At last!  The 60th day has come and gone.  No more bills can be filed without special, super majority permission.  Here is a chart showing the number of bills filed:

 

	2007	2005	# Change	% Change
House Bills	3977	3474	+503	+14%
Senate Bills	1944	1789	+155	+9%
Combined	5921	5263	+658	+13%

 

At this time, IBAT has 229 bills in its tracking sights.  Many of these will never get to a committee hearing.  Some will be intensively lobbied by the general business lobby.  That still leaves us with a big job of following the matters that impact community banks day to day.

 

Here is the action this week from the House Financial Institutions Committee.

 

 

HB 345 by Flynn was heard Monday.  The IBAT board, after much input and debate, had decided to oppose this concept.  Willard Still, CEO of American Bank, Waco and David Williams, CEO of HCSB testified on matters of concern including a basic philosophical position that this change would allow the mega banks to dominate the field of public fund depositories.  Basically, the bill (as substituted) would permit a bank or two or more banks to deposit securities into a pool with the Comptroller of Public Accounts.  The bank could then pledge interests in that pool as collateral with different local governmental entities.  Still noted that it took little time for a bank employee to manage the collateral right now.  However, the Comptroller would be charging a fee for this service.  Thus, possible cost savings could be offset by increased fees.  Neither the FHLB nor the Fed could be custodians for securities under the bill.  (This is likely to be changed!)  Also, the potential for cross collateralization appears to be in the bill.

 

The bill was also opposed by the Travis County Treasurer, the County Treasurers Association and the Government Treasurers Organization of Texas.  These groups were concerned about the lack of controls and reporting in the bill.  On the other hand, the bill was supported by TBA.

 

IBAT and others recommended that public fund depository issues, including this one, be the subject of an interim study with input from all stakeholders.  The bill was left pending.

 

 

HB 1795 by Veasey would permit ATM operators to offer users the ability to input their PIN in inverse order and alert law enforcement or obtain a smaller amount of cash in a robbery situation.  IBAT’s Neeley testified in opposition.  The ready availability—and utility—of this technology is still an urban legend at this time.  If it is enthroned into law, we fear that customers will falsely believe that they can do this reverse PIN maneuver and summon help.  TBA testified as neutral.  The bill sponsor is working on an amendment that would empower the Finance Commission to issue regulations on ATM security and emerging technology.  IBAT thanks PULSE’s Cindy Ballard for her timely and helpful information on this issue!

 

 

Last, but certainly not least, the committee heard testimony on HJR 72, a constitutional amendment that would fix some of the issues raised in the ACORN (Finance Commission interpretations), Box (debt consolidation) and Marketic (ag use valuation) cases.  Neeley provided an overview of the changes.  In particular, the difference between interest (which includes points) and fees was drawn for the legislators.  Consumer advocates expressed opposition to drawing a clearer distinction between interest and fees.  They believe that the only interest to be excluded from the 3% fee cap should be the note rate!  (That would violate the federal preemption of state usury laws.)  They also expressed concern about ANY type of check used for a HELOC draw, opposition to affidavits in debt consolidation requests, confusion over blanks that could be left in preprinted loan docs, and opposition to use of powers of attorney to close home equity loans.  They still want EVERY piece of paper in the lender’s file to be copied at closing and given to the borrower.  And they want the lender to absorb any increase in costs between the early HUD 1-A and the final closing statement.  Much to our amazement, the Texas Association of Realtors testified as “neutral” on the bill but stated that they agreed with the consumer advocate’s concerns!

 

 

Chairman Solomons has brought the various interested parties together to discuss the home equity changes as well as proposals on mortgage fraud.  So far, no punches have been thrown…

 

 

Kudos to Rep. Woolley!  Her bill, HB 1491, has already gotten out of committee and to the House floor.  It has received favorable votes on two readings and is well on its way to passage.  This amendment to chapter 176 of the Local Government Code would exclude banks from coverage.  Rep. Woolley understands that banks are already subject to intensive conflict of interest rules.

 

 

Thanks to everyone who responded to last week’s survey.  The information has been shared with the Defense Affairs Committee.  IBAT has developed an alternative solution to the problem of guards and reservists who are worried about their debts.  We recommend reinforcing the federal Servicemembers Civil Relief Act with enforcement in the Texas Debt Collection Practices Act.

 

 

IBAT’s proposal for clearer rules on service of process on banks should get a hearing.  Stay tuned.