Legislature(2007 - 2008)SENATE FINANCE 532

05/12/2007 09:00 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to 01:30 pm --
+= HB 177 NATURAL GAS PIPELINE PROJECT TELECONFERENCED
Moved Out of Committee 5/11/07
+ HCR 6 CIVICS EDUC/ CITIZENS ADVISORY TASK FORCE TELECONFERENCED
Moved SCS CSHCR 6(SED) Out of Committee
+ HB 113 OPTOMETRISTS' USE OF PHARMACEUTICALS TELECONFERENCED
Heard & Held
+ HB 90 CRIMES/CRIM PROCEDURE/SENTENCING TELECONFERENCED
Moved SCS CSHB 90(FIN) Out of Committee
+= HB 162 MORTGAGE LENDING TELECONFERENCED
Moved CSHB 162(FIN) Out of Committee
+ HB 166 CONTRIBUTIONS FROM PERM. FUND DIVIDENDS TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                                                                                                                                
     CS FOR HOUSE BILL NO. 162(L&C)                                                                                             
     "An  Act relating  to  mortgage  lenders, mortgage  brokers,                                                               
     mortgage  originators,  state  agents  who  collect  program                                                               
     administration  fees,  and  other   persons  who  engage  in                                                               
     activities  relating   to  mortgage  lending;   relating  to                                                               
     mortgage loan  activities; relating  to an  originator fund;                                                               
     relating  to fees  for  mortgage  loan transactions;  making                                                               
     certain  violations  unfair  trade  practices;  relating  to                                                               
     persons who are  licensed under the Alaska  Small Loans Act;                                                               
     and providing for an effective date."                                                                                      
                                                                                                                                
                                                                                                                                
This was  the third hearing for  this bill in the  Senate Finance                                                               
Committee.                                                                                                                      
                                                                                                                                
Co-Chair   Stedman  acknowledged   the   significant  amount   of                                                               
testimony this bill has generated.  The Committee has worked with                                                               
the bill's sponsor  Representative Bob Lynn, and  the Division of                                                               
Banking and  Securities in the Department  of Commerce, Community                                                               
and Economic  Development as  well as  Senator Elton's  office to                                                               
develop  a new  committee  substitute.  The committee  substitute                                                               
primarily  corrects   drafting  errors   as  opposed   to  making                                                               
substantive changes.                                                                                                            
                                                                                                                                
Senator  Huggins  moved  to adopt  Finance  committee  substitute                                                               
Version  25-LS0070\T,  Bannister,  dated  May 11,  2007,  as  the                                                               
working document.                                                                                                               
                                                                                                                                
There being  no objection, the  Version "T"  committee substitute                                                               
was ADOPTED as the working document.                                                                                            
                                                                                                                                
10:21:14 AM                                                                                                                   
                                                                                                                                
JESSE KIEHL,  Staff to  Senator Kim  Elton, advised  that Senator                                                               
Elton's  office  had worked  with  the  Division of  Banking  and                                                               
Securities in the Department of  Commerce, Community and Economic                                                               
Development to make technical and  stylist revisions to the bill.                                                               
This   would  include   such  things   as  removing   extraneous,                                                               
duplicative provisions and provisions  not required under current                                                               
law  as  well   as  conforming  language  in  the   bill  to  the                                                               
Legislative drafting manual.                                                                                                    
                                                                                                                                
Mr. Kiehl affirmed  that no substantive policy  changes were made                                                               
in the Version "T" committee substitute.                                                                                        
                                                                                                                                
[NOTE: Amendment #1 was not offered.]                                                                                           
                                                                                                                                
Amendment #2:  This amendment makes  the following  additions and                                                               
deletions to the bill.                                                                                                          
                                                                                                                                
The  phrase  "and  licensee under  AS06.60;  in  this  paragraph,                                                               
'licensee under AS 06.60' has  the meaning given to 'licensee' in                                                               
AS 06.60.990"  in Section 1,  AS 06.01.050(3)  on page 1  line 13                                                               
through page 2 line 2 is  deleted and replaced with the following                                                               
language.                                                                                                                       
                                                                                                                                
