League, Credit Unions Push Secondary Capital, 'Parity Powers' Bills in General Assembly

The Scarves are Out ...

Yesterday was the first day of the 2022 General Assembly Session in Virginia, and I finally got to wear my credit union scarf for the first time! I have been eyeing it here in my office since I started in July.

We have two bills that were introduced this session – companion bills HB268 and SB326 will fix the Virginia statute so that the NCUA’s Subordinated Debt Rule will not be in conflict with the Virginia Code.

Companion bills HB209 and SB329 will make the process easier for state-chartered credit unions to exercise the same powers as federally chartered credit unions. Currently, state-chartered credit unions must seek permission to do this; we are asking that be changed to a notice requirement.

For those of you with national fields-of-membership, we are working with AACUL and other Leagues to flag any concerning issues at the state level.

The Gloves are Off ...
The Subordinated Debt measure is non-controversial. The parity bill will be opposed by the banks unless they receive the same treatment. We have spoken with them about this bill and will see how strong their opposition is. As expected, the Bureau of Financial Institutions is neutral on both provisions, which is as far as they ever go regarding legislation of this kind. 

I will note that we also have a bill sponsor lined up to introduce legislation to allow all credit unions to add underserved areas to their fields-of-membership should that pass at the federal level. Given the timing of a new Congress, passage is unlikely, but it’s important to be proactive.

And the Masks are On:
We have Credit Union Day planned for Thursday, Jan. 27, 2022, but due to Omicron it will be a bit scaled-back and a different affair than in years past. We will send out a separate invitation with an agenda and a RSVP for that event. In addition, we are planning in-District legislative events throughout the year.

Gov.-elect Youngkin gets sworn in on Saturday. As I previously mentioned, I had the opportunity to meet him several weeks ago. Given his lack of government experience, his administration will look very different than previous administrations.

In short, we will have to wait and see what to expect this session - but we have already hit the ground running. We hosted fundraisers at Credit Union House this week, and had the opportunity to engage with members, including the newly elected House Speaker Todd Gilbert. Yesterday morning -- before the members were sworn in -- CeJae and I went around and met with some longstanding supporters and all 17 of the new members in the House. We have created a talker to show the credit union difference in Virginia.

Hunton Andrews Kurth, our outside lobbyists put together the information below on this year’s session.  I think it is a great overview.

As the 2022 General Assembly prepares to convene tomorrow and a new governor, lieutenant governor, and attorney general prepare to be sworn in on Saturday, an unprecedented level of uncertainty will cast a long shadow over the proceedings of the 60-day regular session.

Virginia Democrats enjoyed two years of control over the House of Delegates, Senate, and Governor’s mansion for the first time since 1993. As a result of November’s elections, Republicans recaptured control of the House, and for the first time in eight years, the governorship. The House and Senate must also deal with an unprecedented level of change to most of the 140 legislative districts due to the non-partisan redistricting process (the Virginia Supreme Court finalized the House, Senate, and Congressional districts a couple of weeks ago).  The substantive reshaping of Virginia’s state legislative districts has set the stage for intra- and inter-party contests between incumbents that could have a profound impact on longstanding political and personal friendships, as well as an adverse impact on party discipline. In addition, House members are still unsure as to whether the courts will require them to run for reelection in the newly drawn districts in 2022 or 2023.

Uncertainty will be the order of the day (or the next 60 days). The following are several factors to consider:

The Governor-elect Youngkin Effect:
For the first time in recent memory someone completely outside of the Commonwealth’s political establishment will serve as governor. The incoming governor will bring a new set of relationships and a much different understanding and perspective to governing. Youngkin’s transition and the development of his administration has been extremely slow (or deliberate depending on one’s perspective) when compared to past administrations.

Many of the cabinet secretaries and administrative staff that have been announced boast impressive resumes, but in most cases, lack Virginia-specific government or political experience. These individuals are unknown quantities to General Assembly members, as well as to the advocacy community.

Under the best of circumstances, the General Assembly session is a challenging sprint for those in the Executive Branch. With so many leaders in the Executive Branch unfamiliar with the personality, politics, and process that drive the legislative session, this is far from the best of circumstances. This situation may force the governor-elect and his administration to lean disproportionately on Speaker-designee Todd Gilbert (R-Shenandoah) and Senate Minority Leader Tommy Norment (R-James City) to help guide Youngkin’s ambitious legislative agenda.
 
The Redistricting Effect:
Contrary to historical practice in Virginia, partisanship and incumbency did not drive the latest redistricting process. While it can be argued such a situation may be in the best interest of good government, it is clear it is not in the best interest of political or operational predictability. The dramatic changes in these legislative districts are generating tension and nurturing mistrust as members ponder their political futures.
To understand the scope of the changes in the legislative districts, consider that of the 40 Senate districts, nine districts have more than one incumbent residing within the new boundaries.

