A Tale of Two Bills

This past Monday was the deadline for Governor Glenn Youngkin to act upon the 1,046 pieces of legislation passed by the Virginia General Assembly during their 2024 session. In total, Governor Youngkin signed 777 bills into law, suggested amendments to 116 bills, and vetoed a record 153 bills. While many of the bills may impact credit unions as employers and businesses in the Commonwealth, we wanted to highlight two that have direct impacts on Virginia’s credit unions in their capacity as financial institutions. Both of these consequential bills took remarkably different paths to their final version as law.

HB 692 Financial institutions; reporting financial exploitation of elderly or vulnerable adults, patroned by Delegate Michelle Maldonado (D-20), permits financial institutions to allow elderly or vulnerable adults to list trusted persons on their accounts whom financial institution staff may contact in the case of suspected financial exploitation. VACUL staff met with the Delegate last summer to discuss the issue and the challenges of protecting the elderly from financial exploitation while not imposing overly burdensome mandates upon credit unions. We discussed examples of legislation passed by other states and suggestions on what actions and requirements credit unions would be willing to support.

When session started in January and the bill was introduced, the initial bill language was very burdensome for credit unions, introducing additional compliance and reporting regulations that we were not comfortable with, including mandatory reporting of suspected financial exploitation to law enforcement. VACUL continued to work with the patron and the Virginia Bankers Association to amend portions of the legislation we had concerns about and ended up with a bill that provides additional financial exploitation protections and resources to elderly Virginians while not being overly burdensome to credit unions. League staff testified in support of the amended legislation in both the Virginia House and Senate.

This bill passed the House and Senate unanimously and was signed into law by Governor Youngkin, effective July 1, 2024.

HB 184 Foreclosure procedures; subordinate mortgage, affidavit required patroned by Delegate Marcus Simon (D-13), places additional documentation requirements on lienholders when a foreclosure sale is initiated due to a default in payment of a subordinate security instrument. The initial version of the legislation would not have been overly burdensome to credit unions, only requiring one additional step during the infrequent foreclosure sale from a secondary lien position. VACUL staff met with the patron’s office, discussed the intent of the legislation, and proposed exemptions that would cover most credit unions. While understanding our concerns, the Delegate was initially unwilling to amend the legislation to include our proposed exemption.

The bill in its original form passed the House of Delegates. Still, while being heard by the Senate, amendments were made including additional requirements which we believed would be overly burdensome for some of Virginia’s credit unions. With the additional requirements attached, the bill’s main proponent in the Senate became willing to exempt credit unions and original lienholders from the legislation’s requirements. During the last two days of session, the Division of Legislative Services (DLS) amended the bill with their own language rather than what was offered by VACUL. In the rush to pass the legislation, the bill passed only exempting state-chartered credit unions.

After the 11th-hour amendment, VACUL staff engaged with the Governor’s office explaining the situation and asking him to amend the bill to exempt both state and federally chartered credit unions. Governor Youngkin, who the League has supported and built a good working relationship with, submitted the proposed amendment as requested. On April 17th, the Virginia General Assembly will reconvene to review and act upon the Governor’s bill amendments and vetoes.

While these two pieces of legislation took very different paths, they have some similarities. Recognizing both bills would have a direct impact on Virginia’s state and federally chartered credit unions, VACUL staff worked tirelessly to leverage their relationships with stakeholders in the legislative process to deliver positive outcomes resulting in a much more favorable outcome for credit unions.