02/19/2025 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| Presentation: How Workers' Compensation Works | |
| SB39 | |
| SB98 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | SB 98 | TELECONFERENCED | |
| *+ | SB 39 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
February 19, 2025
1:31 p.m.
MEMBERS PRESENT
Senator Jesse Bjorkman, Chair
Senator Kelly Merrick, Vice Chair
Senator Elvi Gray-Jackson
Senator Forrest Dunbar
Senator Robert Yundt
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
PRESENTATION: HOW WORKERS' COMPENSATION WORKS
- HEARD
SENATE BILL NO. 39
"An Act relating to loans in an amount of $25,000 or less;
relating to the Nationwide Multistate Licensing System and
Registry; relating to deferred deposit advances; and providing
for an effective date."
- HEARD & HELD
SENATE BILL NO. 98
"An Act extending the termination date of the Board of
Veterinary Examiners; and providing for an effective date."
- MOVED SB 98 OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: SB 98
SHORT TITLE: EXTEND BOARD OF VETERINARY EXAMINERS
SPONSOR(s): LABOR & COMMERCE
02/12/25 (S) READ THE FIRST TIME - REFERRALS
02/12/25 (S) L&C, FIN
02/17/25 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
02/17/25 (S) Heard & Held
02/17/25 (S) MINUTE(L&C)
02/19/25 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SB 39
SHORT TITLE: LOANS UNDER $25,000; PAYDAY LOANS
SPONSOR(s): DUNBAR
01/10/25 (S) PREFILE RELEASED 1/10/25
01/22/25 (S) READ THE FIRST TIME - REFERRALS
01/22/25 (S) L&C, FIN
02/19/25 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
CHARLES COLLINS, Director
Division of Workers' Compensation
Department of Labor and Workforce Development (DLWD)
Juneau, Alaska
POSITION STATEMENT: Provided a presentation on how workers'
compensation works.
TREVOR STORRS, CEO
Alaska Children's Trust (ACT)
Anchorage, Alaska
POSITION STATEMENT: Testified by invitation on SB 39.
ASHLEY URISMAN, Director
State Government Affairs
American Fintech Council (AFC)
Washington, DC
POSITION STATEMENT: Testified by invitation on SB 39.
CLAIRE LUBKE, Economic Justice Lead
Alaska Public Interest Research Group (AKPIRG)
Anchorage, Alaska
POSITION STATEMENT: Testified by invitation on SB 39.
MATT CHURCHILL, Staff
Senator Jesse Bjorkman
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided a brief recap of SB 98.
ACTION NARRATIVE
1:31:43 PM
CHAIR BJORKMAN called the Senate Labor and Commerce Standing
Committee meeting to order at 1:31 p.m. Present at the called to
order were Senators Merrick, Gray-Jackson, Dunbar, Yundt and
Chair Bjorkman.
^PRESENTATION: HOW WORKERS' COMPENSATION WORKS
PRESENTATION: HOW WORKERS' COMPENSATION WORKS
1:32:43 PM
CHAIR BJORKMAN announced the presentation How Workers'
Compensation Works.
1:33:03 PM
CHARLES COLLINS, Director, Division of Workers' Compensation,
Department of Labor and Workforce Development, Juneau, Alaska,
provided a presentation on how workers' compensation works and
moved to slide 2. He provided information on an organization
called Kids Chance. This organization is made up of those that
are involved in the workers' compensation system including
employers, adjusters, attorneys, insurers, and others. The
organization holds an annual training event charging employees
to attend. The proceeds to fund scholarships for children of
injured workers. This event has been very successful. He stated
that he was thrilled when Alaska became the 50th state with a
chapter two years ago.
1:34:49 PM
MR. COLLINS moved to slide 3, What is Workers' Compensation. He
stated that Alaska law clearly defines workers' compensation as
an illness or death arising out of or during employment [AS
23.30.095]. He stated that workers' compensation is a no-fault
system and if you're injured at work, you don't need to prove
negligence to receive benefits like medical coverage or lost
wages. All Alaska employers that have an employee must carry
workers' compensation. He said the system, based on principles
from Larson's legal text, shifts liability to the employer while
recognizing the risks of work. The no-fault system is designed
to avoid court and provide quick support to injured workers.
1:36:58 PM
MR. COLLINS moved to slide 4, History of Workers' Compensation.
He stated that workers' compensation has existed for thousands
of years, evolving with political systems. He said in the U.S.;
it wasn't until the early 1900s that formal laws emerged. The
federal government initially covered some workers, like the
railroad employees. He stated that Wisconsin was the first state
to implement a successful system, making it the oldest form of
social insurance in the U.S. predating Social Security and
unemployment benefits. He stated that workers' compensation has
changed a lot over time.
