RICHMOND, Va. (1/21/16)--More than 375 Virginia credit union leaders descended on the General Assembly this week to advocate for bills related to charter flexibility and the authority to accept public deposits. Stakeholders met with 120 of Virginia’s 140 lawmakers, or their legislative aides, during the visits as part of the Virginia Credit Union League’s “Storm the Hill” event.
One bill would give regulators additional options in approving mergers, allowing credit unions to hold more than one charter, if deemed appropriate. The other would put credit unions among the institutions authorized to accept public deposits--for example, the funds managed by counties, cities and school boards.
“Our visits today with lawmakers were the continuation of four months of work in lobbying for these two key bills,” said Virginia Credit Union League President Rick Pillow. “Our credit unions wrote personal letters to legislators, held meetings in district offices and generated almost 5,000 emails to our lawmakers, all in support of our issues.”
Virginia House Bill (HB) 874 and Senate Bill (SB) 582 would grant the charter flexibility and is in response to consolidation within the credit union system. Virginia averages 10 credit union mergers annually, according to the Virginia league, but some potential mergers face significant regulatory obstacles when two credit unions have different, incompatible charters.
HB 871 and SB 583 concern the public deposits issue. Despite being tax-paying, local financial institutions, Virginia’s credit unions are not currently authorized to accept and hold these funds. This also precludes credit unions from providing banking services to public entities.
More than half the states allow their credit unions to accept public deposits. Even where authorized, credit unions average less than 5% of the market share for public deposits, but they are an important option for public entities, often providing a better return to taxpayers, according to the Virginia league.