           "a licensee under AS 06.60, a small mortgage lender                                                                  
     under  AS 06.60,  and an  originator under  AS 06.60  who is                                                               
     employed by  or works under  exclusive contract for  a small                                                               
     mortgage lender; in this paragraph,                                                                                        
               (A) "licensee under AS 06.60" has the meaning                                                                    
     given to "licensee" in AS 06.60.990;                                                                                       
               (B) "originator under AS 06.60" has the meaning                                                                  
     given to "originator" in AS 06.60.990;                                                                                     
               (C) "small mortgage lender under AS 06.60" has                                                                   
     the  meaning   given  to  "small  mortgage   lender"  in  AS                                                               
     06.60.990;"                                                                                                                
                                                                                                                                
Language  on  page  2  line  10  of  subsection  (b)  of  Section                                                               
06.60.010. License  required. in Article 1.  Licensing., added to                                                               
Section 2 by the addition of  a new chapter, Chapter 60. Mortgage                                                               
Lending Regulation Act., is revised to read as follows.                                                                         
                                                                                                                                
          (b) Except as provided by AS 06.60.017, a person may                                                                  
     not  operate  as an  originator  in  this state  unless  the                                                               
     person is a natural person who is                                                                                          
                                                                                                                                
A  new section  is  also added  to  Article 1  of  Section 2,  as                                                               
amended by the  addition a Chapter 60, following line  30 on page                                                               
3, as follows.                                                                                                                  
                                                                                                                                
          "Sec.   06.60.017.    Small   mortgage    lenders   and                                                               
     originators.   (a)   Notwithstanding   AS   06.60.010,   the                                                             
     department may register                                                                                                    
               (1)  a  person  to  operate as  a  small  mortgage                                                               
     lender;                                                                                                                    
               (2) a  natural person to operate  as an originator                                                               
     for a  small mortgage  lender if the  person is  an employee                                                               
     of,  or  working under  exclusive  contract  for, the  small                                                               
     mortgage lender.                                                                                                           
          (b) To qualify for registration as a small mortgage                                                                   
     lender, a person shall                                                                                                     
               (1) submit  an application  on a  form established                                                               
     by the department;                                                                                                         
               (2) pay a fee of $150;                                                                                           
               (3) certify  that all money used  in the operation                                                               
     of the person's business as  a small mortgage lender belongs                                                               
     to the person  and is not borrowed or  received from another                                                               
     person; and                                                                                                                
               (4)  be approved  by the  department under  (d) of                                                               
     this section.                                                                                                              
          (c) To qualify for registration as an originator under                                                                
     this section, a person shall                                                                                               
               (1) submit  an application  on a  form established                                                               
     by the department;                                                                                                         
               (2) pay a fee of $75;                                                                                            
               (3)  be approved  by the  department under  (d) of                                                               
     this section.                                                                                                              
          (d) Before approving an application of a person under                                                                 
     this section, the department shall determine that                                                                          
               (1) if the person  is applying for registration as                                                               
     a  small  mortgage  lender,  the  financial  responsibility,                                                               
     experience, character,  and general  fitness of  the person,                                                               
     and of  the person's  directors, officers,  members, owners,                                                               
     and other principals, and the  organization and operation of                                                               
     the applicant  indicate that the  business will  be operated                                                               
     efficiently and  fairly, in the  public interest,  and under                                                               
     the law; and                                                                                                               
               (2) the person has not                                                                                           
                    (A) been enjoined by a court of competent                                                                   
          jurisdiction from engaging in an aspect of the                                                                        
          business of providing financial services to the                                                                       
          public; and                                                                                                           
                    (B) within the previous seven years,                                                                        
                         (i) been prohibited by a federal or                                                                    
               state   regulatory   agency  from   engaging   in,                                                               
               participating  in,   or  controlling   a  finance-                                                               
               related    activity   that    involves   providing                                                               
               financial services to the public;                                                                                
                         (ii)   been   convicted,   including   a                                                               
               conviction based  on a  guilty plea  or a  plea of                                                               
               nolo  contendere, of  a  felony  or a  misdemeanor                                                               
               involving     fraud,     misrepresentation,     or                                                               
               dishonesty;                                                                                                      
                         (iii) committed an act, made an                                                                        
               omission,   or   engaged   in  a   practice   that                                                               
               constitutes a breach of a fiduciary duty;                                                                        
                         (iv) made a false material statement on                                                                
               an application submitted under this chapter; or                                                                  
                         (v) violated a provision of this                                                                       
               chapter, a regulation  adopted under this chapter,                                                               
               or an order of the department under this chapter.                                                                
          (e) A registration issued under this chapter remains                                                                  
     in effect for two years after the registration is issued.                                                                  
          (f) A small mortgage lender may renew a registration                                                                  
     by submitting to the department 30 days before the                                                                         
     expiration of the registration                                                                                             
               (1) a  renewal application in the  form and manner                                                               
     established by the department;                                                                                             
               (2) a biennial registration fee of $150; and                                                                     
               (3)  a  report  identifying  any  changes  in  the                                                               
     information provided under (b) of this section.                                                                            
          (g)  An originator may renew a registration as an                                                                     
     originator by submitting to the department 30 days before                                                                  
     the expiration of the licensee's registration                                                                              
               (1)  a renewal application  in the form and manner                                                               
     established by the department;                                                                                             
               (2)  a biennial registration fee of $75; and                                                                     
               (3)    a report  identifying  any  changes in  the                                                               
     information provided under (c) of this section.                                                                            
          (h)  An application under this section is considered                                                                  
     granted  unless,   within  30  days  after   the  department                                                               
     determines  it  has  received a  complete  application,  the                                                               
     department notifies  the applicant  that the  department has                                                               
     denied   the   application   because  of   the   applicant's                                                               
     noncompliance with this section.                                                                                           
          (i) The department may adopt regulations to implement                                                                 
     this section                                                                                                               
          (j) In this section,                                                                                                  
               (1) "registration"  means registration  under this                                                               
     section;                                                                                                                   
               (2) "small mortgage lender" means a person who is                                                                
     registered under this section.                                                                                             
                                                                                                                                
