Brief Filed in Mortgage Recording Tax Case

ABA and the New York Bankers Association last week filed a a motion “for leave to file the amicus.” If the court grants the motion, we will then file a friend-of-the-court brief asserting that the New York State Court of Appeals should affirm a lower court’s decision to dismiss Poughkeepsie-based Hudson Valley FCU’s claim that federal credit unions and their members are exempt from paying the New York state mortgage recording tax.

“While ABA and the NYBA acknowledge the limited tax exemption provided to federal credit unions by the U.S. Congress in the Federal Credit Union Act, Hudson Valley’s position in this appeal expands that tax exemption beyond its clear terms,” the trade groups’ brief said.

“In doing so, Hudson Valley seeks to obtain an unwarranted competitive advantage over hundreds of other mortgage lenders -- and/or those lenders’ thousands of mortgage loan customers -- who are required to pay the mortgage recording tax … ,” the brief said.

The trade groups asserted in their brief that the Federal Credit Union Act makes it clear that it does not grant tax immunity to credit union borrowers or to credit unions for tax payments made on behalf of those borrowers. “The FCUA also does not exempt either ‘mortgages’ or ‘loans’ from taxation,” they said.

Read the brief.