Legislative Update: March 27, 2015

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 that time, the bill was awaiting House floor action.  As of today, the bill is still awaiting House floor action.  As you will recall, SB280, the statute of frauds bill, was killed in House Business Committee.  Steve Turkiewicz and the MBA are attempting to revive the bill by carving out home mortgage discussions from the scope of the bill.  To state this another way, an amendment may be offered in House Business Committee to revise the scope of the bill in order to get the bill off the table, on to the House floor and to the Governor’s desk.  The governor’s office has strongly indicated it 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 not, the Democrats will use one of their ‘silver bullets’ to get the bill on to the floor of the House.  If the bill makes it to the House, it will pass.  I expect that the bill will eventually make it to the Governor’s desk and be signed into law.

The notary modernization act: Passed out of Senate business committee, and should be heard by the full Senate as soon as today or Monday.

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.   It will likely be signed into law.

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.

At this point in time, the legislature is, in terms of days, two-thirds of the way through.  The Legislature is slated to end during the last week of April.  The remainder of the session will be primarily devoted to budget and appropriations matters.