Changes made  to Article 4. Discipline  and Investigation., added                                                               
to Section 2 by the addition of Chapter 60, are as follows.                                                                     
                                                                                                                                
The language "or  a registration under AS  06.60.017" is inserted                                                               
following  "license"  in  subsection (a)  of  Section  06.60.200.                                                               
Disciplinary  action., page  16 line  22 and  "or small  mortgage                                                               
lender" is inserted following "licensee" on page 16, line 23.                                                                   
                                                                                                                                
The  phrase  "or small  mortgage  lender"  is inserted  following                                                               
"licensee"  in Section  06.60.200 subsection  (a)(2) on  page 17,                                                               
line 4 and in subsection (a)(2)(C) on page 17, line 8.                                                                          
                                                                                                                                
The language "or  a registration under AS  06.60.017" is inserted                                                               
following "license" in Section  06.60.200 subsection (a)(2)(E) of                                                               
on page 17 line 10.                                                                                                             
                                                                                                                                
Furthermore, the  words "or the registration  under AS 06.60.017"                                                               
are  added following  "license" in  Section 06.60.200  subsection                                                               
(a)(2)(F),  page  17  line  13.  Also  on  lines  14  and  15  of                                                               
subsection  (F),  the  phrase  "is  not  fit  to  engage  in  the                                                               
activities for which  that licensee was licensed"  is deleted and                                                               
replaced with "or  small mortgage lender is not fit  to engage in                                                               
the  activities for  which  the licensee  was  licenses or  small                                                               
mortgage lender was registered".                                                                                                
                                                                                                                                
In  addition,   the  phrase  "or  the   small  mortgage  lender's                                                               
business" is  inserted following "business" in  Section 06.60.200                                                               
subsection (a)(2)(G) on page 17, lines 18 and 19.                                                                               
                                                                                                                                
The phrase "or  the registration under AS  06.60.017" is inserted                                                               
following "license" in Section  06.60.200, subsection (a)(3) page                                                               
17, line 22.                                                                                                                    
                                                                                                                                
