LEGISLATIVE UPDATE # 3 JANUARY 27, 2006
- HEARINGS/WORK SESSIONS HELD ON IMPORTANT BANKING LEGISLATION
- UPDATE ON MINOR BANKING LDS
A number of banking-related LDs already have had their Public Hearings and Work Sessions. This Update will highlight the key banking issues that are working their way through the Legislative process. Our thanks to bankers who have attended and testified at Public Hearings this week!
LD 1761, AN ACT to Offer Financial Institutions an Option for Payment of the Maine Franchise Tax was heard Thursday, 19th, followed by a Work Session on Wednesday, January 25th. Maine Bankers Association testified in support of this proposal, stating that while this LD was not introduced at our request, we believe that it would assist the Commissioner of the Department of Economic and Community Development attract new financial institution operations-type jobs into Maine. The Taxation Committee voted 11-1 Ought-to-Pass, and should move to the full Senate within a few weeks.
LD 1782, AN ACT to Prevent Elder and Dependent Adult Financial Abuse had its Public Hearing on Tuesday, January 24th and a Work Session on the 26th. Two bankers, Susan Norton from The First and Rebecca Sargent from Union Trust Company, joined the Association in testifying against this proposal, which would require bank employees to become mandatory reporters to the Bureau of Elder and Adult Services should the employee suspect financial exploitation of the elderly. Many consumer-related groups, the AARP, Triads, the Disability Rights Center, Maine’s Attorney General’s office and two law enforcement representatives testified in support of the Legislation and urged the Committee to help protect Maine’s most vulnerable citizens from financial abuse.
The sponsor of the LD, Senator Art Mayo, stated that he would be satisfied with a Study that would review how best to prevent financial exploitation. However, a number of Committee members seemed interested in passing the original bill. At the Work Session January 26th, Senate Chair Nancy Sullivan asked that all interested parties try to work together to craft a compromise proposal that all can support. Superintendent of the Bureau of Financial Institutions Lloyd LaFountain will lead a group that will meet on January 31st. Supt. LaFountain seems willing to address some of the proponent concerns administratively, by means of a letter from the Department asking that all financial service providers increase their efforts to inform their employees about financial exploitation of the elderly. At the same time the Bureau of Elder and Adult Services may be asked to will update their printed booklets and make training materials available to all parties.
Banks and credit union representatives remain adamantly opposed to mandatory reporting.
LD 1783, AN ACT to Amend the Maine Consumer Credit Code as it Relates to Finance Charges for Loans on Open-end Credit, had its Hearing January 24th, and a Work Session on the 26th. Joanne Campbell, Camden National Bank testified in support of this bill that provides parity for state banks to offer home equity lines of credit accessed by means of a credit card.
At the Work Session, the Committee voted unanimously Ought-to-Pass, so this LD should move quickly to the Senate for full consideration.
LD 1835, AN ACT to Protect Consumers from Credit Card and Debit Card Holds, had its Public Hearing on Wednesday, January 25th before the Business Research and Economic Development Committee. Rep. Walter Ash sponsored this LD in response to a number of consumer complaints about holds placed on accounts when paying for gas at the pump.
The Hearing lasted more than 2 hours, and there was a great deal of conflicting testimony against the bill. Merchant groups claimed it was the bank’s fault for placing the hold on the accounts of their consumers, while banking industry representatives attempted to make clear that it was the merchant that initiated the dollar amount of the hold, which was treated electronically the same as a purchase.
The Work Session is scheduled on January 31st, but a group of interested parties that met on Friday the 27th will seek additional time to work on this LD. One solution that certain members of the Legislative Committee supported was additional notice and disclosure by sellers of gas to consumers that “this merchant may place a hold on their accounts” when making pre-authorized purchases.
OTHER BANKING RELATED LEGISLATION:
LD 1834, AN ACT to Accommodate Victims of Identity Theft, was heard Wednesday, January 25th before the Business Research and Economic Development Committee. Bankers opposed this proposal, along with the national credit reporting agencies, on the grounds that most of the issues presented were pre-empted by federal law, FCRA. Also, Will Lund, Director of the Office of Consumer Credit Regulation, testified Neither For Nor Against based on the grounds that state law already covers the problem, and was the result of legislation passed last Session.
LD 1810, AN ACT Regarding Criminal History Record Checks was heard last week before the Criminal Justice Committee. While not a bill originally monitored by MBA, several Committee members asked for MBA’s input regarding use of credit reports compared to use of a “criminal history record” obtained from the State Bureau of Identification. Some employers may ask for a credit report when considering a new hire, and the Maine Civil Liberties Union offered an Amendment that suggested that a written copy of any and all reports be given to the applicant should they be denied employment. There may be some FCRA issues for this Committee to consider, and MBA will monitor any Amendments offered and attend future Work Sessions.
LD 1817, AN ACT to Protect Access to Social Security Numbers, will be heard Tuesday January 31st before the Judiciary Committee. This bill, like many introduced over the past several years, proposes to limit a business use of the social security number. MBA will oppose any changes to the current law, which exempts financial institutions from the law because we have federal guidelines to follow.
LD 1837, AN ACT to Protect Retirement Funds will be heard Tuesday January 31st before the Judiciary Committee. This bill would prohibit creditors from attaching funds in a retirement account. Current law prohibits attachment of funds in qualified plans, and this proposal is unclear as to whether it makes that distinction. MBA will attend this Hearing.
