The Virginia Credit Union League said it is now working on a compromise bill in the state legislature dealing with CU-to-mutual conversions that will address elements of proposed bank-sponsored legislation to allow Virginia banks to purchase state credit unions and vice versa.
A league spokesman said new wording being sought by the league would simply "ease the path" for state-chartered CUs to convert to a mutual status, an area currently not covered in Virginia law.
Original bills introduced last month by the Virginia Bankers Association, and opposed as unworkable and a threat to member's rights' by the league, would allow banks to purchase non-stock CUs and in reverse let CUs buy small community banks.
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The league has maintained there are few Virginia CUs, many of them small, which have the capacity to buy a bank, but recession-hit banks now covet CU capital and the industry's growing market share.
On that score, Richmond Times Dispatch business columnist Jeff Schapiro over the weekend called the bank/CU legislative fight "an old-fashioned, big-money, insider brawl" in which banks "navigating the rubble of a deep recession are attempting to hoover up the few dollars available in a tough credit market."
"Though Virginia's banks and credit unions have a common interest-managing and investing billions of dollars-they function within entirely different templates, contributing to the friction," wrote Schapiro. Citing the profit-vs. nonprofit status, Schapiro said the battle comes down to "plutocrats versus the proletariat."
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