January 10, 2003
Legislative Update #1
§ LEGISLATIVE LEADERSHIP ELECTED, DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGULATION COMMISSIONER CHOICE NAMED, AND BANKING AND INSURANCE COMMITTEE ASSIGNMENTS FINALIZED
§ MAINE BANKERS ASSOCIATION INTRODUCES TWO LEGISLATIVE PROPOSALS
§ OTHER BANKING AND BUSINESS RELATED ISSUES
Welcome to the Maine Bankers Association’s first Legislative Update for the First Regular Session of the 121st Maine Legislature. Most of you have received these publications in years past, but for any new readers, and as a refresher for others, Maine Bankers Association will publish these Updates weekly or bi-weekly throughout this Legislative Session. In the Legislative Update, we will outline the progress of major banking and business-related bills, and at times ask Contact Bankers, Legislative Committee Members, and our Directors and CEOs to discuss important bills with their local legislators. Specific lobbying requests may be sent as Legislative Alerts – Action Needed! As in prior years, at any time if you have questions about legislation, please call either Joe Pietroski or Mark Walker the MBA office at 622-6131.
ELECTED AS Legislative Leaders by their party caucuses are:
Senate President: Bev Daggett (D-Augusta)
Senate Majority Leader: Sharon Treat (D-Gardiner)
Senate Majority Whip: Ken Gagnon (D-Waterville)
Senate Republican Leader: Paul Davis (R-Sangerville)
Senate Assistant Republican Leader: Chandler Woodcock (R-Farmington)
Speaker of the House: Pat Colwell (D-Gardiner)
House Majority Leader: John Richardson (D-Brunswick)
House Majority Whip: Robert Duplessie (D-Westbrook)
House Republican Leader: Joe Bruno (R-Raymond)
House Assistant Republican Leader: David Bowles (R-Sanford)
Governor Baldacci names Bangor Attorney Robert “Buddy” Murray as Commissioner of the Department of Professional and Financial Regulation
Murray is a former state representative and state senator who served on the Banking and Insurance Committee and who chaired the Business and Economic Development Committee. In his law practice at Rudman and Winchell, he specialized in business and financial issues. As DPFR Commissioner, he will be the Governor’s point person on workers comp, health care, banking, consumer credit, and securities issues.
Legislative Leadership names Banking & Insurance Committee
Senator Lloyd LaFountain and Rep. Chris O’Neil have been reappointed as co-Chairs of the Banking & Insurance Committee. Their continued service as Chairs will be helpful with so many new legislators. Rep. O’Neil has agreed to introduce one of the Maine Bankers Association’s legislative proposals that will go before that Committee. Senator Art Mayo also continues to serve on the B&I Committee. Mayo, a former state representative was elected to the Maine Senate in November. Mayo is a Director of Bath Savings Institution.
Rep. Joe Perry and Rep. Lois Snowe Mello are returning to the committee this year after serving on other committees in the last session. Rep. Richard Woodbury, the independent candidate elected from Yarmouth will be one of the new members of the committee.
The B&I Committee members are:
Senator Lloyd LaFountain, Chair (D-Biddeford)*
Rep. Chris O’Neil, Chair (D-Saco)
Senator Neria Douglass (D-Androscoggin)*
Rep. Marilyn Canavan (D-Waterville)*
Senator Art Mayo (R-Bath)*
Rep. Joe Perry (D-Bangor)
Rep. Bonita Breault (D-Buxton)**
Rep. Anne Perry (D-Calais)**
Rep. Kevin Glynn (R-S. Portland)*
Rep. Florence Young (R-Limestone)*
Rep. Lois Snowe-Mello (R-Poland)
Rep. Michael Vaughan (R-Durham)**
Rep. Richard Woodbury (Ind – Yarmouth)**
* Returning Legislators
**Freshmen Legislators
MAINE BANKERS ASSOCIATION INTRODUCES TWO LEGISLATIVE PROPOSALS
AN ACT to Clarify and Improve Fairness of the Law of Trustee Process has been submitted at our request by Rep. Bill Norbert. Norbert has been named the House Chair of the Judiciary Committee. This proposal would eliminate several critical problems with the current laws concerning trustee process, and how trustees are served under Maine law. Current law has resulted in critical risks to Maine banks.
AN ACT Clarifying the Maine Consumer Credit Code is a technical change to the Code that makes Maine law consistent with federal law regarding late charges. This proposal should be assigned to the Banking & Insurance Committee and was sponsored for Maine Bankers by House Chair Chris O’Neil.
OTHER BANKING-RELATED ISSUES EXPECTED IN 2003
a) Predatory Lending proposals: At least one bill has been filed, and probably several others will be, amending Maine law on high rate lending. The New England Finance Services Association, which represents finance companies doing business in New England, is being pro-active and has introduced a predatory lending bill that they can support. One very positive section of this proposal is to create a state-pre-emption over municipal ordinances. It is expected that AARP or other consumer groups have introduced consumer-sponsored predatory lending legislation. The Maine Bankers Association’s Board of Directors has met with Office of Consumer Credit Regulation Director Will Lund about this issue. Lund affirmed that Maine law has significant consumer protections and does not need to be radically changed.
b) Repeal of the 3% interest requirement on certain mortgage escrow accounts. This proposal has been discussed for several years, and will be introduced by the Credit Union League. With interest rates at historic lows, the statutory 3% rate is considered to be unreasonable.
c) Late fees on consumer loans. Current Maine law prohibits some types of late fees on consumer loans, and the Credit Union League is expected to propose amendments that would allow additional late fees on certain consumer loans.
d) Automobile Certificate of Title Issues. Several parties, including the Maine Auto Dealers, are expected to introduce legislation that impacts the title certification process. There are continued complaints about discharges, mailing titles in a timely fashion and other title practices.
e) Requiring Titles for Snowmobiles, ATVs, and Recreational Vehicles. A number of parties believe that titles are needed for these vehicles in order to properly use the value of them as collateral for loans.
BUSINESS RELATED ISSUES EXPECTED DURING 2003
Balancing the budget, tax reform and health care issues will take much time before the Maine Legislature this Session. Many of these proposals will require action from Maine Bankers Association, including:
Tax Reform issues that may require MBA involvement:
1) Expanding the sales tax to business services;
2) Eliminating financial service firms from being eligible for the BETR program;
3) Other changes to BETR;
4) Non-conformity of the Maine Tax Code to the federal code;
5) Estate tax issues, resulting from the federal government phase out and eventual elimination of the estate tax;
6) Creating a gross-receipts tax, which could bring in taxes on services
Health Care initiatives will include proposals from employer groups that could assist in reducing the increase in health care costs. Also, consumer groups will introduce a single payer proposal; insurance agents will introduce creation of a High Risk pool that would gain federal funds for start-up; the new Governor has indicated support for creating a mutual health insurance company like MEMIC; and doctors, hospitals, and insurance companies may have their own initiatives!
Paid Family Medical Leave will be proposed by a Study Commission that has concluded paid family medical leave is essential for working women and low income families. The Commission’s Majority Report proposes to pay for this benefit by creating a new payroll tax, unless an employer pays this benefit directly to their employees. The Minority Report, authored by Peter Gore of the State Chamber, says that employers cannot afford this additional cost.
