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LISA MCCUEVICE PRESIDENT OF COMMUNICATIONS
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TOM SAKASHSTAFF NEWSWRITER

News Now

CU System
Virginia league opposes CUbank merger bills
LYNCHBURG, Va. (1/22/10)--The Virginia Credit Union League is opposing two bills in the state legislature that would allow state banks to merge or consolidate with state-chartered credit unions, according to Rick Pillow, league president/CEO. The identical companion bills, House Bill 482 and Senate Bill 440, were introduced last week by Del. Mark Sickles (D-43) and Senate Commerce and Labor Committee Chairman Richard Saslaw (D-35), Pillow told News Now. The bills, as introduced, do two things, said Pillow: They would allow a state bank to merge or consolidate with a state-chartered credit unions, and would allow a federal credit union or state-chartered credit union to merge or consolidate with a state bank. "I have never had a credit union suggest that this was a strategy that they'd like to use," Pillow said, adding that banks don't try to become credit unions. "We view it as a one-way street, an effort by banks to make it easier to consolidate with credit unions." "The league board voted to oppose both bills as introduced," he said, adding that he was in meetings Wednesday with lawmakers and bankers emphasizing several points, namely that the bills don't protect the credit unions' members.. "The bills have no protections of members or of the rights of members who own credit unions or of their equity in credit unions. In non-stock to stock conversions, or for-profit to stock corporations--none of the scenarios adequately protect members and their rights." Among the bills' shortcomings: "They don't address members' notice requirements, financial disclosure requirements, member voting requirements, the enrichment of directors and executives, and how they would appraise members' equity in the credit union. What's the rush to judgment here?" he asked. "We will continue open discussions with bankers to see if there's common ground or compromise, but the league will aggressively let them know we don't support these bills as introduced." "We're gearing up for a battle ... but will stay open to discussions," he said. The bills must go through the House Commerce and Labor Committee, chaired by Del. Terry Kilgore (R-l) and Saslaw's Senate committee. The legislative session ends March 13. "We're asking for the bills, as introduced, to be defeated or carried over for future discussion."


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