Easter break went through Monday of this week, meaning that the House Financial Institutions Committee did not meet.  Like most of the state, Austin was bouncing back from a cold snap.  But emotions were heated at the Capitol, quickly warming everyone up!

 

 

We creep ever closer to acceptable reform in this arena.  As noted in earlier reports, there are lenders who acquire tax liens by paying off delinquent taxes and then refinancing these for the property owners.  The lien has a super priority ahead of existing consensual liens.  The IBAT board has expressed concern that the fees on these transactions be reasonable so that they do not unduly burden the property.  Another concern is the ability of the existing lienholders to pay off these loans.  The tax financers want to keep their loans in place for a minimum of six months in order to maintain their profitability.  The tension, then, is in when the prior lienholders are allowed to pay off tax liens.  We would like this to at least be permissible in the event the existing lien is in default!  Senator Carona’s SB 1476 and Senator Wentworth’s SB 1520 were heard in Senate Jurisprudence on Wednesday.  Negotiations continue with various parties to craft an acceptable compromise on this tenuous issue.

 

More bills; more hearings.  The House Business & Industry Committee heard HB 3222 by Elkins this week, leaving it pending.  This one deals with a business’s duty to protect and safeguard sensitive personal information.  It  would actually help banks recover their losses from breaches created by third parties.  SB 223 by Ellis was posted but not heard in Senate Business & Commerce.  It also deals with breaches but adds loss of information more generally.  Government agencies are added in as well (following losses of info by several universities and governmental entities).  The AG would be required to receive notices of breach and set up a registry to deal with the information.  Only breaches that reasonably could result in risk of ID theft would be affected.

 

Senate Business & Commerce favorably reported SB 987 by Lucio.  This bill requires counseling ten days before a “high risk” residential mortgage loan of $125,000 or less is closed.  This category includes all variable rate loans, loans with a balloon payment, loans with prepayment penalties, and some alternative mortgage products (like interest only and payment option loans).  Counselors can include not only HUD approved counselors but also any attorney in the state.  IBAT testified on this bill, expressing concern that these smaller mortgage loans are often kept in portfolio and thus usually are either an ARM or balloon note.  We suggested that the Finance Commission be given authority to develop alternatives to counseling where appropriate.  This bill is also in a state of flux, and discussions continue with Senate and House sponsors. 

 

HB 3093 by Charlie Howard would permit verification of a customer’s zip code in a credit card transaction (to try to detect ID theft).  This bill was voted favorably by House Business & Industry as were HB 2271 by Bailey (which updates Article 9 of the UCC) and HB 2738 by Solomons (which is a foreclosure procedure clean up bill).