February 12, 2001

 LEGISLATIVE UPDATE                                         Volume 3- 2001 

• MBA’S LEGISLATIVE AGENDA – MBA BILLS PRINTED

• HEARINGS & WORK SESSIONS HELD

• OTHER BANKING-RELATED LDs

• PRIVACY ISSUES AND DEPARTMENT’S DRAFT LEGISLATION

• BANKERS DAY & NEXT LEGISLATIVE COMMITTEE MEETING

 

MBA’S LEGISLATIVE AGENDA – MBA BILLS NOW PRINTED!

 LDs are being printed fast and furious!  We are receiving more than 75 LDs each day, and at this time there are more than 650 in print.  MBA is monitoring 55 LDs at this time! These LDs include two that were introduced at the request of MBA, and one at the request of MACB.

 LD 375, AN ACT to Ensure Parity in the Sale of Securities by Maine Financial Institutions clarifies Maine law so that banks and security firms may use dual employees to sell securities.  MBA has worked with the Securities Division of the Bureau of Banking on bank sale of securities issues, and this proposal has been introduced in case the Securities Division does not publicize clear regulations concerning dual employees.  The vast majority of states allow shared employees. PUBLIC HEARING on Wed. Feb. 21 at 10:00 a.m. before Banking & Insurance!

 LD 577, AN ACT to Create Equitable Taxation of Leased Property removes the sales tax exemption for government-sponsored enterprises when they lease equipment.  Currently, Farm Credit does not have to pay a sales tax while other leasing companies including banks do pay the sales tax.  MBA and other leasing companies will work to pass LD 577 and level the playing field!

 LD 585, AN ACT to Remove Telemarketers from the Application of the Consumer Solicitation Sales Laws is MBA’s proposal to clarify state telemarketing laws.  The proposal has broad sponsor support and has been assigned to the Utilities Committee.  Last year, MBA and other groups discovered that the Consumer Solicitation Sales Act could apply to telemarketers, though the AG’s office had never enforced it in that manner.  This proposal removes telemarketers from the Act, so they will be governed solely by state and federal telemarketing laws.

 AN ACT to Conform Maine Digital Signature Law to Federal Law has yet to be printed, and is necessary because the Federal Law, E-Sign, was passed after Maine law and there are some inconsistent provisions.  Members of the Maine Bar support this proposal.

 PUBLIC HEARINGS & WORK SESSIONS HELD/SCHEDULED 

 LD 10, AN ACT To Require Credit Card Issuers to Provide Greater Notice of Changes in Terms proposes to require banks to give 90-day notice prior to changes in terms (current law is 30 days).   The public hearing was held Monday, January 29^th, and the first work session was held Monday, Feb. 5^th.  There will be another committee discussion about this bill on Monday the 12^th!  Although no group supported this proposal other than the legislator/sponsor, and the Bureau of Banking, Credit Union League, Finance Companies and both Bankers Association’s opposed it, the committee is split 5 –4 Ought Not to Pass with 4 committee members not present when they took the preliminary vote.  The proponents believe that this change not only will help consumers, but also give Maine banks a better opportunity to market their cards by giving consumers more notice.

 Both the Senate and House Chairs oppose the LD and support MBA’s position, so if it goes to the House Floor for debate we are confident our position will prevail.

 LD 157, AN ACT to Clarify Marketing Standards for Telephone Utilities…. Had its public hearing and work session this past week.  MBA has monitored this LD because it requests that the telephone utilities, like Verizon, not be governed by the Consumer Sales Solicitation Act and other state laws, but by PUC regulations.  The result is similar to our arguments on LD 585.

 On Monday, February 12^th, the Banking & Insurance Committee will hold Public Hearings on:

 LD 142, AN ACT to Ensure that Persons Issuing Bad Checks are Solely Responsible for Overdraft Charges.  This LD, with MBA’s guidance will be re-referred to the Criminal Justice Committee, and the LD will be re-written so that it strongly encourages district attorneys and law enforcement agencies to bring to court the writer of bad checks.

 LD 153, AN ACT to Reduce Finance Charges on Consumer Loans proposes to amend the Consumer Credit Code section that deals with step-rate loans.  MBA will oppose this proposal, though it has little impact to MBA members.

 LD 256, AN ACT to Limit the Interest Rate Charged on Debt to 29% will be opposed by the Office of Consumer Credit Protection as well as finance companies, MACB and MBA.   Our opposition will be based on general comments that the current scheme of interest rate regulation/deregulation is working fine.

