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The Alabama Bankers Association has submitted three bills for passage this session:
- - This bill restricts the use of lender information that is publicly available including loan numbers, amounts and trade names in solicitations for services or products without the consent of the lender. The Senate bill was approved by the Senate Banking and Insurance Committee on Wednesday. Thanks to our bill sponsor Sen. Roger Bedford (D-Russellville) for his leadership.
- - This bill codifies a Supreme Court decision that an assignee of a creditor may enforce a lost note just as the creditor could. This bill received a favorable report from the Senate Banking and Insurance Committee on Wednesday. The House bill is on the House Banking and Insurance Agenda for next Wednesday.
- - Currently, all property is subject to a one-year right of redemption to the owner. This bill removes that the redemption period for commercial property. The Senate Banking and Insurance Committee carried this bill over for one week while we seek some compromise language. The House version is on the House Banking and Insurance Committee agenda next week.
Senator Phil Poole (D-Moundville) has decided to retaliate against GOP members in both chambers by killing their bills for derailing a million dollar appropriation he had in the budget last year for road construction in his district. House Minority Leader Mike Hubbard has indicated that they may have to filibuster Senate bills in response.
—ABA’s interest is simply that we have some members who have their own PACs and use that money to contribute to ALABAPAC. We’ve advocated that any ban should exempt “member organizations”.
- This Alabama Law Institute uniform bill has been introduced again this year. ABA has opposed language in the bill that places additional penalties and burdens on lenders.
Specifics:
- This bill is based on a model bill prepared by the American Law Institute, and has been introduced for several years. To date, this bill, or parts of it, have been enacted in only a very few states and will not promote uniformity among the states.
- This bill imposes additional unnecessary burdens on lenders, especially relating to the form and method of issuing payoff statements.
- The penalty fees are too high
- The provisions of the bill, e.g. relating to equity lines, do not work.
A public hearing on this bill is scheduled for Wednesday, February 20th in the House Banking and Insurance Committee.
) - This bill, which increases the penalty for writing check on a closed account, was approved
Wednesday, by the House Judiciary Committee. The bill makes a distinction between a check returned for insufficient funds and one returned because it is drawn on a closed account. Also under this bill, a person who knowingly passes a check on a closed account would be guilty of second-degree theft of property for each check written regardless of the amount of the check. Currently, a check returned for insufficient funds and a check returned because it is drawn against a closed account are prosecuted as a Class-A misdemeanor. This bill increases the charge for knowingly drawing against a closed account to second-degree theft of property, a Class-C felony. Stealing a check or credit card regardless of value also results in a second-degree theft of property charge.
—SUTA Dumping bill— Without this bill, Alabama businesses could see a $378 increase per employee in federal unemployment taxes. Tom Surtees, director of the Alabama Department of Industrial Relations, said failure to pass the legislation will give the U.S. Department of Labor the authority to remove a 5.4 percent tax credit currently in place for Alabama employers, which will “increase the tax exponentially.” Surtees said elimination of the tax credit would raise federal taxes from 0.8 percent of the first $7,000 of wages to 6.2 percent of the first $7,000 of wages. That equates to an increase from $56 to $434 per employee! The House has passed this bill which is now pending in the Senate Business and Labor Committee.
SB 19 by Sen. Coleman (D-Birmingham) - This bill proposes to limit overdraft fees to $10 and prohibit banks from delaying deposits and "the systemic manipulation of the posting of checks and other debits to depository accounts for the purpose of generating overdraft fees". The bill does not directly impose a penalty for the latter. ABA is working to defeat this legislation.
- This bill makes it possible to prosecute those who pass a worthless check that doesn’t require the writer to sign it, typically through an electronic funds transfer or when the bank has a signature on file. This bill places “payee-initiated demand drafts” under the definition of a check. A “payee-initiated demand draft” is not signed by the drawer, but is created by a third-party with the drawer’s permission for the purpose of drawing from the initiator’s bank account.
To fall under the definition of a “payee-initiated demand draft,” such an instrument may contain one or all
of the following:
- The drawer's printed or typewritten name or account number and a notation that the drawer authorized the draft, or;
- The statement "no signature required," "authorization on file," "signature on file," or words to that effect.
Currently, Alabama’s DAs aren’t prosecuting cases involving these kinds of checks, because there is no signature. This legislation makes passing such a check without sufficient funds, a prosecutable offense. More than 10 states, including California, Colorado, Oregon, Texas, West Virginia and Tennessee, have adopted similar provisions.
This bill is on the House Banking and Insurance Agenda for next Wednesday.
- This bill doubles the cap on the business privilege tax for all classes of payers. For banks it moves from $3 million to $6 million. This bill is most likely dead.
- This bill reduces the redemption period on real property from one-year to four-months. ABA is working with Rep. Ford to get this bill approved by the House Banking and Insurance Committee.
- This bill, presumably an AARP initiative, would require financial institutions doing business in Alabama to cash, without charge, a government issued check for a senior citizen regardless of whether the senior citizen has a personal account at the financial institution. ABA is working to defeat this legislation.
- This bill provides procedures for placing security freezes on consumer reports and requires a consumer reporting agency to put a security freeze on a consumer report upon request of a consumer. It further provides a procedure to temporarily lift or remove a security freeze on a consumer report and allows a consumer to recover damages that are the result of a reporting agency's failure to place a security freeze on a consumer report. This bill has been assigned to the House Banking and Insurance Committee. ABA amended a similar bill last year to exempt institutions regulated under Gramm Leach Bliley.
—The Senate Banking Committee approved a bill to close the industrial loan company loophole by an 11-10 party-line vote . The American Bankers Association (ABA) supported the panel's action and urged the full Senate to quickly pass the legislation. "It has long been the ABA's position -- and the policy of this country -- that commercial firms should not own banks," said Floyd Stoner, ABA EVP for congressional relations. The Committee approved an amendment that would establish parity between bank and savings association holding companies, allowing the latter to seek permission for new activities from the Office of Thrift Supervision rather than the FDIC. The Committee also approved a technical corrections substitute amendment, as well as an amendment regarding ILC ownership by domestic auto manufacturers.
—Senate Majority Leader Harry Reid (D-NV) introduced a housing bill (S. 2636) Wednesday night intended to help prevent an estimated 2 million homes from going into foreclosure. The legislation includes a problematic provision that would allow bankruptcy judges to restructure some risky home mortgages on the verge of foreclosure which is opposed by the banking industry. The bill also would allocate $200 million for housing counselors to reach at-risk homeowners; provide $4 billion in community development grants to purchase and rehabilitate foreclosed properties; simplify disclosures on subprime mortgage loans; raise by $10 billion the cap on mortgage revenue bonds that states could offer to help distressed homeowners refinance loans; and allow businesses to write off losses retroactively for as many as five years.
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