1:38:12 PM
MR. COLLINS moved to slide 5, Why Workers' Compensation. He
stated that workers' compensation emerged during the Industrial
Revolution in response to the "unholy trinity of defenses" that
made it nearly impossible for injured workers to get help. He
said in the feudal era, if a person was hurt on the job, you
were simply out of luck, no medical aid or support. The
unfairness led to unrest, and eventually, leaders recognized the
need for change.
1:39:11 PM
MR. COLLINS moved to slide 6, Alaska Workers' Compensation, and
provided a history of compensation since it began in 1913.
1:44:14 PM
MR. COLLINS moved to slide 7, Alaska Statute 23.30.001
Legislative Intent, and stated that Alaska workers' compensation
today is guided by the legislative intent in AS 23.30.001: to
deliver quick, fair, and predictable benefits to injured workers
at a reasonable cost to employers. He said this principle drives
all the work at the division and board level. He said the
definition of fast can vary; especially due to medical delays
and paperwork the division stays focused on fairness,
efficiency, and cost control, taking this mission seriously.
1:45:35 PM
MR. COLLINS moved to slide 8 and explained his sandbox analogy.
He stated that if you work with him, you stay within the
"sandbox" the division's shared values and rules. He said if an
employee steps outside, then that employee is off track. The
divisions boundaries are defined by the its mission,
principles, focus, and culture. The division supports each
other, prioritize claimants, follows the law strictly, and stays
committed to delivering benefits quickly, fairly, and at a
reasonable cost.
1:46:56 PM
MR. COLLINS moved to slide 9, Workers' Compensation Division. He
stated that Alaska's workers' compensation system has several
parts. First, is administration, handling travel, payroll,
emails, and phone calls. He said some staff also assist
claimants with forms and questions, always staying within legal
boundaries. The division maintains all case records for 60
years, and some claims stay active for decades. Next,
adjudication handles disputes, with informal meetings and formal
hearings that can result in benefit approval or denial. Next,
reemployment benefits help injured workers get rehired,
retrained, and back to work. He stated that most workers only
receiving about two-thirds of their regular wage. It's meant for
support, not profit.
1:50:34 PM
SENATOR GRAY-JACKSON asked for confirmation that workers
compensation cases never close.
1:50:40 PM
MR. COLLINS answered that is correct. He stated that workers'
compensation cases can remain open indefinitely for medical and
other benefits. Some cases settle both indemnity and medical
claims and reopening them is nearly impossible. Once the case is
settled, to his knowledge, none have ever been reopened.
SENATOR GRAY-JACKSON asked if there is a settlement does the
case remain open.
MR. COLLINS stated that internally, the division still considers
a case open because it stays in the database for 60 years. If a
medical provider later links a new issue to the original injury,
even after a hearing and decision, the claimant can file again.
He said while the division has never seen one reopen; they would
review and hold a hearing if a new claim is filed.
1:52:39 PM
MR. COLLINS continued with slide 9, Workers' Compensation
Division. He stated that his division's investigation unit
investigates employer fraud, especially when a business lacks
insurance and an injury occurs. The division also follows up on
fraud tips from the hotline and review entire industries when
needed. He said one team member monitors the "lapse list" to
catch businesses whose policies may have expired. Often, it's
just a switch in insurers, but the division stays proactive to
prevent uninsured injuries. Next, the division has a Workers'
Compensation Benefit Guaranty Fund that covers injuries from
uninsured employers. It's funded by settlements, interest, and
penalties, and pays benefits when employers don't have coverage.
He said the division handles and resolves 612 claims a year. He
stated that by the time the guaranty fund receives the claim the
injured claimant has had medical treatment. Typically, the
medical bills are high by the time the division gets involved,
and sometimes ongoing care is needed. He said annual spending
averages $780,000 but can vary widely. Next, the division
oversees the Fishermen's Fund, which covers commercial fishermen
since they're not included in Alaska's workers' compensation. In
1951, fishermen created the fund to support themselves. He said
his team investigates and pays claims, and if the division
denies one, the Fishermen's Fund Council made up of members
appointed by the governor can review and overturn it. The fund
remains strong, and the division has increased benefits in
recent years. Lastly, the division manages the self-insurance
program, used by entities like the Municipality of Anchorage,
CBJ, and several boroughs. The self-insurance program handles
most claims in-house and carry excess insurance for high-cost
cases. The State of Alaska handles its own through risk
management which works similar to market insurance.
