CUs, League Celebrate After Governor Signs Parity Measures into Law
The Commonwealth’s credit unions are celebrating Gov. Glenn Youngkin’s signing of two parity measures for state-chartered credit unions, both of which are set to become law July 1.
“These parity measures represent our commitment to ensuring credit unions have the tools they need to serve their members,” said Virginia Credit Union League President/CEO Carrie Hunt. “We believe in a dual chartering system that encourages innovation and promotes regulatory flexibility. That begins, however, with ensuring the two charters remain on roughly equal footing in two key areas: member-facing services and market competitiveness.”
One measure (companion bills SB329 and HB209) will streamline the process by which state-chartered credit unions can offer specific services, activities or practices authorized for their federally chartered peers, lessening the risk of a state-chartered credit union finding itself at a competitive disadvantage as it relates to member-facing services. This measure does not provide any sort of authority related to the expansion or modification of the state-chartered credit union’s core charter.
The second measure (companion bills HB268 and SB326) provides a technical fix to the Virginia statute to ensure the National Credit Union Administration’s Subordinated Debt Rule does not conflict with state law. Recent regulatory rule changes expanded the number of credit unions able to raise capital outside of retained earnings through the issuance of subordinated debt.
Subordinated debt primarily aids credit unions in increasing regulatory capital levels, but it can also enhance liquidity and provide important balance sheet protections. It can also finance growth for the credit union, including the acquisition of new branches and new business ventures.
“Our credit unions – both state and federal charters – came together to win the passage and enactment of these two measures,” noted Hunt. “Through their lobbying efforts, emails and phone calls, we can celebrate an important step forward not only for state-chartered credit unions, but for all the Commonwealth’s credit unions.”
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