Virginia CUs, ABA's Leggett File Comments on Virginia DFI FOM Proposal

RICHMOND, Va. – Considering there are about 70 credit unions in the state, the seven comments from credit unions that were filed with the Virginia State Corporation Commission in support of the agency’s proposal to allow state-chartered credit unions to adopt underserved areas as part of their field-of-membership, may seem like a drop in the bucket. But Commissioner Joe Face said his office typically doesn’t receive many comments on proposed regulations. So relatively speaking the seven comments his office received on this proposed regulation are a lot, he said. The deadline for filing comments was Jan. 9. “We probably don’t usually receive a lot of comments because we do a lot of work internally before we propose a regulation and try to get it right before a regulation is even proposed,” said Face. Still, Face added, he assumed considering the importance of the proposed regulation, that the SCC, which oversees the Bureau of Financial Institutions, would have received more comments from CUs. Face crafted the proposed regulation last November in response to requests he received from the Virginia Credit Union League on behalf of state-chartered credit unions. The League’s position is that the proposal is a parity issue and an opportunity for CUs to reach residents in underserved areas. Several comments filed by credit unions alluded to the issue of having parity between state and federal charters. Among the comments received by Face’s office in support of the proposed regulation were those from the Virginia Credit Union League, Navy FCU, Beacon CU, Virginia CU, Newport News Shipbuilding ECU, Old Dominion University CU, and Tidewater Telephone ECU. In addition to comments filed in support of the proposed regulation, comments in opposition came from American Banker Association economist Keith Leggett. Face said Leggett’s letter only mentioned his name and did not identify him as being with the ABA. “We had our attorneys trying to figure out who this guy was,” said Face. Leggett, who is a resident of Virginia, focused his comments on his argument that, “I believe that this expansion of the field-of-membership carries with it an expansion of the credit union tax subsidy paid for by all Virginian taxpayers.” He went on to say that if the proposed regulation is approved, “the Commonwealth should define an underserved area more narrowly than NCUA. Therefore, the Commission should affirm that `local’ is meant to be a limiting factor and in doing so modify the proposed rule to comport with a narrower use of this term.” Responding to Leggett’s comments, Virginia Credit Union League President/CEO Rick Pillow said, “Despite our tremendous efforts, bankers like to bash us for not doing more in serving underserved areas, the very neighborhoods and communities that they long ago abandoned. But when we look for regulatory permission to do just that, we have to suffer even more cheap shots.” -