Virginia bankers appear ready to introduce a bill in this year's session enabling 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 credit unions and their CUSOs and in turn credit unions could purchase banks under revised regulations.
Officials of the Virginia Bankers Association stress any legislative proposal "is very much premature" with no bill drafted.
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Still the issue created a stir last month among CUs who suggested that banks might be finding CUs attractive now as sources of capital.
Just how CU acquisitions would clear regulatory hurdles was not quite clear, but the topic has came up for discussion last 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 awfully lot of slippery slopes allowing conversion from a stock to a nonstock corporation."
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