<p>By SARAH SNELL COOKE CU Times Washington Reporter WASHINGTON-The National Community Reinvestment Coalition (NCRC) filed a federal lawsuit last week challenging the NCUA's repeal of the Community Action Plan (CAP), which would have required community-based credit unions to supply NCUA with a plan of how it intended to serve its entire community. The regulation would have become effective December 31, 2001. Instead it was repealed by a vote of two to one, over author Yolanda Wheat's objection, at the December 13 board meeting. Specifically, the lawsuit alleges that NCUA failed to comply with the mandatory requirements of the Administrative Procedure Act (APA), prior to the repeal of these regulations. Wheat raised this issue several times during the board meeting that brought down CAP and predicted that NCUA would be dragged into some legal action over the situation. According to Wheat and NCRC, NCUA needed to allow proper time for public comment before repealing the regulation instead of issuing an interim final rule. In issuing the interim final rule, NCUA is allowing for public comment through February 19. NCRC has already submitted a comment letter to the agency opposing the repeal. The CAP had been a highly contentious issue between the regulator and credit union trade associations. CUNA initially threatened its own lawsuit if the regulation was allowed to become effective. Several lawmakers, including former Senate Banking Committee Chairman Phil Gramm (R-Texas), were strongly opposed to CRA-like regulation for credit unions. NCRC, which claims more than 800 member organizations, explained that it took legal action because repealing implementation of the community service plan requirement is unjustifiable and creates a substantial harm to its efforts and the efforts of its members to expand access to credit for low- and moderate-income communities and individuals. The Lawyers' Committee for Civil Rights Under Law, a 38-year-old, nonpartisan, nonprofit civil rights legal organization, and the law firm of King & Spalding filed the lawsuit on behalf of NCRC. "The NCUA has violated the APA and mishandled the `CRA Lite' or community service provision that other regulators enforce and responsible lenders celebrate," NCRC Senior Vice President of Programs David Berenbaum charged. "We are filing this lawsuit so that this indispensable community service requirement will be reinstated." NCRC's lawsuit alleges, "The public availability of the information required to be maintained under the community service plan requirement is essential to NCRC's efforts to achieve its mission of increasing access to capital for traditionally underserved communities. Without this information, NCRC's ability to analyze lending data and to render accurate advice to its members regarding the availability of credit products and financial services will be severely impaired." NCUA Chairman Dennis Dollar was traveling on agency business, but his Special Assistant for Public Affairs Nick Owens issued this statement, "NCUA stands by the board's decision to authorize the interim final rule regarding CAP. Chairman Dollar maintains that another Washington-formulated regulation is not required for America's credit unions to serve low-income, underserved communities. In fact, Congress has stated that CRA should not apply to credit unions. Therefore, `CRA-like' programs should not be dictated to credit unions. Last year was a record year for service to the underserved, as credit unions adopted over 16.1 million potential new members in their fields of membership – these are underserved communities where folks do not have adequate access to affordable financial services. Everyone should have access to affordable financial services and economic security.The interim final rule was legally right and for serving these communities, it was the right decision at the right time." Berenbaum said that the organization has not been in touch with CAP-sponsor Wheat, though they did receive a tape of the December board meeting, or any groups outside NCRC, which includes among its members credit unions, municipal planning groups, and CRA advocacy groups. He commented that NCRC monitors the activities at all the relevant regulators, which is how CAP came up on their screen. Berenbaum added that he expects to hear a response from the regulator within 60 days of the court filing. NCRC is additionally asking the court that NCUA reimburse its legal costs, as well as "further relief as this Court deems just and proper," the complaint read. [email protected]</p>