Despite support from the federal government, the Hudson Valley FCU lost a battle in a New York State trial court about whether it has to pay a mortgage-recording tax. New York Supreme Court Justice Judith Gische ruled that based on previous cases, the courts had determined that the tax is not a tax on property but a “privilege,” and therefore not part of the tax exemption granted federal credit unions under the Federal Credit Union Act. She also dismissed the claim the US Constitution’s Supremacy Clause caused Hudson Valley FCU to be exempt from the tax.