On February 28, the capitol was visited by over 200 bankers from IBAT and TBA.  The first-ever joint legislative day was well attended, with informative presentations from LTG Dewhurst, Comptroller Combs, House Financial Institution Committee Chairman Solomons, and Banking Commissioner James.  Attendees also received a joint briefing from IBAT (Neeley and Scurlock) and TBA (Heasley).  Finance Commission Chair John Snider and Savings & Mortgage Lending Commissioner Payne were also present, along with leadership from both organizations.

 

Bankers fanned out, armed with “leave behinds” describing key initiatives of the banking industry this session.  They then participated in an informal luncheon with legislators and staff.  The event gave the banking industry an opportunity to educate legislators about our issues and to create informal “bonding” experiences between bankers and their elected officials.

 

 

HB 944 by Solomons and HB 341 by Leibowitz were both heard in the House Financial Institutions Committee on Monday.  IBAT counsel Neeley presented written information and oral testimony supporting amendments to the Finance Code that would prohibit any FDIC insured institution from branching on the premises of a commercial affiliate.  Some fine tuning is expected in order to assure that “commercial” is carefully defined to avoid unintended consequences for savings banks.  The bill was also supported by testimony from TBA counsel Heasley and supportive cards from the Texas Association of Realtors and others.  There was no public opposition at the hearing, although a member of the Wal-Mart lobby team was in attendance. The bill was left pending, which is the practice of this committee after the first hearing.

 

 

HJR 72 by Solomons has been filed and will be heard soon in House Financial Institutions Committee.  In addition, a stakeholder’s meeting is being scheduled to work out any lingering issues.

 

 

The AG issued an opinion last week, concluding that county clerks would be committing a crime if they provided access to records that include SSNs.  Thus, to be safe, clerks would have to redact the SSNs on copies provided (but not on the originals).  Over the years, SSNs have been added to a variety of records kept by the county and district attorneys including deeds of trust (Fannie/Freddie form had a place for this), probate and divorce proceedings, child support collection (by AG!), tax liens, and more.  The Travis County clerk started the redaction process about a year ago and has redacted SSNs from about 4 million records.  She only has 400 million to go.  Note that there are no funds set aside to pay for this.

 

The real estate industry came to a furious halt.  Landmen were barred by yellow police crime scene tape from reviewing records in order to work on oil and gas leases.  Title abstracters were blocked.  New title policies could not be issued since abstracts could not be updated.  Emergency meetings are being held with MANY affected parties in attendance (including IBAT reps).

 

The AG has put a 60 day hold on the effectiveness of his letter.  This is intended to give the legislature time to come up with a solution.  Rep. Keffer and Sen. Williams have bills to create a fix.  A “public meeting” was held in the House Energy Committee on HB 2061, and the bill was referred for action on the House floor.  IBAT registered in support of the bill, which is expected to move at lightning speed.

 

We are advised that many county clerks still have concerns.  This will continue to be a developing issue.  The opinion letter and follow-up abatement letter can be found here –  http://www.oag.state.tx.us/opinions/ga/ga0519.pdf

 

[In case you are curious, the bill was in the Energy Committee because of the big impact of the lack of record access on the oil and gas industry!]\

 

 

This committee had several bills of interest to the financial services industry this week.  HB 85 by Branch restricts credit card marketing activities at postsecondary educational institutions.  The purpose is to educate students on debt issues before they obtain a card.  Also, marketing would be restricted to certain on-campus booths.  Heasley with TBA spoke against the bill, stating that 60% of students pay off their balance each month.   The bill was left pending.

 

HB 248 by Alonzo would prohibit businesses and lenders from using credit scores in setting terms and rates.  Both IBAT and TBA expressed opposition.  Without this information, borrowers with good credit scores could be lumped in with borrowers with bad credit.  The bill was left pending.

 

HB 887 by Giddings would extend the statute of limitations for credit or debit card abuse to five years.  HB 941 by Byron Cook would increase the penalty for fraudulent use or possession of identifying information.  Both were left pending.

 

HB 901 by Zedler would create a state “no mail” list so that individuals could protect themselves from mailings that included sensitive personal information.  Rep. Zedler is concerned with ID theft based on dumpster diving.  In response to concerns expressed by IBAT, he is amending his bill to provide that mailings that include the name and address of the prospect would not be affected.  The solicitation would have to include sensitive information like SSN, DL number, account number, etc. in order to be affected.  Also, there will be an exception for federally regulated entities.  The language needs tightening; however, since banks bear the brunt of the cost when ID theft occurs, IBAT is working with the author on this.  As our concerns were addressed by the author, IBAT testified to such and was supportive of the bill with our amended language.  Other witnesses, including insurance industry reps, mail carriers, Texas Press, and TBA opposed.  The bill was left pending.

 

 

HB 716 by Solomons will be heard in the House Financial Institutions Committee next Monday.  This bill will be revised to tighten the language to make sure that it does not sanction mere mistakes.  Also, it will impose criminal penalties.  This approach is opposed by the Texas Land Title Association and Texas Association of Realtors, which believe that the existing Penal Code fraud provisions are adequate.  One option, therefore, may be imposing a small fee on each real estate transaction in order to fund prosecution efforts.  Mortgage fraud is increasing in Texas.  IBAT supports reasonable efforts to rein it in.

 

 

As you will recall, HB 914, passed at the last regular session, was an excellent example of a bill with good intentions which created significant problems for the banking industry.  We were pleased to work with Chair Woolley and her Legal Counsel Tessa Zavala on a corrections bill, HB 1491.  We offered to testify in favor of this bill, and our offer was graciously accepted.  IBAT was the only trade association to provide oral testimony in favor of this bill in the Urban Affairs Committee this week.  We very much appreciate the Chair and her staff working with us on this important issue.

 

Whew!  And the session is only about six weeks old...Yes, it is getting more hectic, faster.