LEGISLATIVE UPDATE April 6, 2001 VOLUME 8
· PRIVACY LEGISLATION, LD 1640, NEEDS BANKER CALLS!
· LD 585, TELEMARKETING LEGISLATION, WILL HAVE FINAL UTILITIES COMMITTEE REVIEW ON TUESDAY
· REVIEW OF OTHER BANKING-RELATED LDS
· HEARINGS HELD ON LD 1222, DIGITALIZED SIGNATURE
· LD 1573,UNIFORM PRINCIPAL & INCOME ACT HEARING ON MONDAY
· UPDATE ON BANKERS DAY AT THE LEGISLATURE
· TWO IMPORTANT FEDERAL BANKING LEGISLATIVE ISSUES!
LD 1640, PRIVACY PROPOSAL, NEEDS BANKERS CALLS!
ON Wednesday, April 4th the Banking & Insurance Committee worked LD 1640, AN ACT to Conform the State’s Financial Services Privacy Laws with Federal Law. The Maine Bankers Association, the Maine Association of Community Banks and the Maine Credit Union League all supported the Department’s proposal as amended by our industry Amendment. However, at the work session, two committee members sided with the Maine Civil Liberties Union and the Maine Trial Lawyers Association and supported privacy legislation that would create an Opt-in standard in Maine and not provide protection from private rights of action for violations of any new privacy regulatory standards. As the discussion continues, more legislators sided with the MCLU/MTLA. House Committee Chair Chris O’Neil requested that the interested parties meet and come back to the committee on Wednesday, April 11th for another work session.
At its Legislative Committee meeting on Thursday, April 5th, Maine Bankers Association refined its position on privacy that:
· We would not accept and support any LD that includes an Opt-in provision;
· Any privacy legislation must have some protection against private rights of action for the new regulatory requirements;
· If these two issues are not satisfactory to the industry, we are better to not have any bill.
NOT ONE STATE that has considered an Opt-in has passed it. Only two states that had Opt-in statutes are expected to repeal them and move to an Opt-out standard. The Maine Bankers Association continues to work with the department and the Bureau of Banking to develop language that the Banking & Insurance Committee will support and meets the above banking industry needs. We are confident that supporters of the MCLU position could not pass Opt-in legislation over the objections of the Department and our Association. But, in order to pass a “good” bill, we will need calls and letter from bankers urging Legislators to support LD 1640 as Amended. This issue will be one of two key issues for bankers to discuss with Legislators on Bankers Day!
LD 585, MAINE BANKERS TELEMARKETING PROPOSAL
The Utilities Committee voted 11- 0 Ought-to-Pass on LD 585, AN ACT to Remove Telemarketers from the Application of the Consumer Solicitation Sales Act. This strong committee support for LD 585 will be tested when we have to bring the LD back to the committee to address language changes needed to be consistent with definitions of financial institutions and their affiliates found in the Banking Code. The Utilities Committee will review the new language on Tuesday, April 10th in the afternoon – the afternoon of Bankers Day at the Legislature!
As reported last week, AARP is working hard to oppose this legislation and they have talked with many legislators and Utilities Committee members urging them to oppose LD 585. AARP claims that the protections offered consumers in the Consumer Solicitation Sales Act are found in up to 17 other state laws. However, MBA’s research shows that no other state would require a telemarketing sale by a financial institution to have a contract in writing! MBA continues to develop its research to refute the claims of AARP, and we are confident that we will continue to receive strong support from the Utilities Committee and our sponsors. LD 585 will be the other key issue for bankers to discuss on Bankers Day!
UPDATE ON OTHER BANKING-RELATED LDS
The following is a very brief update on the status of previously reported LDs in this update:
LD 10, AN ACT to Require Credit Card Issuers to Provide Greater Notice of Changes in Terms, was defeated by a 125 – 18 vote in the House and is dead for the session. (MBA Opposed)
LD 57, AN ACT to Require Certain Employees be Paid on a Weekly Basis is being held by the Labor Committee after a 7-6 Ought-not-to-Pass report. Supporters of the bill credited the banking industry with defeating their position last session! This LD will be held for full debate later in the session and MBA will continue to lobby against it!