This has impacted 20 members of the Senate (which is half the body), affecting 10 Democratic and 10 Republican senators. Eleven proposed Senate districts are open without incumbent representation. Some incumbents will likely retire (Senators Howell and Saslaw are among those expected to announce their retirements), while others may move in an effort to enhance their reelection prospects (Senator Deeds is one of the first members to indicate his intention of moving), and some appear to be on a collision course (Senators Lucas and Spruill appear to be gearing up for what will be a bruising nomination contest). Those who will be sharing a Senate district with their colleague(s) include:

• Senators Louise Lucas (D-Portsmouth) and Lionell Spruill (D-Chesapeake)
• Senators Bill DeSteph (R-Virginia Beach), Jen Kiggans (R-Virginia Beach), and Lynwood Lewis (D-Accomack)
• Senators Ryan McDougle (R-Hanover) and Tommy Norment (R-James City)
• Senators Amanda Chase (R-Chesterfield) and Ghazala Hashmi (D-Chesterfield)
• Senators Steve Newman (R-Bedford) and Mark Peake (R-Lynchburg)
• Senators John Edwards (D-Roanoke City) and David Suetterlein (R-Roanoke County)
• Senators Creigh Deeds (D-Bath), Emmett Hanger (R-Augusta), and Mark Obenshain (R-Rockingham)
• Senators Dick Saslaw (D-Fairfax) and Dave Marsden (D-Fairfax)
• Senators Janet Howell (D-Fairfax) and Jennifer Boysko (D-Fairfax)

• Delegates Dave LaRock (R-Loudoun) and Michael Webert (R-Fauquier)
• Delegates John Avoli (R-Staunton) and Ronnie Campbell (R-Rockbridge)
• Delegates Terry Austin (R-Botetourt) and Chris Head (R-Botetourt)
• Delegates Israel O’Quinn (R-Washington) and Will Wampler (R-Washington)
• Delegates Wren Williams (R-Patrick) and Marie March (R-Montgomery)
• Delegates James Edmunds (R-Halifax) and Danny Marshall (R-Danville)
• Delegates Buddy Fowler (R-Hanover) and Scott Wyatt (R-Hanover)
• Delegates Bobby Orrock (R-Spotsylvania) and Margaret Ransone (R-Westmoreland)
• Delegates Rob Bloxom (R-Accomack) and Tim Anderson (R-Virginia Beach)
• Delegates Lamont Bagby (D-Richmond City) and Schuyler VanValkenburg (D-Henrico)
• Delegates Kathleen Murphy (D-Fairfax) and Rip Sullivan (D-Fairfax)
• Delegates Dan Helmer (D-Fairfax) and David Bulova (D-Fairfax)
• Delegates Kaye Kory (D-Fairfax) and Marcus Simon (D-Fairfax)
• Delegates Eileen Filler-Corn (D-Fairfax) and Kathy Tran (D-Fairfax)
• Delegates Elizabeth Guzman (D-Prince William) and Luke Torian (D-Prince William)
• Delegates Don Scott (D-Portsmouth) and Nadarius Clark (D-Portsmouth)
• Delegates Dawn Adams (D-Richmond City), Jeff Bourne (D-Richmond City) and Betsy Carr (D-Richmond City)
• Delegates Jeion Ward (D-Hampton) and AC Cordoza (R-Hampton)
• Delegates Cliff Hayes (D-Chesapeake) and Jay Leftwich (R-Chesapeake)
• Delegates Glenn Davis (R-Virginia Beach), Barry Knight (R-Virginia Beach), and Kelly Convirs-Fowler (D-Virginia Beach)

At the moment, there are 11 state House districts where at least two Republican delegates reside. Six of these districts are located in Southside and Southwest Virginia, which only has three open seats. Across the aisle, there are seven House districts where at least two Democratic delegates reside. Five of these districts are located in Northern Virginia, which has eight open seats. In Hampton Roads, there are three scenarios where a Republican and Democrat have been drawn into the same district.

The potential for incumbent-vs-incumbent electoral strife will disrupt dynamics that have supported regional comity and will untether alliances that have historically nurtured consensus within party caucuses.

The COVID-19 Effect:
Speaker Gilbert has announced that the House of Delegates will meet in person during the 2022 General Assembly. The public will have access both to the Capitol and legislator’s offices in the Pocahontas Building. The Speaker also indicated that the public would have the option to offer testimony before committees or subcommittees in person or virtually. It is still unclear at this point how the Senate intends to operate (last session, the House operated virtually, while the Senate conducted floor sessions and committee work in person, but the public could only participate virtually).

The virulent quality of the Omicron variant is likely to have a substantial impact on the operations of both the House and the Senate. Both chambers are likely planning for a potential outbreak among members and staff which will require the leadership in the House and Senate to continuously reassess both their safety protocols and how each chamber can continue to operate in an in-person format. As last session illustrated, effective advocacy in a virtual environment can be incredibly challenging. It is worth noting that last session was only 45 days, with each chamber significantly limiting the number of bills that could be introduced.

The 2022 session will be 60 days with no bill limits on the House side and a 25-bill limit in the Senate.  In addition, the General Assembly will be considering a new biennial budget bill. The challenges associated with operating the House and Senate during a spiking pandemic are eclipsed only by the challenges associated with trying to effectively advocate in such an environment.

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On a final note, CUNA’s Governmental Affairs Conference is also fast approaching. Please keep an eye out for updates from us on GAC. We are having to alter what we normally do relative to COVID restrictions.  If you are attending GAC and would like us to set up a meeting with your member of Congress please reach out to CeJae as soon as possible to let us know as different offices have different meeting protocols.

Sincerely,
Carrie Hunt
President/CEO

P.S. How do you Credit Union? I would love to hear from you. Always feel free to shoot me a note or call.