 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-ori- ented credit unions, the NCUA for years has adopted rulemak- ings that plainly bend, stretch and waltz around clear congres- sional 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 adopt- ed, that proposal would make an absolute mockery of statu- tory 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 ICBA, it’s time to take a firm and unequivocal stand against the NCUA’s unlawful regulatory adventurism. By filing its lawsuit, 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 malfea- sance and, yes, arbitrary tyranny. America’s founding principles and heritage demand that no man is above the law. Neither is any private corporation or, as our lawsuit reminds, any public agency. As the nation’s voice for com- munity banks, ICBA is taking this stand on behalf of the nearly 6,000 community banks nation- wide. Our action reflects ICBA’s mission to create and promote an environment where commu- nity banks flourish. We will take our cause all the way to the U.S. Supreme Court if necessary. Camden R. Fine (cam.fine@icba.org) is president and CEO of the Independent Community Bankers of America. Fine Points