LD 142, AN ACT to Ensure that Persons Issuing Bad Checks are Solely Responsible for Overdraft Charges was voted unanimously Ought-not-to-Pass by the Banking & Insurance Committee, and this report was accepted by the full legislature. It is dead for the session. (MBA opposed as written)
LD 153, AN ACT to Reduce Finance Charges on Consumer Loans, was defeated in the House and is dead for the session. (MBA opposed)
LD 203 (Medical Savings Accounts) and LD 334 (Provide Incentives to Families Who Save for College) were reported out Ought-to-Pass by the Taxation Committee. However, because both have need for funding and are before the Appropriations Committee, and with the budget situation as it is, it is unlikely they will pass this session. (MBA supported because they encourage savings!)
LD 256, AN ACT to Limit the Interest Rate Charged on Debt to 29% was voted unanimously Ought-not-to-Pass by the Banking & Insurance Committee, and is dead for the session. (MBA opposed)
LD 270, Create a Resource in State Government to Protect Privacy of Information
LD 299, Implement the Blue Ribbon Commission to Establish a Comprehensive Internet Plan
LD 849, AN ACT Regarding Social Security Numbers for Identification Purposes
LD 872, Resolve, to Create the Commission to Study Privacy Laws
These LDs have been wrapped into the latter, LD 872 – a proposal to Create a Commission to Study Privacy Laws. There was little support for a separate privacy office and virtually no support to eliminate use of social security numbers as a means of identification, but the issues will be made part of the work of the Commission to Study Privacy Laws. This commission will have a representative from the financial industries – either banking or insurance. Maine Bankers Association will participate in any meetings of this commission.
LD 375, AN ACT to Ensure Parity in the Sale of Securities by Maine Financial Institutions, introduced by the industry, was passed unanimously by the Banking & Insurance Committee and has passed the House and Senate. It will be signed by the Governor into law. (MBA Bill – Support!)
LD 429, AN ACT to Change the Name of the Bureau of Banking in Order to Accurately Reflect the Scope and Variety of Entities Regulated by the Bureau has been passed by the legislature. The Bureau of Banking will become the Bureau of Financial Institutions. (MBA supported)
LD 577, AN ACT to Create Equitable Taxation of Leased Property was voted 11-1 Ought-not-to-Pass by the Taxation Committee. This was a proposal from Maine Bankers and a group of private leasing companies that would have eliminated a tax exemption for subsidiaries of the Farm Credit System. The Maine Farm Bureau, the Maine Forest Products Council, Farm Credit, CO-Bank, several individual farmers, some fisheries representatives and other opposed the bill. Although it has been defeated by the committee, the proposal does have a positive fiscal note of over $1 million per year, and with the current budget situation they might “resurrect” this proposal at a later date! (MBA Bill – support)
LD 593, AN ACT to Establish the Office of Securities Within the Department of Professional and Financial Regulation, proposed by the Office of Securities, was supported unanimously by the Banking & Insurance Committee and will be passed by the full legislature. One amendment to this bill will have the director of this office as well as the Director of the Office of Consumer Credit Regulation, appointed directly by Commissioner Longley without legislative approval. (MBA supported)
LD 629, AN ACT to Allow Mortgagors to Select a Land Title Company to Perform the Title Search was defeated by the Judiciary Committee by a 12 – 1 vote. The one vote was from the sponsor, who is not expected to debate the bill on the Floor of the House. (MBA opposed)
LD 1080, AN ACT to Amend Article 9-A of the Uniform Commercial Code was introduced by the Secretary of State’s Office to adopt several minor amendments to new Article 9. While there was surprise opposition to parts of the new Art. 9 by the County Registrar’s Association, their concerns were addressed after meetings with them and the Judiciary Committee voted unanimously to support this LD. MBA supported – THESE AND OTHER CHANGES TO ARTICLE 9 WILL BE COVERED IN A SEMINAR ON THURSDAY APRIL 26TH AT THE AUGUSTA CIVIC CENTER! CALL MBA FOR REGISTRATION INFORMATION!