The language ", or the  registration of a small mortgage lender,"                                                               
is inserted following  "licensee" on page 17, line  24 of Section                                                               
06.60.200, subsection  (b). Also in subsection  (b), the language                                                               
".  A person  whose license"  is  deleted and  replaced with  "or                                                               
registered  under  AS  06.60.017.   A  person  whose  license  or                                                               
registration under AS 06.60.017" on page 17, line 27.                                                                           
                                                                                                                                
Furthermore,  the   words  "or  another  registration   under  AS                                                               
06.60.017" are inserted following  "license" in subsection (b) on                                                               
page 17, line 28.                                                                                                               
                                                                                                                                
The  words "or  a registration  of a  small mortgage  lender" are                                                               
inserted  following "license"  in Section  06.60.230. Divestment.                                                               
of Article 4, page 18 line 11.                                                                                                  
                                                                                                                                
Also  in Section  06.60.230, the  phrase "or  the small  mortgage                                                               
lender" is inserted following "licensee"  on page 18, line 12 and                                                               
the  words  "or small  mortgage  lender"  are inserted  following                                                               
"licensee" on page 18, line 13.                                                                                                 
                                                                                                                                
The  words "of  revoked license"  are deleted  from the  title of                                                               
Section 06.60.240.  Reinstatement of revoked license"  on page 18                                                               
line 15  of Article 4.  The revised heading would  therefore read                                                               
Section 06.60.240. Reinstatement.                                                                                               
                                                                                                                                
Also in  Section 06.60.240, the  words "if the licensee"  on page                                                               
18, line 16  are deleted and the words "or  registration under AS                                                               
06.60.017  if   the  licensee  or  small   mortgage  lender"  are                                                               
inserted.                                                                                                                       
                                                                                                                                
On  page  18 line  18  of  that same  section  the  words ",  the                                                               
licensee" are  deleted and replaced  with "or  registration under                                                               
AS 06.60.017, the licensee or small mortgage lender".                                                                           
                                                                                                                                
The words  "or a  small mortgage  lender" are  inserted following                                                               
"chapter" in  subsection (a) of Section  06.60.250. Investigation                                                               
and  examination. of  Article  4,  page 18,  line  22. That  same                                                               
language   is  inserted   in  that   same  subsection   following                                                               
"licensee" on page 18, line 27.                                                                                                 
                                                                                                                                
Furthermore,  the   words  "or   small  mortgage"   are  inserted                                                               
following "licensee" in Section  06.60.250., subsection (b)(1) on                                                               
page 18, line 31 and in subsection (b)(2) on page 19, line 1.                                                                   
                                                                                                                                
A new  paragraph is added following  language on page 17,  line 3                                                               
of Article 4 as follows.                                                                                                        
                                                                                                                                
               "(2) the small mortgage lender has violated a                                                                    
     provision of this chapter applicable to the small mortgage                                                                 
     lender;"                                                                                                                   
                                                                                                                                
Changes to  Article 5. Business  Duties and  Restrictions., added                                                               
to Section 2 by the addition of Chapter 60, are as follow.                                                                      
                                                                                                                                
The phrase  ", including  a small  mortgage lender,"  is inserted                                                               
following  "person" on  page  20, line  9  in Section  06.60.320.                                                               
False, misleading, or deceptive advertising prohibited.                                                                         
                                                                                                                                
Also  added to  Section 06.60.320  is the  phrase ",  including a                                                               
small mortgage lender," following "person" on page 20, line 13.                                                                 
                                                                                                                                
Added to  Section 06.60.340. Prohibited activities.  of Article 5                                                               
on  page  20,  line  26  following the  word  "chapter,"  is  the                                                               
language "a person who is a small mortgage lender,".                                                                            
                                                                                                                                
In  addition,  the  word "registration,"  is  inserted  following                                                               
"license," on page  22, line 10, of  Section 06.60.340 subsection                                                               
(10).                                                                                                                           
                                                                                                                                
The  phrase  "or small  mortgage  lender"  is inserted  following                                                               
"licensee,"  on page  24, line  1  in subsection  (a) of  Section                                                               
06.60.370. Criminal liability of licensee.                                                                                      
                                                                                                                                
