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The NCUA on Wednesday filed a reply brief in support of its motion to dismiss the Independent Community Bankers of America's lawsuit against the agency and its member business lending rule. The brief answers ICBA's reply opposing the NCUA motion.

Earlier last week, NAFCU and CUNA moved to file an amicus brief in support of the NCUA's motion to dismiss the lawsuit, which challenges the agency's authority to issue its latest member business lending rule.

In the brief, NAFCU and CUNA argue that NCUA's interpretation of the Federal Credit Union Act in the rule is well within the agency's legal authority. The trade groups defend NCUA's definition of "member business loan" noting that it has not substantively changed since 2003 and by definition can only include loans made to a member of the lending credit union.

Specifically, CUNA and NAFCU contend that "No amount of linguistic alchemy can convert the term ‘member business loan' into its opposite, ‘nonmember business loan.' " ​

The ICBA filed suit against the NCUA in the U.S. District Court of the Eastern District of Virginia in September, claiming that the final member business lending rule provides credit unions a "loophole" they can use to increase their lending "in violation of the law."

NCUA's final MBL rule eliminated credit unions' personal guarantee requirement and, effective Jan. 1, will eliminate the waiver process. NAFCU praised the rule for easing the regulatory burden on credit unions and allowing them the independence to safely and soundly address the needs of their small-business members.