RICHMOND, Va. – The state House Commerce and Labor Committee voted unanimously in favor of substitute language for a banker-sponsored bill early Friday morning.
The old language would have allowed banks to merge with credit unions, but the new edition, drafted primarily by the Virginia CU League, transformed the legislation into a charter choice bill for state-chartered credit unions.
A full House vote on the bill could come as early as Monday, with a Senate Commerce and Labor Committee hearing on the legislation also set for the same day.
"This is a positive result for what was a desperately flawed bill. Credit unions were successful in transforming this legislation from a merger and acquisition bill into a credit union charter choice bill," VCUL President Rick Pillow said in a statement. "The original language in this bill would have been disastrous for credit union member-owners in Virginia, because it failed to protect member rights in cases of a conversion to or acquisition by a for-profit bank."
The new language affords state-chartered credit unions the same ability to choose to convert to a mutual savings bank that federally chartered credit unions are given. State-chartered credit unions have to follow the same guidelines federal credit unions do when considering conversion.
Even though its original bill was changed dramatically, the Virginia Bankers Association appeared to be pleased with the outcome of the House vote and the legislation’s progression through the Congress. "We are very happy that the committee reported the compromise language, which reflects input from the League, the SCC and VBA," spokesman Phil Boykin told Credit Union Journal. "We were always open to language from the League and are glad that they finally came to the table. I know that the vast majority of legislators expected the League to work something out with us. It is exciting that Virginia chartered credit unions will now have a path to convert to a mutual savings should they choose."