Also,  in  subsection (b)  of  Section  06.60.370, the  words  ",                                                               
including  a  small  mortgage  lender,"  are  inserted  following                                                               
"person" on page 24, line 5.                                                                                                    
                                                                                                                                
Furthermore, in  subsection (c) of  Section 06.60.370,  the words                                                               
",  person  who  is  a   small  mortgage  lender,"  are  inserted                                                               
following "licensee" on page 24, line 7.                                                                                        
                                                                                                                                
In subsection  (d) of  Section 06.60.370, the  words "or  a small                                                               
mortgage lender"  are inserted following  "licensee" on  page 24,                                                               
line 11.                                                                                                                        
                                                                                                                                
Finally, in subsection  (e) of Section 06.60.370, the  words " or                                                               
without  being  registered  under  AS  06.60.017,"  are  inserted                                                               
following "license" on page 24, line 14.                                                                                        
                                                                                                                                
Changes made  to Article 6.  Enforcement., added to Section  2 by                                                               
the addition of Chapter 60, are as follows.                                                                                     
                                                                                                                                
The words  ", including  a small  mortgage lender,"  are inserted                                                               
following  "person"  in  Section   06.60.400.  Cease  and  desist                                                               
orders. on page 24, line 21.                                                                                                    
                                                                                                                                
In subsection  (a) of Section 06.60.410.  Censure, suspension, or                                                               
bar.  of Article  6, the  phrase "suspend  the registration  of a                                                               
small mortgage lender  for a period not to exceed  12 months," is                                                               
inserted following  "months," on page  24, line 25.  In addition,                                                               
the words  "or a  small mortgage  lender" are  inserted following                                                               
"licensee" on page 24, line 26.                                                                                                 
                                                                                                                                
The  words  ",  to  the  small  mortgage  lender,"  are  inserted                                                               
following "licensee"  in subsection  (a)(3) of  Section 06.60.410                                                               
on page 24, line 30                                                                                                             
                                                                                                                                
In  subsection   (b)  of  Section   06.60.410,  the   phrase  "or                                                               
registration as  a small mortgage  lender" is  inserted following                                                               
"license" on page 25, line 3.                                                                                                   
                                                                                                                                
Furthermore, in  subsection (c) of  Section 06.60.410,  the words                                                               
"or a  small mortgage lender"  are added following  "licensee" on                                                               
page 25, line  6. Also in subsection (c), the  words "licensee is                                                               
conducting  the licensee's  business"  are  deleted and  replaced                                                               
with  "licensee  or  small  mortgage  lender  is  conducting  the                                                               
licensee's or small mortgage lender's  business", on page 25 line                                                               
7.                                                                                                                              
                                                                                                                                
Finally in subsection (c) the  words "or a small mortgage lender"                                                               
are inserted following "licensee" on page 25, line 9.                                                                           
                                                                                                                                
Language in  subsection (a) of  Section 06.60.420.  Civil penalty                                                               
for  violations. of  Article  6  is also  changed.  The words  ",                                                               
including a  small mortgage lender," is  added following "person"                                                               
on page 25, line 10.                                                                                                            
                                                                                                                                
Language  in  subsection  (a) of  Section  06.60.430.  Additional                                                               
enforcement  provisions, actions,  and  rights. of  Article 6  is                                                               
also  changed.  The  words  "or  a  small  mortgage  lender"  are                                                               
inserted following "licensee" on page 25, line 17.                                                                              
                                                                                                                                
Also  in subsection  (c) of  Section  06.60.430, the  words ",  a                                                               
small  mortgage lender,"  are  inserted  following "licensee"  on                                                               
page  25, line  21. In  addition, "or  small mortgage  lender" is                                                               
inserted following "licensee" on page 25, line 22.                                                                              
                                                                                                                                
A new section is inserted into  Article 6 following line 30, page                                                               
25 as follows.                                                                                                                  
                                                                                                                                
          "Sec. 06.60.440. Definition. In AS 06.60.400 -                                                                      
     06.60.440, "small mortgage lender" includes a natural                                                                      
     person who is an employee of, or working under exclusive                                                                   
     contract for, a small mortgage lender."                                                                                    
                                                                                                                                
