Banking Legislation Update
2024 General Assembly Session
SB174 (Favola) Preventing Elder Financial Abuse:
Building on the recent authority provided to banks to assist in preventing financial abuse, VBA is advancing legislation allowing an elderly or vulnerable adult account holder to name a trusted contact who could be contacted if the bank has a reasonable belief that the customer may be being exploited. This approach mirrors a rule adopted by FINRA in 2018 and adopted in several states. This legislation passed the Senate by a vote of 38-0. The House amended the bill to match the language in HB 692 and passed it unanimously.
HB692 (Maldonado) Elder Financial Abuse Training:
Mirrors Federal Senior Safe Act language that allows banks to train employees on signs of elder financial exploitation and adds language allowing bankers to notify a trusted contact of suspected financial abuse. The VBA worked with Delegate Maldonado to modify this legislation from mandating training and reporting to its current, optional form, while preserving important liability protections for bank employees. The bill passed the House and Senate unanimously.
These similar bills allow for the termination of a trust, and the release of a trustee from a trust and liability if they give appropriate notice to the beneficiaries and other relevant parties without interacting with the court system. All of these bills have passed through the process unanimously and will head to the Governor for his action in the coming days.
HB1205 (Lopez) Credit Union Expansion:
This would have allowed Virginia-based credit unions to hold state and local tax dollars in the form of public deposits, despite credit unions themselves not paying any corporate income tax or equivalent to the Bank Franchise Tax. The VBA was successful in defeating this legislation by a vote of 13-9 in the House Labor and Commerce Committee.
HB952 (Lopez) Residential PACE Loans:
This legislation would have allowed for residential property assessed clean energy loans in Virginia. The VBA has long opposed the imposition of these often predatory loans, which would be senior to mortgages and other liens and make it impossible to insure mortgages on the secondary market. The VBA was successful in having the legislation “carried over” to next year, defeating the bill for this session.
SB360 (VanValkenburg) Ban on Non-Compete Agreements:
Would have made Virginia only the sixth state in the nation to ban the use of all non-compete clauses in employment contracts, limiting businesses’ ability to retain and invest in top level talent, protect their trade secrets, and make Virginia’s business climate less competitive. The VBA was successful in defeating this legislation on the Senate floor by a vote of 28-11.
Would allow for state-level class action lawsuits in Virginia, in which an indeterminant number of unidentified aggrieved parties can bring a joint lawsuit against a company. Under current law, such lawsuits are only permitted when six or more identified plaintiffs have filed substantively similar claims. The VBA opposes this legislation due to its impact on Virginia’s business climate. As the bills have passed both chambers, we and other business interests will ask the Governor to veto this legislation.
Provides an additional $5 million per year for the Community Financial Institutions Fund, which directly supports Virginia-based CDFIs and builds their capacity to support communities and businesses across the state. The Senate budget included $4 million in the first year of the biennium for the CDFI fund.
Provides $546,000 to the Department of Taxation for the completion of a secure online portal to allow banks to file their bank franchise taxes electronically. Both the House and Senate budget included this funding.