Legislature(2001 - 2002)
04/03/2001 01:30 PM Senate L&C
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ALASKA STATE LEGISLATURE
SENATE LABOR & COMMERCE COMMITTEE
April 3, 2001
1:30 pm
MEMBERS PRESENT
Senator Randy Phillips, Chair
Senator Alan Austerman
Senator Loren Leman
Senator John Torgerson
Senator Bettye Davis
MEMBERS ABSENT
All Members Present
COMMITTEE CALENDAR
SENATE BILL NO. 66
"An Act relating to the authorizations for state financial
institutions; relating to confidential financial records of
depositors and customers of certain financial institutions;
relating to the Alaska Banking Code, Mutual Savings Bank Act,
Alaska Small Loans Act, and Alaska Credit Union Act; and providing
for an effective date."
MOVED CSSB 66 (L&C) OUT OF COMMITTEE
SENATE BILL NO. 50
"An Act extending the termination date of the Board of Veterinary
Examiners."
MOVED SB 50 OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
SB 66 - See Labor and Commerce minutes dated 2/20/01,
3/15/01 and 3/29/01.
SB 50 - No previous action to consider.
WITNESS REGISTER
Mr. Terry Elder, Director
Division of Banking and Securities
Department of Community and Economic Development
P. O. Box 110807
Juneau AK 99811
POSITION STATEMENT: Commented on SB 66.
Ms. Lisa Bell
Alaska Bankers Association
2094 Jordan Ave.
Juneau AK 99801
POSITION STATEMENT: Supported SB 66.
Mr. Steven Conn, Executive Director
Alaska Public Interest Research Group (AKPIRG)
P.O. Box 101093
Anchorage AK 99510
POSITION STATEMENT: Opposed the opt-out provision in SB 66.
Ms. Deanna Jo Thornell, D.V.M.
Chair, Board of Veterinary Examiners
702 Peger Road
Fairbanks, AK 99709
POSITION STATEMENT: Supported SB 50.
ACTION NARRATIVE
TAPE 01-15, SIDE A
Number 001
SB 66-FINANCIAL INSTITUTIONS
CHAIRMAN RANDY PHILLIPS called the Senate Labor & Commerce
Committee meeting to order at 1:30 pm and announced SB 66 to be up
for consideration. He said it was his understanding that both the
department and the banking industry agree with the bill, minus the
opt-in/opt-out provision.
MR. TERRY ELDER, Director, Division of Banking, Securities and
Corporations, said that was correct. "We have no problem with any
other part of the bill other than the privacy provision."
MS. LISA BELL, Alaska Bankers Association, said they are also
comfortable with the bill and the privacy provision that is in it.
MR. ELDER said their specific objection is on page 2, lines 25 and
26, and they would want to delete (a)(3) which brings in the opt-
out provision of GLBA.
MR. STEVE CONN, Executive Director, Alaska Public Interest Research
Group, said:
Back when the stock market was making us all rich, it
seemed like a great idea to break down the walls between
the banks that are federally insured and the various
companies and what these companies like to call their
families, which is to say the insurance companies, the
stock brokerages. But I can assure you that with the
crash that is now upon us, there will be a revisitation
of that. There are many negative ramifications to this,
but most assuredly, one of these has to do with the
subject of opt-out and opt-in. The material that most of
us are receiving in the mail from our very fine financial
institutions, and I received one from Key Bank which I
shared with you, makes it impossible and improbable for
the idea that any consumer will understand or be able to
exercise their right to opt-out of information sharing
amongst the various institutional families involved. This
is a very negative thing, because the consumers,
particularly those who are elderly, are still of the
opinion that when they see something that's labeled Key
Bank, Chase Bank, American Express, that that happens to
be their banking instrument. Something that says Chase is
a bank. Well, something that says Chase may well be a
financial institution that has a high-risk instrument
that is not federally insured or one that a year ago
might not have been high risk, but today is with that
company looking at skirting bankruptcy with diminished
stock is high risk. All consumer advocates who are not
connected to financial institutions are very much of the
opinion that opt-in should be required and that opt-out
is a choice without any true meaning.
MR. CONN said he shared with the Chairman the actual materials he
received from Key Bank, especially when he heard a Key Bank
official had testified. He asked the Chairman to share it with the
committee members and have them try to figure out how to opt-out
and call the 800 number, "when it's very deep in the bowels of that
notice and when you call, the person will answer, 'What do you
want?' You would have to actually affirmatively push them into the
process whereby you are allowed to opt-out."
MR. CONN said, "Alaskans really need some protection. Our financial
information does need protection, including families. These
families that the corporations talked about are, in fact, massive
conglomerates of financial institutions."
Number 700
MS. JULIE BAILEY, Northrim Bank, stated the non-deposit investment
products and non-insured products have very strict disclosures that
are required. She said that Northrim is a very small state bank and
doesn't have a lot of affiliates. They are able to take care of any
calls that come in from anyone who wishes to opt-out easily.
CHAIRMAN TORGERSON moved to adopt the 22GS1026\LBanister10/2/01 CS
to SB 66.
CHAIRMAN PHILLIPS declared a conflict of interest, because he works
for a mortgage company that does some indirect business with
Northrim.
SENATOR TORGERSON objected.
There were no objections to the committee substitute to SB 66 being
adopted and it was so ordered.
SENATOR AUSTERMAN moved amendment #1 that deletes language on page
2, lines 25 - 26, relating to the opt-out issue. He said, "I think
it should be the bank's responsibility to get us to give them the
waiver rather than us having the responsibility of going to the
bank and giving them our waiver [indisc]. I think it should be on
the banks' back to do that rather than the citizens' responsibility
to know what the bank is doing. They just pass laws and expect the
public to know what's going on."
SENATORS DAVIS and AUSTERMAN voted yeah; SENATORS TORGERSON, LEMAN,
AND PHILLIPS voted nay; and amendment #1 failed.
SENATOR TORGERSON moved to pass CSSB 66 (L&C) from committee.
SENATOR AUSTERMAN objected. SENATORS TORGERSON, DAVIS, LEMAN and
PHILLIPS voted yeah; SENATOR AUSTERMAN voted nay; and CSSB 66 (L&C)
pass from committee.
SB 50-EXTENDING BOARD OF VETERINARY EXAMINERS
SENATOR ELTON, sponsor, read from the Legislative Budget and Audit
Report:
In our opinion the Board of Veterinary Examiners is
operating in an efficient and effective manner and should
continue to regulate veterinarians. We believe the Board
is safeguarding a public interest by insuring the
competence and integrity of those who hold themselves out
to the public as practitioners of veterinary medicine.
MS. DEANNA THORNELL, Chair, Board of Veterinary Examiners,
supported SB 50.
SENATOR TORGERSON moved to pass SB 50 from committee with
individual recommendations along with whatever fiscal note that
comes with it. There were no objections and it was so ordered.
CHAIRMAN PHILLIPS adjourned the meeting a 1:48 pm.
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