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Va. CU-bank battle on merger bill in the news
RICHMOND, Va. (2/2/10)--The battle between credit unions and banks over a bill in Virginia's state legislature that would allow banks to merge with credit unions--and vice versa--is attracting media attention in the state. Sunday's Richmond Times-Dispatch included a column, "Bank bill triggers quiet war," by writer Jeff E. Schapiro, who wrote that "banks plotting--maybe plodding--for post-recession profits have a new target: credit unions." At issue are identical companion bills, House Bill 482 and Senate Bill 440, which were introduced in January by Del. Mark Sickles (D-43) and Senate Commerce and Labor Committee Chairman Richard Saslaw (D-35) (News Now Jan. 22). The Virginia Credit Union League opposes the bills, as written. "We view it as a one-way street, an effort by banks to make it easier to consolidate with credit unions," league President/CEO Rick Pillow had told News Now last month. In his column, Schapiro wrote that credit unions see the bill as a "dead-end bill," allowing banks to consume credit unions, while not too many banks become credit unions. Schapiro wrote that though the state's banks and credit unions have a common interest--managing and investing in billions of dollars--they function within entirely different templates. Banks, particularly smaller banks, he wrote, "covet the loyal customer base of credit unions." "The credit unions have a bigger worry: Could the banks, navigating the rubble of a deep recession, only be hunting for capital, attempting to hoover up the few dollars available in the credit market?" Schapiro asked. To do so will require tweaking the law and eliminating a technicality that stopped a state-chartered bank in Northern Virginia from merging with a credit union, he said. Banks already have balked at the credit unions' proposal that a merged bank and credit union operate as a mutual savings bank, with depositors as shareholders, he wrote. To read the article, use the resource link.
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