Legislative Update: January 24, 2015

The legislature just completed its third week of the session.

Legislation of Interest to the Industry:

  1. Minimum wage: Maybe the most important development at the Legislature this week was the fact that a Senate Committee killed off a proposal (Senate Bill 2) from Sen. Jonathan Windy Boy (SD 16 – Box Elder) to raise Montana’s minimum wage to $10.10 an hour – a 25% increase over the current minimum wage of $8.05 per hour, which was indexed to inflation at the end of the last fiscal year.
  1. Tax relief: The House Tax Committee heard and passed House Bill 166, sponsored by Rep. Keith Regier (HD 4 – Kalispell).  This bill, if enacted, will reduce each of Montana’s seven marginal tax rates on personal income by 0.1%. A key priority for the Chamber this session, it passed in Committee 13-7.

The Banking Commissioner’s Bills

Commissioner Hall is running several clean up/compliance bills for the Division of Banking.  These bills and their status are as follows:

SB 75 – This bill seeks to better regulate nondepository lenders; namely out-of-state lenders.  The bill passed the Senate unanimously this week, and will move over to the House of Representatives for its consideration MIB supported this legislation in Committee.  A copy of the bill is linked here: http://leg.mt.gov/bills/2015/billpdf/SB0075.pdf

SB 98 – This bill revises the Montana mortgage act by revising the criteria for who meets the mortgage licensing requirements, the amount of experience needed to be responsible for a mortgage, and by allowing the Department to use national licensing forms approved by the NMLS, as opposed to state based forms.  During the hearing on this bill in the Senate, State Farm came in and again attempted to get an exemption from Montana for its contractors.  That State Farm request was turned down by the Committee, but with an admonition from the Committee to Melanie Hall to engage in active discussions with State Farm about State’s Farm’s request.  This bill easily passed the Senate and has been sent to the House for its consideration.  A copy of the bill is linked here: http://leg.mt.gov/bills/2015/billpdf/SB0098.pdf

HB 66 – This bill provides that the call reports you electronically transmit to the FDIC or other federal banking regulatory agency satisfies the Department’s requirement for transmitting the same to Melanie; the bill also eliminates the Department’s legal obligation to requisition those reports.  MIB supported this bill during the house hearing.  The bill easily passed the house, and has been referred to senate committee.  It should easily be signed into law.  A copy of that bill is linked here: http://leg.mt.gov/bills/2015/billpdf/HB0066.pdf

The Division of Banking is funded primarily through assessments imposed on you, and other financial institutions, regulated by the Department.  As Melanie discussed during our joint board meeting last week in Helena, the Department presently has an operating ‘surplus’ of about $2 million.  The Division has been taking in more than it has been expending for the last several years, which is why Melanie cut your assessments in half.  The money collected by the Division of Banking goes into a special revenue fund that is separate and apart from the State’s general fund, i.e. the State general checking account.

Melanie’s budget was heard before the Appropriations Committee last Friday.  Prior to last Friday’s hearing, there had been some consideration by the appropriations committee to sweep Melanie’s surplus into the general fund account as a ‘one-time’ matter.

As Melanie discussed during her presentation to the joint board meeting, prior to last Friday’s meeting, Melanie announced that the Division of Banking would be ‘refunding’ $1 million of that back to the institutions the Division regulates by not charging assessments during several months of 2015, namely, June and July.  Recall, the fiscal year ends July 31st for the State.  By doing this, Melanie reduced down the amount in the special revenue fund, and headed off any talk by the appropriators of raiding that money.  Melanie announced this to the appropriations committee last Friday, which will have the effect of ensuring that the Division of Banking’s money is not raided as some appropriators would like to have done.  Thus, in sum, this is not an issue at the moment.  However, MIB will continue working with Melanie to ensure it does not become a problem prior to the end of the session.

Other Bills of Interest to Montana Community Banking

SB 39 – The Senate business and labor committee held a hearing on the Attorney General’s bill to authorize the AG to tackle and redress the problem of patent and copyright trolling.  Specifically, the bill authorizes a civil claim and civil penalty for instances of bad faith assertions of patent rights.  The bill received a favorable hearing, with only the trial lawyers raising objection.  MIB spoke in favor of this bill, and noted the instances where Montana banks are receiving abusive patent infringement letters related to ATM machines.  Several patent attorneys asked that the bill be amended to better protect the ability of true patent holders to send cease and desist letters.  The bill should easily pass out of committee.  A copy of that bill is linked here: http://leg.mt.gov/bills/2015/billpdf/SB0039.pdf

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 Tax Committee has taken no action on this bill at this point.  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.  MIB supported with qualification.  A copy of that bill is linked here: http://leg.mt.gov/bills/2015/billpdf/HB0029.pdf

Upcoming Bills for the Week of January 26, 2015

HB 225 – The House business committee will consider a bill on Friday 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.  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.  http://leg.mt.gov/bills/2015/billpdf/HB0225.pdf

HB 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.  A copy of that bill is linked here: http://leg.mt.gov/bills/2015/billpdf/SB0053.pdf

MBA Bills

MBA notified us at the joint board meeting that it would be bringing forth legislation to redress the Morrow decision.  To wit: bills would be introduced to restore the statute of frauds and to redress the treble damages provision.  I spoke with Steve Turkiewicz yesterday and those bills are still in the drafting stage.

James Brown
MIB Executive Director