LEGISLATIVE UPDATE

 

 

TO:  CEOs, Presidents & Legislative Contacts

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

DATE:  April 3, 2009        

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Things are moving at break-neck speed as legislators and lobbyists race toward the finish line of April 10th.  There are no indications that the 87th General Assembly will extend beyond next Friday, and if legislation is not already in the pipe line it has little chance of passing.


Text Box: One of the final issues for the lawmakers to address is which three proposed constitutional amendments to refer for a vote on the November ballot. As of today, the Joint Committee on State Agencies has forwarded two amendments to their respective chambers – SJR 3: Creates a constitutional right to hunt; and HJR 1007: Authorizes the Legislature to establish criteria for the issuance of economic development bonds. There are a few other resolutions competing for the third and final spot. One of these is of serious concern to our industry - HJR 1004 which would give relief to non-bank lenders regarding the constitutionally set usury limit. Every banker will recall that we were granted a federal override to this limit as part of Gramm-Leach-Bliley (GLB). This federal override is something your association will guard at all cost. And, unfortunately, HJR 1004 has the very real potential to jeopardize this exception to Arkansas’ usury limit. Our override, as set out in Section 731 of GLB, references any state that has a constitutional provision that sets a maximum interest rate. If this part of our constitution is removed or changed in a certain way, our federal exemption could and probably would be challenged. We simply cannot take that risk. Please call or e-mail your legislator and ask that they vote against HJR 1004. The house number is (501) 682-6211 and the Senate number is (501) 682-2902, e-mail can be accessed by going to www.arkleg.state.ar.us.

HB 1137: Appropriates funds to the Bank Department, now Act 438.

 

HB 1392 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.  HB 1392 is now Act 501.

 

HB 1433 authorizes the Bank Commissioner to allow bank offices within affected areas of the state to close during a declared emergency. HB 1433 is now Act 233.

 

HB 1607, which is a technical correction to a credit card processing bill from the 2007 Session, is now Act 624.

 

HB 1867 is 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 will prevent this from happening in the future – it is now Act 634.

 

HB 1984 requires financing statements for agricultural liens (except CCC/USDA loans) to be filed with the Secretary of State.  HB 1984 is on the House floor to concur in the Senate amendments.

 

HB 2110 would create the most restrictive law in the country dealing with the use of SSNs and make misuse a criminal offence.  It appears that this bill will die in committee.

 

HB 2203 regulates entities that make tax refund anticipation loans (H&R Block etc…).  The bill, which does not apply to banks, is on the Senate floor for consideration.

 

HB 2218 would force a lender to allow a renting tenant to remain in a house up to 90 days after the property was foreclosed.  HB 2218 has now failed twice in the House Committee on Public Health, Welfare and Labor.

 

SB 431 expands the offence of defrauding a creditor to include using vehicle insurance proceeds for something other than to repair the vehicle.  SB 431 is now Act 485.

 

Remember that it is not over until it’s over.  We still have one major obstacle and that is to stop HJR 1004 from being referred to the November ballot.  Please let your Senator and Representative know that you are opposed to HJR 1004 because it will jeopardize our federal usury override!

 

 

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