LDS 1630 AND 1730 – Both affecting how banks offer and/or administer sales of insurance and both were introduced by the Superintendent of Insurance, have sections that negatively impact bank sale of credit insurance or how groups sponsoring insurance plans receive administration fees. At this time, the Bureau of Insurance seems willing to amend the proposals so as to allow current practices to continue, and if so MBA will support.
LD 1729, AN ACT to Amend the Banking Code, and LD 1736, AN ACT to Amend Maine Credit Laws, are Housekeeping proposals from the Bureau of Banking and the Office of Consumer Credit Regulation. While generally supportive of these bills, the Association is researching how an amendment to LD 1736 affects the industry. LD 1729 includes an amendment requested by Maine Bankers Association. The work sessions on these LDs will be held April 9th.
JUDICIARY COMMITTEE HOLDS HEARING ON LD 1222, DIGITALIZED SIGNATURES
The Judiciary Committee held the Public Hearing on LD 1222, AN ACT Conforming Maine Digital Signature Law to Federal Law on Wednesday, April 4th. This proposal was introduced for Maine Bankers Association to repeal certain non-uniform provisions to UETA that would be pre-empted by E-Sign, federal law that passed late last summer. There were no opponents to this proposal, and the work session is next week.
HEARING FOR LD 1573, AN ACT to Enact the Uniform Prinicipal and Income Act of 1997
The Judiciary Committee will hold the public hearing on LD 1573, AN ACT to Enact the Uniform Principal and Income Act of 1997 on Monday, April 9th. This important proposal would adopt the new version of the Uniform Act (UPIA) into Maine law and is supported by Maine Bankers Association. MBA’s Trust Committee members met with representatives from the Maine Bar Association’s Trust and Estate subsection and have recommended strong support for this bill. The proposal should benefit trust officers and trust beneficiaries by allowing greater flexibility for the trust officer. Fifteen states have adopted this Uniform Act, and about that many more should adopt it this year.
BANKERS DAY AT THE LEGSILATURE
You probably all know that Tuesday, April 10th is Bankers Day at the Legislature. More than 130 bankers are signed up and will shadow legislators. This event could not be happening at a better time! LD 585, the Telemarketing proposal, will have its final work session that afternoon and bankers should re-inforce that this legislation is necessary to make Maine law conform with the federal telemarketing laws and the laws in the other 49 states!
Also, LD 1640, the privacy legislation, will be heard the next day and bankers need to urge all legislators that they should support the department’s and industry’s proposal.
These are the two biggest priorities remaining for the industry - and the Bankers Day is a perfect opportunity to get our message out!
FEDERAL BANKING ISSUES:
HOUSE PASSES INTEREST ON CORPORATE CHECKING PROPOSAL
The full House passed H. R. 974, the Small Business Interest Checking Act of 2001, by voice vote. HR 974 immediately provides for 24 transaction internal sweep accounts, more Federal Reserve flexibility on setting reserve requirements, the payment of interest on sterile reserves and a repeal of the prohibition on payment of interest on corporate checking accounts two years from the date of enactment.
SENATE VOTES TO STRIKE BANK EXAM FEES! SENATOR COLLINS CO-SPONSORS THIS AMENDMENT!
The Senate is expected to complete action on H. Con. Res. 83, the 2002 Budget Resolution, on Friday afternoon. In action taken this morning, the Senate adopted the Enzi-Carper amendment to strike bank exam fees from the resolution. Maine Senator Susan Collins co-sponsored this amendment! Yesterday ABA, America’s Community Banks, CSBS, ICBA and the Financial Services Roundtable sent a joint letter to all senators in support of the Enzi-Carper amendment which strikes state bank exam fees from the budget resolution.
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