Changes made  to Article 10. Miscellaneous  Provisions., added to                                                               
Section 2 by the addition of Chapter 60 are as follows.                                                                         
                                                                                                                                
The phrase  ", including  a small  mortgage lender,"  is inserted                                                               
following the first occurrence of  "person" in Section 06.60.890.                                                               
Application to Internet activities. on page 32, line 23.                                                                        
                                                                                                                                
In addition,  the words ",  including a small mortgage  lender to                                                               
the extent this chapter applies  to a small mortgage lender," are                                                               
added   following   "person"   in  Section   06.60.905.   Untrue,                                                               
misleading, or false statements. on page 33 line 3.                                                                             
                                                                                                                                
Finally, the last change made by  the amendment is to Article 11.                                                               
General Provisions.,  added to  Section 2 by  Chapter 60,  is the                                                               
insertion of  the phrase  "(26) "small  mortgage lender"  means a                                                               
person  registered  under   AS  06.60.017"  following  "purposes"                                                               
following line 7 on page 37.                                                                                                    
                                                                                                                                
Senator Huggins moved Amendment #2.                                                                                             
                                                                                                                                
Co-Chair Stedman objected for discussion.                                                                                       
                                                                                                                                
10:22:39 AM                                                                                                                   
                                                                                                                                
MARK  DAVIS,   Director,  Division   of  Banking   &  Securities,                                                               
Department  of  Commerce,   Community  and  Economic  Development                                                               
explained  that this  amendment would,  in essence,  establish an                                                               
exemption  for persons  who make  six  or less  mortgage loans  a                                                               
year. "This is essentially a private banking exemption."                                                                        
                                                                                                                                
Mr.  Davis clarified  however,  that the  person  would still  be                                                               
subject to  the examination and enforcement  provisions specified                                                               
in the bill. This is  important because activities in the private                                                               
banking category are currently unregulated.                                                                                     
                                                                                                                                
Mr. Davis considered  the exemption provided by  the amendment to                                                               
be "a workable  solution" in regards to  these individuals. While                                                               
this  limited exemption  would allow  these  persons to  continue                                                               
their  commercial and  residential lending  activities, it  would                                                               
now require them  to meet both federal and  State regulations, be                                                               
subject  to  examinations,  and  to  be  held  liable  for  civil                                                               
penalties if they  violate the Act. This  would prevent predatory                                                               
lending activities from occurring.                                                                                              
                                                                                                                                
10:24:17 AM                                                                                                                   
                                                                                                                                
Senator Thomas asked the definition of "person" in this case.                                                                   
                                                                                                                                
Mr. Davis  clarified that the  reference to "person"  would apply                                                               
to "either a legal entity or a natural person".                                                                                 
                                                                                                                                
Senator  Thomas understood  therefore that  this exemption  could                                                               
apply to an entity other than a person.                                                                                         
                                                                                                                                
Mr. Davis  affirmed. For  instance, it could  apply to  a limited                                                               
liability  company provided  certain terms  were met.  The entity                                                               
being  exempted must  be putting  its  "own money  at risk",  not                                                               
money that  had been borrowed.  This is a very  important element                                                               
in the amendment.                                                                                                               
                                                                                                                                
10:25:06 AM                                                                                                                   
                                                                                                                                
Senator   Thomas   understood   that  the   maximum   number   of                                                               
transactions that could occur would be six.                                                                                     
                                                                                                                                
Mr. Davis  responded that  the requirement of  "six or  less" was                                                               
deemed appropriate.                                                                                                             
                                                                                                                                
Co-Chair Stedman asked  whether the Department was  in support of                                                               
the amendment.                                                                                                                  
                                                                                                                                
Mr. Davis responded in the affirmative.                                                                                         
                                                                                                                                
10:25:25 AM                                                                                                                   
                                                                                                                                
Senator  Olson  asked  whether   anyone  from  the  industry  was                                                               
available to  address the  amendment as  the nine  page amendment                                                               
appeared to be a complicated one.                                                                                               
                                                                                                                                
10:26:04 AM                                                                                                                   
                                                                                                                                
Co-Chair Stedman  asked whether  anyone from the  industry wished                                                               
to testify to the amendment.                                                                                                    
                                                                                                                                
