Although the next regular session of the Texas Legislature does not start until January 9, 2007, legislators are already pre-filing bills (as permitted by law).  Over 500 are in the hopper so far.  IBAT has over a dozen of these in its tracking list!  As the activity heats up, IBAT will provide regular Capitol Reports as part of the weekly e-newsletter to keep you informed of developments.

AFFIRMATIVE AGENDA

ILCs and Branching.  On the plus side, a bill has been filed that would provide that FDIC insured institutions (which include ILCs) could NOT put branches in commercial affiliates (e.g. Wal-Mart and Home Depot stores).  Although HB 341 has been filed by Rep. Leibowitz, we expect that House Financial Institutions Committee chairman Burt Solomons will take the lead in this matter.  [Yes, we know that committees have not been formed yet, but we expect that Solomons will return to the center seat!]  Rep. Leibowitz is also passionate on this issue which is most appreciated.  The bill does NOT discriminate between different types of financial institutions, a provision that is required by the Riegle Neal Interstate Banking & Branching Act.  With Wal-Mart acquiring a bank in Mexico, we expect this issue to be hotly contested in this large, important border state.

Pooled Collateral for Public Funds.  Rep. Flynn (previously deputy banking commissioner) has filed HB 345, which would allow the Comptroller of Public Accounts to develop rules for pooling securities to collateralize public fund deposits.  Comparable provisions are in place in about a dozen other states.  The objective is to reduce the cost of bidding on public funds by permitting a bank to pledge a bundle of securities and then utilize that "pool" to meet pledging requirments for a variety of entities.  Supporters indicate this method is more efficient and avoids over-collateralization.  The Comptroller will assess a fee for this service.  IBAT's Board will fully address this issue at their meeting on December 8.  If you have thoughts about this, please contact Steve Scurlock at 800.749.4228 (or e-mail at sscurlock@ibat.org ) with your comments!

EMERGING ISSUES

On the negative side, we are already seeing some problems from last session resurfacing.  We believe that we will be able to work through the process...again...to develop better options.  Meanwhile, here are some of the issues that concern us at this time.

Privacy/ID Theft.  An array of bills have already been filed that would prevent banks from using social security numbers in certain contexts (like credit reports), prohibit use of biometrics (which the federal banking regulators are pushing!), and generally increase privacy duties.  We expect to see more bills in the area of ID theft as well, including new processes for check verification.

Wire Transfer Fee.  Two different bills, using different approaches, have been filed in the house and senate dealing with fees on monetary transmissions.  The fees would apply to bank initiated transactions as well as those by money transmitters.  The transmissions would include wires, ACH, stored value cards, money orders, and more.  The fee would be used to help fund indigent medical care.  The rationale is that illegal immigrants are using hospital ERs, that these individuals are using the money transmission systems to remit funds home, and that this fee would be one way to indirectly get these individuals to fund a portion of their medical care costs.  The major flaw with that is the scope of these bills. They would apply to EVERY transaction, including commercial wire transfers.

Servicemembers Relief.  A bill has been refiled that would prevent creditors from collecting on debts when a person has been activated in the military.  The deferral period would extend to six months after release from duty.  No interest could accrue during this period either!  Also, dependents could take advantage of this relief.  IBAT strongly supports our brave servicemembers who sacrifice much in order to serve their country.  However, we believe that federal law is adequate in this area.