RICHMOND, Va.–The Virginia State Corporation Commission has ruled against Virginia Credit Union, saying it cannot expand its membership to the Medical Society of Virginia.
The ruling is the latest move resolving a three-year battle between Virginia Credit Union and the Virginia Bankers Association and several community banks in the state.
“We are disappointed by the decision. We believe that extending membership eligibility as an option for members of the society was reasonable,” Virginia Credit Union said in a statement.
Under state law, VACU has the option to appeal the decision to the Virginia Supreme Court, but spokesperson Glenn Birch told Virginia Business that the credit union has not decided whether it plans to appeal.
As Virginia Business reported and as CUToday.info has reported earlier, the dispute started in August 2019 when seven small community banks appealed to the SCC in protest after the state Bureau of Financial Institutions in July 2019 approved VACU’s request to offer membership to the medical society’s 10,000 members.
‘Too Great an Advantage’
“The banks contended that with 10,000 more members, VACU would have too great an advantage over community banks, which operate under different rules than nonprofit credit unions and could potentially lose tax revenue,” Virginia Business stated. “In March, the banks summed up their case, declaring that ‘credit unions have a sweet deal,” with “no [federal or state] income taxes … and no obligations to invest in the community.’ Credit unions are, however, responsible for paying real estate and personal property taxes.”
Ultimately, Virginia Business stated, those arguments meant less the ruling by SCC Commissioners Jehmal T. Hudson and Judith Williams Jagdmann, who found that VACU “did not meet the required burden of proof that the medical society was unlikely to be able to form its own credit union — which is preferable under state law, as opposed to allowing a large organization’s members to join an existing credit union.”
The society has more than $3.52 million in securities and more than $1 million in equity in its building that could help fund a new MSV credit union, according to research by economic analyst Christine Chmura on behalf of the banks and reported by Virginia Business.
The publication added that the society’s CEO, Melina Davis, is a member of the credit union’s board and “could provide valuable expertise” to an MSV credit union, according to the ruling, citing Chmura’s report.
Will Continue to ‘Zealously Fight’
Virginia Credit Union League President and CEO Carrie Hunt told Virginia Business, “It remains disappointing and frustrating that the bankers continue to thwart credit unions from providing provident credit to Virginians. The reality is, credit unions are not in competition with community banks. Large banks are. The Virginia Credit Union League will continue to zealously fight for the interests for all credit unions in Virginia to do what they do best — provide the best in consumer financial services to citizens in the commonwealth.”
The $5-billion Virginia Credit Union has more than 300,000 members.
The Very Best in CU Reporting. For You. For Free. Or Your Money Back.
Don’t forget to check your Spam/Junk email folder if you haven’t been receiving your free, popular and daily CUToday.info news headlines.
And if you haven’t yet signed up for the new email solution on which CUToday.info has partnered with ResponseGenius, you can do so here. Signing up requires less than one minute of your time.
CUToday.info has received very positive response from readers following the move to an improved provider of the daily headlines, but many also noted they did need to go to their Spam/Junk folder and mark it as safe.
The new email solution has not only improved every reader’s delivery experience, but it also features a fresh, new format that is easy to read, especially on mobile devices.