No one came forward.                                                                                                            
                                                                                                                                
Senator Olson considered  that to indicate there  was no industry                                                               
concern to the amendment.                                                                                                       
                                                                                                                                
Co-Chair Stedman removed his objection.                                                                                         
                                                                                                                                
Without further objection, Amendment #2 was ADOPTED.                                                                            
                                                                                                                                
10:27:27 AM                                                                                                                   
                                                                                                                                
Amendment #3: The  amendment deletes the entirety  of language in                                                               
subsection  (8)(B) of  Section 06.60.340.  Prohibited activities.                                                               
under Article  5. Business Duties  and Restrictions, on  page 21,                                                               
line 30 through page  22, line 1, added to Section  2 of the bill                                                               
by  Chapter 60.  Mortgage  Lending Regulation  Act. The  language                                                               
being deleted reads as follows.                                                                                                 
                                                                                                                                
                    (B) the person funds the loan at the rate,                                                                  
     terms, and costs  state in the good  faith estimate provided                                                               
     to the borrower at the  time the prequalification letter was                                                               
     issued or the loan commitment was made;                                                                                    
                                                                                                                                
The  amendment also  allows for  technical changes  in subsection                                                               
(8) resulting from the removal of subsection (B).                                                                               
                                                                                                                                
Senator Elton moved Amendment #3.                                                                                               
                                                                                                                                
Co-Chair Stedman objected for discussion.                                                                                       
                                                                                                                                
AT EASE: 10:27:51 AM / 10:29:09 AM                                                                                          
                                                                                                                                
Mr.  Davis explained  that this  amendment would  remove language                                                               
that allowed  a person to provide  a "cure" for a  falsehood they                                                               
made  in   a  commitment  letter.  The   Division  supported  the                                                               
amendment.                                                                                                                      
                                                                                                                                
Co-Chair Stedman removed his objection.                                                                                         
                                                                                                                                
There being no further objection, Amendment #3 was ADOPTED.                                                                     
                                                                                                                                
10:29:54 AM                                                                                                                   
                                                                                                                                
CHRIS  SKINNER,  Owner,  Kelstar   Alaska  Mortgage  Company  and                                                               
President, Alaska Association of  Mortgage Brokers, testified via                                                               
teleconference from  Mat-Su and  informed the Committee  that she                                                               
had provided written  testimony [copy not on file]  in support of                                                               
the bill provided it did  not contain any language recommended by                                                               
the American Financial Services Association (AFSA).                                                                             
                                                                                                                                
10:31:01 AM                                                                                                                   
                                                                                                                                
Senator Thomas  asked what was  referred to under  Alaska Statute                                                               
(AS)  06.20,  as  referenced  in the  definition  of  a  "covered                                                               
person" on page 24 line 16 of the bill.                                                                                         
                                                                                                                                
Mr.  Davis stated  that AS  06.20 referred  to the  State's Small                                                               
Loan Act.                                                                                                                       
                                                                                                                                
Senator Thomas acknowledged.                                                                                                    
                                                                                                                                
10:32:05 AM                                                                                                                   
                                                                                                                                
Co-Chair  Hoffman  moved  to   report  Senate  Finance  committee                                                               
substitute for  HB 162, Version  25-LS0070\T from  Committee with                                                               
individual recommendations and  accompanying fiscal notes. [NOTE:                                                               
The  motion did  not include  a reference  to the  two amendments                                                               
adopted  by  the  Committee;  however,  that  was  the  Committee                                                               
intent.]                                                                                                                        
                                                                                                                                
There being  no objection, SCS  CS HB 162(FIN) was  REPORTED from                                                               
Committee with three  previous fiscal notes: zero  fiscal note #1                                                               
from the  Department of  Law, indeterminate  fiscal note  #2 from                                                               
the  Department of  Administration, and  $377,500 fiscal  note #3                                                               
from  the   Department  of   Commerce,  Community   and  Economic                                                               
Development.                                                                                                                    
                                                                                                                                
AT EASE 10:32:37 AM / 10:34:40 AM                                                                                           
                                                                                                                                

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