Legislative Update: April 6, 2015

The legislature will return from its Easter break on April 7th.  This past week marked the passage of the 67th legislative day on Tuesday when all appropriations, revenue, and referenda legislation had to transmit to the other chamber for consideration.  The Legislature has now completed two thirds of the 90 day 2015 legislative session.

The remainder of the legislative session will, as is usual for this point of the session, focus on the budget and appropriations process.  MIB will monitor that process, but, at this point, is not advocating for any particular spending project.

Per the legislative calendar, the last and 90th day is currently Thursday, April 30.The following is an update on issues of interest to or impacting the banking industry.

Congressional Update

As you may have seen from the ICBA updates, it was a good week for community bank regulatory reform in Congress.  The House Financial Services Committee passed out numerous bills advanced by ICBA related to regulatory relief:

  • The Eliminate Privacy Notice Confusion Act (H.R. 601), to eliminate a provision requiring financial institutions to provide annual privacy notices to customers even when their policies have not changed.
  • The Bureau of Consumer Financial Protection Advisory Boards Act (H.R. 1195), to statutorily establish community bank and small business advisory boards at the Consumer Financial Protection Bureau.
  • The Helping Expand Lending Practices in Rural Communities Act (H.R. 1259), to allow individuals to petition the CFPB to reassess the rural status of counties.
  • The Mortgage Servicing Asset Capital Requirements Act of 2015 (H.R. 1408), to delay and study Basel III rules on mortgage-servicing assets.
  • The Community Institution Mortgage Relief Act of 2015 (H.R. 1529), to exempt from escrow requirements any mortgage loan held in portfolio by financial institutions with $10 billion or less in assets and to increase exemptions for small servicers from 5,000 loans to 20,000 loans.

The markup is the committee’s first round of advancing community bank regulatory relief in the 114th Congress and follows last week’s ICBA testimony on the consumer impact of excessive regulation.

Montana Legislature Update

The Morrow Bills:  At the conclusion of our last episode, SB 281, the punitive damage relief bill, had passed both the Senate and the House business Committee.  At this time, the bill is awaiting House floor action.  As of today, the bill is slated to be considered on the House floor this coming Wednesday.  I expect the bill to pass and to be sent to the Governor.

As you will recall, SB280, the statute of frauds bill, was killed in House Business Committee.  The bill was amended last week in an amendment brought by Rep. Jeff Welborn of Dillon.  The bill carves out home mortgage discussions from the scope of the bill, thereby leaving modification discussions of those type of loans subject to Morrow.  After that amendment was offered, the bill was brought off of the table and passed.

The bill will be considered on the House floor this coming Wednesday as well.  The Governor’s Office has strongly indicated the Governor will not sign either bill.

The CSKT Compact:  At the conclusion of our last episode, the CSKT had passed the Senate and was awaiting a hearing in the House.  It is still awaiting a hearing, though I believe a hearing date has actually been set–which is now slated for April 11th.   Based on my discussions with folks at the legislature, the bill does not have enough votes to get out of the House Committee.  However, if it does get out of Committee, it will come out with an adverse committee report, which means that in order to pass the House, the bill will need 60, not 50, votes.

The Notary Modernization Act: Passed out of Senate business committee, and should be heard by the full Senate soon.

Governor’s Bonding/Spending Bill, HB 5: The Governor’s state bonding/spending bill was formally tabled.  The Republicans have broken the bill into various separate bills, and have scaled back the size of the funding to be spent on infrastructure.  The Governor has made a big deal that he won’t sign any infrastructure bill unless it is his bill.  The reality is, of course, that some form of infrastructure bill will be signed into law, though not in the spending size desired by the Governor, and most of that infrastructure spending will be paid for by cash.

SB 39:  This is the Attorney General’s bill to authorize the AG to tackle and redress the problem of patent and copyright trolling.  The bill has passed both houses and has been transmitted to the Governor for his signature.  The bill was signed into law on the 2nd of April.

SB 266:  This bill would enact a uniform Montana statute for trustees, conservators, personal representatives to access the digital assets, e.g. Facebook pages, electronic medical records, of the ward, the deceased.  The bill passed out of Senate Judiciary unanimously.  The bill passed the Senate unanimously.  The House judiciary committee killed it after Google and Facebook flew their teams in to oppose the bill.

SB 54 – This bill would authorize public disclosure of real estate sales prices for tax appraisals.  In effect, it would make reality transfer certificates filed on real estate sales a matter of public record.  Those certificates are not a matter of public record at present.  MIB did not take a public position on this bill.  There was strong testimony both for and against this legislation during the hearing, with the opposition coming mostly from realtors and title companies.  The Senate passed this bill with 21 votes against.  The House Taxation Committee passed the bill 13-7.  The bill now moves to the floor of the House.  A copy of that bill is linked here: http://leg.mt.gov/bills/2015/billpdf/SB0054.pdf.

HB 29 – This bill revises the regulation of real estate appraisers, namely by making it easier to become a licensed real estate appraiser. This bill would give the board of appraisers greater flexibility to train new appraisers.  At present, most, if not all of the out of state appraisal companies will not allow a state licensed trainee to participate in the completion of an appraisal assignment, nor will they allow an appraisal firm to assign an appraisal assignment to another appraiser in the firm. These two items have had a very negative effect on the appraisal and lending business.  The appraisers claim that there are 21,000 less appraisers as a result of Dodd-Frank.  This bill is intended to give more authority to the state licensing entity to qualify new appraisers.

The bill passed out of the House with some small opposition, 11 votes against.  The Senate Business Committee passed the bill out unanimously.  The bill has not been scheduled for full Senate consideration as of yet.  MIB supported this bill so long as it was amended.  The bill was amended in committee as requested.  A copy of that bill is linked here: http://leg.mt.gov/bills/2015/billpdf/HB0029.pdf.

HB 225 – The House passed 100-0 the bill proposed by the funeral directors association to allow them to deposit pre-paid funeral expenses in any banking institution that maintains an office in this state, as opposed to the current law that requires that the principal place of business for that institution be located within the State of Montana, and to give them 10 days to deposit such funds instead of 3 days.  Aside from the obvious problem of extending the depository time as it relates to possible theft of such funds, I don’t see a concern with this bill from the MIB perspective.  The Senate also approved the bill unanimously.  The Governor has signed the bill into law.  A copy of that bill is linked here: http://leg.mt.gov/bills/2015/billpdf/HB0225.pdf.

SB 53 – This bill would impose stricter fiduciary requirements and competency standards on those who serve as directors for credit unions.  MIB has taken no position on this bill, but the bill is, on its face, good public policy.  The bill was signed into law last week.  A copy of that bill is linked here: http://leg.mt.gov/bills/2015/billpdf/SB0053.pdf.