Stressing discussion is still "very much premature," the Virginia Bankers Association is exploring a bill in the next legislative session to allow banks to buy credit unions and vice versa.

The bill's concept, already drawing fire from the Virginia Credit Union League as potentially injurious to the industry, would enable banks to acquire CUs and their CUSOs, and in turn CUs could purchase banks under revised regulations.

Just how acquisitions would clear regulatory hurdles was not quite clear, but the topic has come up for discussion during the month at chapter meetings of the Virginia league.

Rick Pillow, president/CEO of the league, who said he was contacted a month ago by his VBA counterpart about the proposal, said only the state's largest CUs could even undertake such a purchase venture, and since 75% of Virginia credit unions are under $15 million, the concept does not look practical.

Moreover, any bill would need "protections for credit union members and to ensure against CEO or board windfalls," he said, adding there "are an awful lot of slippery slopes allowing conversion from a stock to a nonstock corporation."

Pillow speculated a contingent of Virginia bankers "may be finding credit union capital quite attractive" which may account for that industry's motivation in pushing a bill.

In comments before a meeting of the league's Richmond chapter, Pillow said, "We don't need any more banks, what we need is more people utilizing the services of credit unions." He warned against banks trying to dictate CU structure.

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FI Swap? Bankers Float Idea to Buy CUs and Vice Versa

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