February 23, 2001
LEGISLATIVE UPDATE Volume 4 – 2001
· MBA’S LEGISLATION – HEARINGS HELD & SCHEDULED
· UPDATE ON OTHER BANKING-RELATED LDs
· UPDATE ON DEPARTMENT’S PRIVACY LEGISLATION
· BANKERS DAY & NEXT LEGISLATIVE COMMITTEE MEETING
MBA’S LEGISLATION – LDs PRINTED, HEARINGS HELD & SCHEDULED!
For the past two weeks, there have been 250 new LDs per week and there are now more than 1,110 LDs in print. The proposals that have been introduced with the backing of the Association are:
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. This proposal also makes Maine law more consistent with Gramm Leach Bliley. After negotiations with the Securities Division, an amendment was presented that resolved the division’s concerns. The Public Hearing before the Banking & Insurance Committee was held Wednesday, Feb. 21 and the Work Session will be held on Feb. 26th at 1:00 p.m.
LD 577, AN ACT to Create Equitable Taxation of Leased Property removes the sales tax exemption for certain 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 this sales tax. The Public Hearing is scheduled for Feb. 28th before the Taxation Committee at 1:00.
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 Public Hearing will be held on March 1 at 1:30 pm before the Utilities Committee. At the request of the Department of Professional and Financial Regulation, we will propose an amendment that exempts financial institutions and their affiliates, subsidiaries and agents from the Consumer Solicitation Sales Act. This amendment continues to have strong legislative support from the sponsors.
AN ACT to Conform Maine Digital Signature Law to Federal Law has not been printed to date, but the sponsor has reviewed the final version and returned it to the Revisor’s Office. It should be printed by next week. This proposal removes state inconsistencies with the federal E-sign law.
UPDATE ON OTHER BANKING-RELATED LDS
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.) After the public hearing and 2 work sessions, the Banking & Insurance Committee voted 9 – 4 Ought Not to Pass. All three senators on the committee opposed the proposal, as did MBA. This LD should go to the house floor for debate next week.
LD 57, AN ACT to Require That Certain Employees 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. The Public Hearing will be Thursday, March 1 at 1:30 before the Labor Committee.
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. However, with MBA’s support through testimony by MBA President Joe Pietroski, and at the request of the LD’s primary sponsor, the banking & insurance committee will write a letter to the criminal justice committee urging them that they review the issue of Maine’s prosecutors bringing issuers of bad checks to court.
LD 153, AN ACT to Reduce Finance Charges on Consumer Loans proposed to reduce rates and dollar amounts under the Consumer Credit Code’s section that deals with “step-rates.” The Banking & Insurance Committee voted 12 – 1 Ought NOT to Pass, with the one vote being the sponsor, Rep. William Smith of Van Buren. It will be on the house calendar in the next several business days.
LD 203, AN ACT to Establish Medical Savings Accounts had its Public Hearing Feb. 22nd before the Taxation Committee. MBA testified in support of the proposal, which would encourage savings. However, because the bill will have a fiscal note costing revenue, it is unlikely to pass.
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.
LD 277 and LD 299, both Acts that affect the Blue Ribbon Commission to Establish a Comprehensive Internet Plan and how that Commission proposes to create Privacy policies for the Internet have been held up in the house and senate even prior to “reference to a committee”. This procedural concern means that the house and senate are not sure which committee to refer these LDs. MBA will follow these bills because they include provisions to create an “Office of Privacy.”
LD 300, the Governor’s Budget proposal, includes several provisions concerning MBA. First, there are proposals that reduce the type of businesses eligible for the BETR program. MBA testified against these proposals. The appropriations committee had its first work session on this section on Wednesday, and the committee is split on their BETR appropriation. There will be other proposals (LD 533 and others) dealing with the BETR in the next few weeks and final committee action will await these bills.
Second, the Governor proposes to expand the Real Estate Transfer Tax to mergers and acquisitions through stock transfers. MBA led the opposition of this proposal last year, though will play a less active role this session. There will be at least one amendment to the original proposal, and probably many other amendments prior to any final passage. MBA will monitor this issue.
LD 334, AN ACT to Provide Incentives to Families Who Save for College had its Public Hearing Feb. 22nd before the Taxation Committee. MBA testified in support of this proposal that would offer a state tax deduction for contributions into the NextGen program. A similar proposal passed the taxation committee last year, but did not get funded from the appropriations committee.