1:56:43 PM
MR. COLLINS moved to slide 10, Alaska Workers' Compensation
Board and stated that the board is overseen by an 18-member
board. Nine members are from labor, nine are from industry and
all members are appointed by the governor from each judicial
district. The board has panels in the first judicial district,
southeast Alaska, Fairbanks in judicial districts two and four,
and five panels from the third judicial district, Anchorage and
surrounding areas. The board approves all hearings, settlements,
and regulations, making it a true working board. He stated that
in the hearings, a judge is joined by one labor and one industry
board member. All three people have equal say even if they don't
agree on a decision. He said this system works well and is
unique by law, he said he reports to the board, not just the
commissioner.
1:59:02 PM
MR. COLLINS continued with slide 10 and said the board oversees
two key committees. First, is the Medical Services Review
Committee, which meets each summer with doctors and insurance
experts to manage and reduce medical costs. Back in 201415,
Alaska had some of the highest workers' compensation medical
reimbursements in the country. Thanks to the committee's work,
the state of Alaska has dropped to the national average around
20th. He said fee schedules are updated yearly based on Centers
for Medicare & Medicaid Services (CMS) rates with adjustments to
keep providers on board while controlling costs. The second
committee is the Second Independent Medical Evaluation (SIME)
Committee, made up of attorneys. The attorneys select specialty
doctors to resolve conflicting medical opinions in claims. He
said these high-level, often out-of-state evaluations are very
costly and entirely employer-funded, making cost control a
concern.
2:02:15 PM
MR. COLLINS moved to slide 11, How does it work. He stated that
a typical workers' compensation claim starts with an injury;
priority is medical care whether it's minor or serious. He said
in Alaska, unlike some states, workers choose their own doctor.
After treatment, a Report of Injury is filed by the employee,
employer, or even a doctor. Then the division gets a first
report of injury notification, but the division doesn't open a
case until all paperwork is in. The division gets 17,00020,000
reports a year, and over 90 percent require no further action.
If treatment is simple and paid, either by the employer or
insurer, the case ends there and just gets logged for records.
He said it only becomes complex if a claim is denied or
controverted.
2:05:08 PM
MR. COLLINS moved to slide 12, Adjudication Process. He stated
that if benefits are denied, whether for medical or wage loss,
the adjudication process begins. The employee can file a claim
saying bills aren't being paid or they're not receiving lost
wages. Once filed, the board notifies the employer and adjuster,
and a pre-hearing conference is scheduled. He said this informal
meeting aims to resolve the issue between the parties. Employers
can also challenge claims by filing a petition arguing the
injury didn't happen at work or the employee didn't return when
cleared. He said both sides then meet in a similar informal
setting. If no resolution is reached, the case moves to a formal
process.
2:07:03 PM
MR. COLLINS moved to slide 13, Adjudication Process. He stated
that when a case isn't resolved, it gets complicated, the
division handles 5,0006,000 cases a year. He said disputes over
who pays or whether the injury is valid lead to pre-hearing
conferences explaining each party's rights. The case then enters
discovery phase, where medical records, sometimes going back
years, are reviewed. He said employers may also request exams
from their chosen doctors. Multiple informal conferences may
follow to resolve issues. He stated that if there's a medical
dispute, parties can agree to a Second Independent Medical
Evaluation (SIME) or go to a hearing just on that issue. He said
the division also offers mediation, either by our officers or
outside attorneys, to help reach settlements. If mediation
fails, and can't come to an agreed settlement, compromises and
release then the case goes to a formal hearing with a panel. He
said the panel hears evidence, evaluates credibility, and the
hearing officer issues a written decision within 30 days. He
said these decisions are public and posted on the divisions
website. If someone disagrees with the decision, an appeal can
be made.
2:11:03 PM
MR. COLLINS moved to slide 14, Appeals. He stated that any board
decision can be appealed to the Appeals Commission, which has
operated independently since 2005. He stated that he generally
oversees the appeals, the commission works on its own. The
appeals commission reviews the board's record, sometimes accept
briefs or oral testimony, and can affirm, reverse, or send the
case back to the board. After the commission's decision, either
party can appeal to the Supreme Court, which may restart the
process. He said when someone says their appeal is taking
forever, it's because due process takes time.
2:12:27 PM
MR. COLLINS moved to slide 15, Reports of Injury in Relation to
Adjudication, and referenced a bar graph. He stated that each
year the division gets many injury reports. There were over
17,000 reports of injury in 2023, but far fewer involve lost
time, claims, or petitions. He said in 2023, there were over
3,800 lost-time cases, 627 claims, 853 petitions, and only 123
hearings. The division also had 68 mediations, which shows many
cases settle before a hearing. He explained that lost time means
missing at least seven days of work. In Alaska, the first three
days aren't paid unless you're out 28 days, and benefits paid
biweekly start on day 14.
