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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 has been approved by the Senate Banking and Insurance Committee. 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 has received a favorable report from both Banking and Insurance Committees
- ) - 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 has passed the House Banking and Insurance Committee. In light of Rep. Ford’s bill (HB 338—described below), I do not see much opportunity for this bill to move.
The Senate spent a great deal of time debating a bill that bans PAC to PAC transfers. The fact is the bill does ban PAC to PAC transfers but does not ban the transfer of money from a PAC to a caucus, political party or candidate. GOP members of the Senate and many of the editorial boards around the state have jumped on this glaring loophole. Simply put, money is power...
The House remained reasonably efficient this week though Rep. Alvin Holmes (D-Montgomery) did slow things down on a bill by Rep. Dunn (D-Birmingham) to require interlock devices or breathalyzers to be installed in the autos of those convicted of DUI.
—The Alabama Mortgage Act is getting very close to be completed and introduced. The bill aims to regulate mortgage brokers, mortgage lenders, mortgage servicers and mortgage processors. Among the requirements in the bill is a licensing and registration process. ABA attorney Hamp Boles is working with the Department to address our concerns.
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. The bill was discussed in the House Banking and Insurance Committee Wednesday, but was carried over at the call of the chair. To date, only two states have passed some form of this bill. The real issue is satisfying the mortgages of lenders that are no longer is business and where there is no record of assignment. The bill would allow for “self help” satisfactions where a title insurer or attorney could satisfy a mortgage. We will be studying this particular piece of the bill to explore possible solutions.
- 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, which has not yet been placed on a Senate Banking and Insurance Committee agenda.
- This bill is designed to help 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. The problem is the bill places “payee-initiated demand drafts” under the definition of a check in Article Three of the UCC. Several bank attorneys have concluded that there is simply too much uncertainty of unintended consequences with this approach. ABA attorney Hamp Boles drafted a substitute which places the necessary definition in the criminal code.
- 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. This bill was approved by the House Banking and Insurance Committee this week after it was amended to six months.
- 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.
- 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 increases the licensing and penalty fees for the Alabama Securities Commission. Unfortunately, this bill increases the civil penalty the commission may impose from a maximum of $50,000 to a maximum of $1 million. That, along with some other provisions that will need a closer look, will need some adjustment.
- These bills are companion bills and would require Probate Judges to redact or remove Social Security numbers and birth dates from documents presented for recording. ABA amended this bill to limit liability on the person recording the document and to ensure that documents recorded in violation of this act were not invalidated.
- This bill reduces the age of majority from 19 to 18 with certain exceptions. Exception (k) provides that a person under the age of 19 may not enter into a contract for the loan of money. ABA is working to remove this exception.
- Uniform Prudent Management Institutional Funds Act (UPMIFA) The bill addresses a number of topics relating to the management of the funds of charitable organizations and trusts. ABA’s primary concerns relate to the relationship between the UPMIFA and the Uniform Trust Act, which was enacted a few years ago after much work on the part of the banking community. The UPMIFA commentary indicates in a number of places that the act is not intended to apply to charitable trusts managed by corporate trustees. The key defined terms in the act regarding scope are "institution" and "institutional fund." The intent of the bill is to exclude charitable trusts managed by corporate trustee, but it is not sufficiently clear. Although it is doubtful that acting as trustee for charitable trusts is a significant part of business for Alabama banks, ABA wants to ensure that in performing that type of service banks can continue to be governed by the provisions of the Uniform Trust Act.
- These bills were just introduced and deal with data breaches for those who maintain computerized data. They do contain provisions allowing financial institutions to recover damages, and further provides for a private cause of action where a court may award a financial institution actual damages, incidental and consequential damages, and court costs and reasonable attorneys' fees. However, as with last year’s bill, we would like to exempt banks from the reporting and notification requirements.
—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.
—After persuasive lobbying by retailers, House and Senate Judiciary committee leaders are drafting legislation that would limit interchange fees. The credit card industry is already under siege by lawmakers who want to rein in various practices, but a crackdown on interchange fees would be a first at the federal level and could threaten an estimated $36 billion in annual revenue for the industry. House Judiciary Committee Chairman John Conyers is expected to offer an interchange bill with Rep. Chris Cannon, R-Utah. A draft of his bill would create a three-member board of lawyers appointed by the Federal Trade Commission and the Justice Department to regulate interchange rates.
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