ALEXANDRIA, Va. - A U.S. District Judge has dismissed an effort to roll back the NCUA regulations that oversee credit union conversions to bank charters.
U.S. District Judge Claude Hilton dismissed the Coalition For Credit Union Charter Options' attempt to overturn NCUA's regulations finding that the group lacked standing to bring the complaint. The coalition is a banker-led group which seeks to support credit unions which seek to become banks.
The Coalition brought the case in July of this year, arguing that the agency's charter change procedures are more difficult and complicated than Congress meant them to be and that they imposed too great a burden on converting credit unions.
But the judge agreed with the agency that the coalition lacked standing to bring its complaint.
"Plaintiff has made no showing that any of its members are immediately in danger of sustaining any direct injury as a result of the challenged regulations," Judge Hilton wrote in his order dismissing the case. "While Plaintiff has alleged that the challenged regulations have made charter conversions more expensive to undertake, it does not allege that any of its members have any immediate plans to convert to a mutual savings bank or that the regulations would prevent them from doing so."
"Because Plaintiff has failed to establish that it has or will likely suffer an injury in fact that is actual or imminent, it lacks standing to assert this Action and this Court lacks subject matter jurisdiction," the Judge added.
John McKechnie, NCUA Director of Public and Congressional Affairs, expressed the agency's satisfaction with the ruling.
"NCUA is gratified that the Court agreed with our position that the Coalition lacked standing to challenge the Agency's conversion regulations. NCUA was confident that the Court would recognize that the Coalition's members are not in immediate danger of being harmed by the regulations, do not have immediate plans to convert to a mutual savings bank, and would not be prevented by NCUA regulations from doing so in any event."
CUNA CEO Dan Mica also weighed in, saying the decision "ensures that the federal agency that best understands credit unions and their commitment to their members continues to have authority over the conversion process of credit unions to another type of financial institution."
"We concur with this outcome, commend NCUA for its rulemaking, and continue to believe that credit union members deserve transparency and openness when they are faced with a tough decision about whether their credit union should convert to another form of financial institution," Mica added.
--dmorrison@cutimes.com
