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   User: Visitor   mba@mainebankers.com 5/16/2008 11:15 am  

 

LEGISLATIVE UPDATE

JANUARY 23, 1998

 

 

  1. The Second Regular Session of the 118th Legislature opened Monday, January 5th. This is the short session of the two-year term, and Leadership promises to adjourn in mid-March. There were more than 600 bills brought before the Legislative Council; approximately 250 of those were admitted. Additionally, there are more than 100 carry-over bills, numerous Committee study reports resulting in legislative proposals, legislation introduced by the Governor’s office and various Executive Departments, and emergency proposals brought to the Legislative Council for review during the session.

    In other words, there will be numerous pieces of legislation that MBA will monitor and participate in hearings and work sessions. As Contact Bankers, you will be asked to review some of these proposals, and at times may be asked to contact your local legislators to communicate the banking industry’s position on important legislation.

  2. Priority banking issues expected before the Legislature this session include:

(1) Five carryover proposals that in some manner establish college savings programs. These LDs are

  • LD 1652, AN ACT to Establish the Dirigo Higher Education Bond Program to Provide Financial Aid to Maine Students;
  • LD 1717, AN ACT Establishing a Higher Education Trust as an Instrumentality of the State;
  • LD 1718, AN ACT to Create a Prepaid Tuition Plan;
  • LD 1778, AN ACT to Establish the Maine Prepaid College Tuition Program; and
  • LD 1825, AN ACT to Authorize a Tuition Savings Plan to Encourage Attendance at Institutions of Higher Education.

Maine Bankers Association has reviewed these proposals, has met with House Speaker Libby Mitchell about the industry’s concerns about these bills, has communicated with sponsors of the legislative proposals, and talked with other interested parties such as the Finance Authority of Maine and Maine Education Services. Primarily, MBA’s concerns are that the programs authorize banks to receive funds as deposits, that all Maine banks are allowed to participate in the program, and that deposits should be held in Maine as much as possible. Otherwise, funds that move to out-of-state investment houses will be lost as part of Maine’s deposit base. A number of states, including Massachusetts, have passed similar legislation which takes advantage of a recently enacted federal tax break for college savings plans.

The Public Hearing on all five bills will be held Wednesday, January 28th before the Education Committee. MBA Executive Director Joe Pietroski will testify for the Association. The Education Committee is expected to hear all five proposals simultaneously, and craft a new consensus bill supported by the Committee. Stay tuned for progress on these LDs.

2) At this time, MBA is not certain if the Taxation Committee will pursue a study of the Bank Franchise Tax. This summer there was franchise tax review performed by a sub-committee of the Legislature’s Taxation Committee. One focus of the Sub-committee was concern about financial service providers now offering similar financial services but being taxed differently. The Bureau of Revenue Services, formerly the Bureau of Taxation, has proposed further study of the tax treatment of financial service providers, but it is not known at this time if the Legislative Committee will pursue such a Study. Again, we will keep you informed.

C) LD 1929, AN ACT Concerning Notices Given in Connection with Mortgage Foreclosures, had its Public Hearing before the Banking and Insurance Committee Thursday, January 22nd. This proposal clarifies current conflicting laws (in certain circumstances, banks may have to give 3 separate and different notices!) regarding the type and number of days for the notice requirement. While the original proposal was supported by MBA, the Bureau of Banking has offered several amendments further clarifying the foreclosure notice laws. Interested parties, including MBA are still crafting language for the amendments and a consensus final draft should be ready for the Monday, January 26th work session.

D) There are three primary banking issues in Congress it convenes in 1998. They are:

  1. Legislation in reaction to the U. S. Supreme Court decision on Credit Union common bonds. This decision is expected any day now, and there will be legislation proposed regardless of the outcome. You will receive a special bulletin about the Supreme Court decision when it is rendered.
  2. Bankruptcy Reform – much needed changes to the current Bankruptcy Code, including banker-supported changes to Chapter 7 bankruptcy filings. Consumers and their attorneys have discovered the ease of filing Chapter 7 bankruptcy, avoiding all their debts even though able to pay certain obligations. This issue will be controversial in as much as a consumer study of bankruptcy laws has called for reforms that make bankruptcy even easier that today.
  3. Financial Modernization – carried over from last year, this proposal would allow new product opportunities for banks, and also allows ownership of banks by other commercial businesses. More than 100 amendments were offered last year and there is still uncertainty if consensus on one bill can be reached.

 
(c) Maine Bankers Association 2003