LEGISLATIVE UPDATE

 

 

TO:   CEOs, Presidents & Legislative Contacts

FROM:      Charles M. Miller, SVP / Director of Legislation & Regulation

DATE:        April 10, 2009     

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We had one heck of a final week at the Capitol but it is over, and the 87th General Assembly has left town.  Although it was touch and go at times, in the end we came away from the negotiations surrounding the constitutional amendments in a really good position.  Regarding the other bills we were following, the legislation we needed to pass has done so and the legislation we worked against has either been amended, died in committee, sent to an interim study committee or been withdrawn.

 

You will recall that I reported on the proposed constitutional amendments last week and noted our serious concern regarding HJR1004. Because our federal usury override as set out in Gramm-Leach-Bliley (GLB) references any state that has a constitutional provision like Arkansas’, this amendment, as introduced, would jeopardize our federal preemption.  On Tuesday, April 7th, HJR1004 was reported out of committee over our strong objections.  However, many of the committee members were not clear if it had been amended.  What they referred out of committee had not been amended and was the worst possible version they could have adopted.  Fortunately, the Speaker, both committee chairmen and Rep. Bruce Maloch quickly became engaged, and we were able to broker a deal to have HJR1004 re-referred to committee.  Speaker Robbie Wills called a meeting of all the stakeholders and many of the committee members who had objected to the earlier committee action. The Speaker instructed the industry representatives, including ABA Counsel Paul Benham, not to leave the room until a compromise had been reached.  With the help of former Speaker Bill Stovall and representatives from the automobile and furniture industries, we were able to develop a legislative strategy and draft language that protects our federal override while giving the non-bank lenders and government bond issuers what they were seeking.  Through a lot of hard work and the outstanding leadership of the Speaker, Rep. Bruce Maloch, Rep. Eddie Cheatham, Sen. Shane Broadway and several other members of the Joint Committee on Constitutional Amendments, HJR 1004 was amended by Tuesday afternoon and re-referred to committee.  With agreed to amendments included, the Joint Resolution passed the committee and the full House on Wednesday.  The Senate passed HJR 1004 on Thursday; no action is required by the Governor.  Yet, keep in mind that we are dealing with a proposed amendment to the constitution which must be approved by the voters in November of 2010. If HJR 1004 does pass at the ballot box, our override is protected by the language your association had inserted into the resolution, and if HJR 1004 does not pass, the current override from GLB will remain in place.

 

 

 

Following is quick rundown of some of the other legislation we tracked during this session:

HB1037: Allows for security freeze on all consumer credit accounts – not just ID theft victims. Most states now allow this.  We did not oppose this session, now ACT 223.

 

HB1137: Appropriates funds to the Bank Department, now ACT 438.

 

HB1204: Tobacco tax to fund state wide trauma system, now ACT 180.

 

HB1238: Insurance premium tax to fund state wide trauma system, died in committee.

 

HB1392: Addressed lien priority for proposed improvement districts.  As amended, the bill balances the interests of banks with existing purchase money liens and banks that will eventually hold the bonds, now ACT 501.

 

HB1410: Includes mortgage lien protection in the definition of casualty insurance, now ACT 210.

 

HB1433: Authorizes the Bank Commissioner to allow bank offices within affected areas of the state to close during a declared emergency, now ACT 233.

 

HB1544: Creates the Uniform Ltd. Cooperative Assn. Act, referred to interim study.

 

HB1607: Technical correction to a credit card processing bill from 2007, Now ACT 624.

 

HB1624: Sales tax exemption for fuels used in manufacturing, now ACT 691.

 

HB1867: In response to a lawsuit in which the courts ruled against the lender in a case where a forged document was used to release a legitimate lien and have a clean duplicate title issued.  HB 1867 which is now ACT 634 will prevent this from happening in the future.

 

HB1885: Requires hold harmless language in contracts be conspicuous, referred to interim study.

 

HB1935: Repeals the Check-Cashers Act, died in committee.

 

HB1984: Requires financing statements for agricultural liens (except CCC/USDA loans) to be filed with the Secretary of State, now ACT 942.

 

HB2110: Would create the most restrictive law in the country dealing with the use of SSNs and make misuse a criminal offence, died in committee.

 

HB2203: Regulates entities that make tax refund anticipation loans (H&R Block etc…).  The bill, which does not apply to banks, is on the Governor’s desk.

 

HB2218: Would force a lender to allow a renting tenant to remain in a house up to 90 days after the property was foreclosed, died in committee

 

HB2228: Creates the Fair Debt Collections Practices Act (does not apply to banks), on the Governor’s Desk.

 

HB2270: Amends HB1392/Act 501 of this session to clarify language regarding notice, on the Governor’s Desk.

 

HJR1003: Proposed constitutional amendment to remove interest rate limits on government bonds and loans made to governmental units.  It is now part of HJR1004.

 

HJR1004: Proposed constitutional amendment to set interest rate cap on consumer loans at 17%.  Now contains HJR1003 and SJR6.  As amended it has passed the House and Senate.

 

SB10: Would convert all special revenues to general revenues and divert assessments paid by banks to the State Bank Department, died in committee.

 

SB32: Requires motor vehicle liability insurers to include listed lienholders as payees, died in committee.

 

SB431: Expands the offence of defrauding a creditor to include using vehicle insurance proceeds for something other than to repair the vehicle.  SB431 replaced SB32 and is now ACT 485.

 

SJR6: Proposed constitutional amendment to make savings from performance-based efficiency projects revenue under the revenue bond statutes, now part of HJR1004.

 

I want to thank every banker that called or e-mailed their legislator during this session.  As I have said many times – you are the backbone of our government relations program.  I am also pleased to report that in spite of the bad national press, Arkansas’ community bankers are still well respected by the vast majority of policy makers in this state.  Your stature in your community combined with our network of banks across Arkansas make the Arkansas Bankers Association most effective at the Capitol, but we can’t do it without you.  Many thanks.