After months of contentious campaigning, the final votes of Virginia’s 2023 elections have been tallied. From a partisan perspective, the state legislature’s composition shifted only marginally in actual numbers, though significantly in impact. Democrats lost one seat in the state Senate but maintained their majority with a 21 to 19 advantage over the GOP. In the House of Delegates, Republicans seeded their slimly-held control to Democrats, who won 51 of the chamber’s 100 seats. With legislative control now held in Democratic hands in both chambers, Republican Governor Glenn Youngkin will have his hands – including his veto pen – full.

From an individual perspective, the legislature’s composition has changed momentously. A combination of retirements of senior members, incumbency-blind redistricting leading to primary losses and open seats, and hyper-competitive elections in battleground districts caused nearly 35% turnover of members between both chambers. With that turnover absconds some 600 years of cumulative experience in the General Assembly, including both Senate caucus leaders and senior appropriators from both chambers. Senate Democrats elected Fairfax-based Scott Surovell as their Majority Leader and in the House, Delegate Don Scott of Portsmouth will make history as the first Black person to serve as Speaker.

Members old and new will move into offices in the recently completed General Assembly Building on the northwestern end of Capitol Square, relegating the cramped yellow halls and undersized committee rooms of the Pocahontas Building to the annals of history. Facing the freshly minted legislature in January is the biannual “long” 60-day session, where they will take up legislation, judicial appointments, and Virginia’s two-year spending bill.

Since judicial appointments bypass the Governor’s desk, after two years of failed partisan horse-trading, the two unfilled seats of the triumvirate of judges overseeing the State Corporation Commission will be filled by Democratic-chosen appointees. These commissioners oversee the state banking regulator, the Bureau of Financial Institutions. The VBA plans to work with Democratic leadership to support industry-friendly picks to maintain a well-regulated, rational approach to issues such as the scope of membership for credit unions.

Notably, the VBA expects this year’s legislature to see proactive and aggressive attempts by the Virginia Credit Union League to continue the unfettered expansion of its membership and scope of business in Virginia. With a plethora of new members unfamiliar with the history of credit unions and their tax-exempt status, the VBA will be working hard to educate and create new allies in the legislature to block these proposals.

Staff from both bodies’ money committees, as well as the Governor’s Advisory Council on Revenue Estimates, have publicly noted that Virginia’s revenue forecasts and obligations will not allow for much expanded spending this biennium. The Governor will submit his budget plan in late December, setting up a clash of priorities with the new Democratic legislative leadership.

Broadly, the new majorities will no doubt be emboldened to move aggressively on long-standing priorities, meaning inevitably, the business community writ-large will face challenges in the legislature. With many proven moderating voices on both sides of the aisle not returning this year, it will be paramount to build new business-friendly coalitions in the narrowly divided chambers to ensure Virginia’s pro-business, and pro-banking environment remains sound.

We encourage you to stay engaged with grassroots advocacy by signing up to contact your legislators over important votes and by joining us for VBA Banker Day on January 11 and at the VBA/ABA Washington Summit in March. Ensuring the unified voice of the Virginia banking industry is heard by policymakers in both Richmond and Washington will be instrumental to our success.