LD 391, AN ACT to Expand the Mission of the Office of the Public Advocate would expand insurance ratemaking hearings to include participation from the Public Advocate. Over time this would impact bank sale of insurance products such as credit life. The Public Hearing is March 5th.
LD 412, AN ACT to Amend the Maine Consumer Credit Code had its Public Hearing on Feb. 21st before the Banking & Insurance Committee. MBA did not take a position on this proposal, which would allow lenders to defer interest for up to 12 months (current law is 30 days.) Will Lund proposed an amendment that clarifies that interest would not accrue during that period. The proposal was on behalf of the Maine Auto Dealers. As amended this LD should pass.
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 was introduced by the Maine Credit Union League to change the name of the Bureau to Maine Bureau of Financial Institutions. At the Feb. 21 Public Hearing, the Department supported the proposal, and Maine Bankers testified that, knowing we would be asked, that it was OK with the banking industry to change the name.
LD 593, AN ACT to Establish the Office of Securities Within the Department of Professional and Financial Regulation proposes to remove the Securities Division from the Bureau of Banking and create a separate Office of Securities within the department. MBA recognizes that this change may better reflect the regulation of securities within Maine.
LD 629, AN ACT to Allow Mortgagor to Select a Land Title Company to Perform the Title Search is proposed to expand who may perform certain closing services for mortgage borrowers. As drafted, MBA will oppose this proposal, along with the real estate industry, representatives from the secondary market and many lawyers.
LD 668, AN ACT to Reallocate a Portion of the Calendar Year 1999 Allocation of the State Ceiling on Private Activity Bonds would reallocate $10 million of the state’s bond cap from 1999 to be used for student loans. This is the first bill that impacts the allocation of private activity bond money that caused so much controversy last session. MBA will monitor these bills.
LD 849, AN ACT Regarding Social Security Numbers Used for Identification Purposes is yet another proposal that would restrict when a business may ask for their customer’s social security number. Similar proposals have been defeated in each recent session of the legislature, and banks often need social security numbers for many federal programs and other purposes.
LD 872, RESOLVE, to Create the Commission to Study Privacy Laws would create a commission that continues review of Maine’s privacy laws, including privacy of medical and insurance records and for the internet. This continues some of the work done by the Commission Studying Internet Policy and would include participation in the commission by a banking representative.
LD 922, AN ACT Requiring the Court System to Notify Credit Rating Companies of Debt Clearances proposes that state courts notify credit reporting companies of debt clearances involving debt or bankruptcy. This LD’s final language is not prepared at this time, and MBA will monitor this.
UPDATE ON DEPARTMENT’S PRIVACY LEGISLATION
The Department of Professional and Financial Regulation has prepared and circulated a new draft of their privacy legislation. This draft clarifies several areas of concern previously expressed by the banking industry. MBA recognizes that the department must pass privacy legislation not just for the banking industry but for insurance and securities firms also.
Representatives from MBA, MACB and other interested parties will meet on Friday March 2nd at the department to address outstanding issues and seek a uniform position supporting this important legislative proposal.
MBA sent the most recent draft to all its members, to several law firms, and other interested parties for their comments prior to the March 2nd meetings. As we have stated, MBA’s position is to support privacy legislation that does not create a greater burden for the industry than Gramm Leach Bliley.
It is important that all member banks review the privacy legislation and get their comments to the Association no later than March 1st!! Thank you!
REMINDER – BANKERS DAY AT THE LEGISLATURE ON APRIL 10TH!
Bankers Day at the Legislature will be Tuesday, April 10th. Our goal is to have one banker for every legislator! Plan to arrive at the State House by 7:45 because if you “shadow” a committee chair, you will be invited to the “Chairs Meeting” which begin at 8:00. Coffee and pastries will be served that day, as well as lunch for all bankers and all legislators!
NEXT LEGISLATIVE COMMITTEE MEETING ON MARCH 8TH!
PLEASE, ALL MEMBERS OF THE MBA LEGISLATIVE COMMITTEE PLAN TO ATTEND THIS MEETING – THURSDAY, MARCH 8TH AT THE AUGUSTA CIVIC CENTER.