 LD 300 – the Governor’s Budget for Fiscal Years ending 2002 and 2003.  MBA appeared at the public hearing on the section of the budget dealing with the BETR Program.  Bill Williamson, Senior Commercial Loan Officer from Fleet Bank of Maine testified both for Fleet and MBA that the administration and the legislature should fully fund BETR.  BETR has been successful in stimulating capital investment in Maine and warrants continued financial support.  There will be other LDs dealing with BETR both before Taxation and Appropriation, and any final decision will be delayed until these other hearings.  MBA MAY ASK FOR LETTERS TO KEY LEGISLATORS ON THIS ISSUE! LOOK FOR A LEGISLATIVE ALERT ASKING FOR CONTACTS SOON!

Also found in LD 300 is a proposal to expand the Real Estate Transfer Tax to stock mergers and acquisitions.  MBA opposed a similar proposal last session and will propose an amendment that removes some of the impact to financial institutions.

 OTHER BANKING-RELATED LDS

 LD 57, AN ACT to Require that Certain Employers be Paid on a Weekly Basis proposes to prohibit paying certain employees on a bi-weekly basis.  MBA vigorously opposed a similar proposal last session and will oppose this LD also.  It has not been scheduled for a hearing yet.

 LD 203, AN ACT to Establish Medical Savings Accounts proposes to create a tax credit for savings accounts dedicated to use only to pay medical bills.  MBA will monitor and this proposal will add to the budget deficit so likely will not pass this session.

 LD 270, and LD 299 both deal with recommendations from the Blue Ribbon Commission studying Internet Policy.  MBA will monitor because they both will deal with privacy issues and may conflict with federal banking law and proposed state law (see discussion below on Privacy).   One proposal to the Blue Ribbon Commission was to create an Office of Privacy or privacy ombudsman.  MBA will oppose this, though may work with the commission and the legislature to develop ongoing privacy policies for Internet commerce.

 LD 391, AN ACT to Expand the Mission of the Office of the Public Advocate would expand insurance ratemaking hearings to the role of the Public Advocate.  This may impact bank sale of insurance products, sale of credit life insurance and possibly even affect our self-funded employee benefit plan.

 LD 412, AN ACT to Amend the Maine Consumer Credit Code proposes to expand the number of days from 90 to 12 months prior to making the first payment.  Interest would accumulate during that time period.  MBA may oppose this since it would create a financial burden for many consumers.

 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 changes the name from Bureau of Banking to the Bureau of Financial Institutions.  This was introduced by the Credit Union League.

LD 533, AN ACT to Improve the BETR Program proposes to eliminate use of both the BETR program and TIFs for the same eligible property.  This bill would eliminate the so-called double-dipping for certain projects and properties.

 PRIVACY ISSUES AND THE DEPARTMENT’S PROPOSED DRAFT LEGISLATION

 As many of you know, the Maine Bankers Association, the Maine Association of Community Banks, and the Maine Credit Union League has worked with the Bureau of Banking on a privacy working group studying the banking industry’s compliance with new privacy regulations.  One focus of this working group has been consistency between state and federal privacy laws.   The Bureau and representatives from the department indicated to this working group that they would introduce department legislation amending Maine law so that it would be more consistent with Gramm Leach Bliley. This legislation incorporates parts of GLB into Maine law.

 Maine Bankers publicly has stated that it will support any legislative proposal as long it does not place any additional privacy regulatory burdens on Maine banks.  Unfortunately, after thorough review of existing state law in Chapter 16 of the Maine Banking Code (9-B MRSA), which is the Confidential Records Statute, we are concerned that Maine law is already stricter than federal law and that the proposed department legislation will make the situation even worse!  Discussions with interested parties, bank counsel, and the regulators are taking place, and the MBA Board of Directors is reviewing this issue at this time.  Stay tuned for further information!

 BANKERS DAY AT THE LEGISLATURE IS TUESDAY, APRIL 10^TH! 

Please put this date on your Calendar – many bankers will be asked to attend the Bankers Day.  Last year we had over 100, and our goal this year is 186 bankers – so that there will be one banker to shadow every legislator!!

 NEXT LEGISLATIVE COMMITTEE MEETING SCHEDULED FOR MARCH 8^TH!

 As stated at the beginning of this Newsletter, there are now over 600 LDs in print and 54 LDs that have been pulled for MBA to monitor or take positions to actively lobby.  By March 8th, there will be many more and these will need the review and discussion by the MBA Legislative Committee.  If you see LDs that are of special interest or if you want to comment on any proposed legislation, please, call the MBA office or talk with a MBA Legislative Committee member!

 If you would like to begin receiving the MBA Legislative Update via E-Mail, please send your request to psnow@mainebankers.com and we will no longer mail the update to you.  Thank you for helping us to save on postage!