84th TEXAS LEGISLATURE – 2015
INDEPENDENT BANKERS ASSOCIATION OF TEXAS
The Independent Bankers Association of Texas (IBAT) has historically promoted a proactive legislative agenda at each session of the Texas Legislature. Perhaps as important, we are again dealing with a number of legislative initiatives – some well-intentioned – impacting foreclosure processes, fees, taxation, the payments system, credit allocation and a host of other issues. We will remain vigilant and engaged to protect the exclusive interests of the community banking industry.
IBAT will be focusing on the following proactive legislation in the 84th Texas Legislative Session:
Debit Card Surcharge Prohibition. (HB 3240, HB 3442, HB 3619, SB 641) IBAT was successful last session in attaining legislation to prohibit surcharges on debit card transactions. We are attempting to add both rulemaking and enforcement to the law, as there have been some flagrant violations of this statute that continue unabated. This bill is especially important to prevent “steering” of customers to specific cards or forms of payment, which could prove discriminatory toward community banks.
Gift Card Purchase ID Requirement. (HB 3522, SB 1778) Stolen and fraudulent debit and credit cards continue to create problems for both consumers and community banks. As gift cards are the “currency of choice” for criminals, these bills require a photo ID, PIN or zip code for any purchase of a gift card at point of sale using a debit or credit card. HB 3526 includes this provision and further requires the same safeguards on any purchase over $200.
Property Tax Lenders. We continue to receive complaints from bankers who have had issues with property tax lenders. Additionally, there are concerns being raised by consumer advocates that such arrangements are creating additional financial difficulties for already stressed consumers and small businesses. A number of improvements in this troubling area were realized at the last session in SB 247, and other than a requirement to provide accurate and timely payoff information to an existing lienholder, this bill focused on much-needed consumer protections. A number of bills have been introduced to address concerns in this area, including (in no particular order):
- HB 1936 – Requires prior notice by borrower to any existing lienholder
- SB 525 – Requires prior notice by property tax lender to existing lienholder, modifies the 90-day delinquency requirement for payoff by existing lienholder
- HB 3222 – Removes priority lien status of tax lien upon transfer
- HB 3960 – Allows only one property tax loan per property
- SB 1956 – Extensive clean up and makes property tax loan lien inferior to existing liens
- SB 1957 – Prohibits discount points and interest only on property tax loans
- HB 1726 – Requires study to determine percentage of payoffs of property tax loans from existing lienholders
IBAT is supportive of the components of all of these bills and will be working with the various parties involved to move this legislation forward.
Discovery of Records/Subpoena Abuse. (HB 2394, SB 926) It is not uncommon for litigators to request large volumes of records and data from community banks, then fail to reimburse the bank for the production of that information. The identical bills filed will provide more clarity in the law, and allow you to provide these documents only upon payment or posting of an acceptable bond.
Multiple Party Account Payees. (HB 1847, SB 1020) These bills allow for the expansion of the definition of “beneficiary” in multiple party accounts to allow account holders to name their trust as the beneficiary. As a viable alternative to probate, this will benefit those persons who wish to engage in estate planning, using express trusts for disposition of their assets.
Data Security Breach. (HB 3478, HB 3537) IBAT has attempted, over past sessions, to bring some accountability to entities experiencing a security breach resulting in card reissue costs and fraud losses. Both of these bills require prompt notification to both the Attorney General and any affected financial institutions, as well as create a “Data Security Breach Victim Compensation Fund” to reimburse consumers and financial institutions for their costs incurred. A $50 civil penalty, per card, is also included as part of the proposals.
Home Equity. (HJR 128, HJR 131) We are supportive of these initiatives, which exclude from the 3% fee cap any fees paid from the borrower to an unaffiliated third party. This common sense approach will allow financial institutions the ability to profitably book smaller dollar home equity loans.
Patent Trolls. (SB 1187, HB 3176, SB 1457) Several bills have been introduced to provide for some relief designed to minimize the detrimental impact on a number of community banks dealing with patent assertion entities.