Legal & Regulatory
NYBA sometimes defends against unfair treatment of the banking industry by government entities by bringing or participating in litigation on behalf of its member banks. The Association has, over the years, brought several successful landmark cases in order to protect the industry’s ability to operate appropriately in the free market.
The New York Court of Appeals (New York’s highest level court) has affirmed the decision of the Appellate Division, First Department, in an important case affirming limits on federal credit unions’ exemption from taxation. The Appellate Division had dismissed the claim of Hudson Valley Credit Union who argued that it was exempt from the New York State Mortgage Recording Tax (MRT). NYBA and the American Bankers Association filed a friend of the court brief in support of the New York State Department of Taxation and Finance in this matter. The decision finds that “the elimination of the MRT on credit union mortgages could conceivably lure mortgage business away from banks by offering lower closing costs to credit union borrowers, thereby giving credit unions a competitive advantage over the banking industry in New York. Had Congress intended to alter the mortgage-lending playing field between federal credit unions and banks, it could have stated such an intention.”
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- NYBA and the American Bankers Association (ABA) have written a joint letter to Judge William H. Pauley, III of the United States District Court, Southern District of New York, asking that the Judge reconsider his Memorandum & Order in the case of the Retirement Board of the Policement’s Annuity and Benefit Fund of the City of Chicago, et al. v. The Bank of New York, Mellon. In that case, the Court ruled that issuances of residential mortgage-backed securities (RMBS) constitute debt, not equity, securities and therefore are subject to the Trust Indenture Act of 1939. NYBA and the ABA asked that the Judge reconsider his order, as this decision is inconsistent with well-settled, long-standing guidance of the SEC. In our letter, we also ask that, if the Court is unwilling to reconsider his decision, he certify the Order for appeal. In a follow-up letter, we also requested that the Court grant leave for us to file our initial letter as amicus curiae.
Michael P. Smith, President, NYBA, at (212) 297-1699
Roberta Kotkin, General Counsel & Chief Operating Officer, at (212) 297-1684
Clare M. Cusack, Senior Vice President, Government Relations/Deputy General Counsel, at (212) 297-1664.