2:15:37 PM
MR. COLLINS moved to slide 16, Benefits Under Workers'
Compensation and said for legal help; injured workers pay at
most $300 for a consultation. If the worker wins their case, the
employer pays the attorney fees. He said if attorneys turn
someone down, it's usually because the case isn't financially
viable. He stated that the State of Alaska has talked about
expanding access to legal help, but that would be costly. The
division does their best to assist self-represented workers. He
said settlements involving future medical care often require
board approval and may be denied if the board believes the
medical needs won't be met. He stated that death and funeral
benefits have been updated in recent years. Alaska offers higher
funeral benefits than most states. The funeral benefits range
from $6,000 to $12,000. He said indemnity payments (for
disability or death) vary by state based on local laws and
wages, since workers' compensation is governed entirely by state
law, not federal.
2:19:52 PM
SENATOR GRAY-JACKSON asked if the division offers language
assistance.
2:20:02 PM
MR. COLLINS answered that the division does offer language
assistance often virtually through Zoom or Teams, which have
translation features. He said many seafood processing workers go
through our system, and the division commonly assist with
languages like Malaysian and various Filipino dialects. The
division has contracted interpreters and in-house staff fluent
in Spanish and Filipino dialects.
SENATOR GRAY-JACKSON asked if the division provides services to
immigrant workers.
MR. COLLINS stated that the division does provide services for
immigrant workers if they are legally working in the state of
Alaska. He said as mentioned earlier, the division sees many
seasonal workers, especially seafood and summer tourism workers,
often on J-1 visas. The department's new office helps ensure the
immigrants get the support they need. He stated that
occasionally, the division encounters workers who may not be
here legally but, the divisions investigation unit handles those
cases, but the division still ensures the employee is taken care
of.
2:23:13 PM
MR. COLLINS continued with slide 16 and stated that in Alaska,
the division offers permanent total disability for those who
can't return to work, often from severe accidents like plane
crashes. The division also offers permanent partial impairment
for less severe injuries, like losing a finger, based on AMA
guidelines and a $273,000 statutory cap, usually paid as a lump
sum unless paired with reemployment benefits. He said temporary
total and partial disability cover recovery periods. Many
claimants receive a mix of these benefits. He said the
division's main goal is helping people return to work, ideally
in the same job, since work supports both recovery and social
connection.
2:25:19 PM
CHAIR BJORKMAN stated the committee would continue the
presentation at a later date.
2:25:54 PM
At ease.
SB 39-LOANS UNDER $25,000; PAYDAY LOANS
2:27:32 PM
CHAIR BJORKMAN reconvened the meeting and announced the
consideration of SENATE BILL NO. 39 "An Act relating to loans in
an amount of $25,000 or less; relating to the Nationwide
Multistate Licensing System and Registry; relating to deferred
deposit advances; and providing for an effective date."
2:28:10 PM
CHAIR BJORKMAN solicited a motion.
2:28:11 PM
SENATOR MERRICK moved to adopt Amendment 1, work order 34-
LS0357\A.1, to SB 39.
34-LS0357\A.1
Gunther
2/17/25
A M E N D M E N T 1
OFFERED IN THE SENATE BY SENATOR DUNBAR
TO: SB 39
Page 4, line 30:
Delete "AS 06.20.260(a)(1) - (5)"
Insert "AS 06.20.260(a)(1) and (3) - (5)"
Page 5, following line 11:
Insert a new bill section to read:
"* Sec. 12. AS 06.20.330(b) is amended to read:
(b) This chapter does not apply to a
financial institution chartered under 12 U.S.C.
38 (National Bank Act) or 12 U.S.C. 1751 - 1795k
(Federal Credit Union Act) [INDIVIDUAL LOANS BY
(1) PAWNBROKERS WHERE SEPARATE
AND INDIVIDUAL LOANS DO NOT EXCEED $750; IN THIS
PARAGRAPH, "PAWNBROKER" MEANS A PERSON WHO IS
REGULATED UNDER AS 08.76.100 08.76.590; OR
(2) LOAN SHOPS WHERE SEPARATE AND
INDIVIDUAL LOANS DO NOT EXCEED $500]."
Renumber the following bill sections accordingly.
Page 5, line 31:
Delete ", 06.20.330"
2:28:18 PM
CHAIR BJORKMAN objected for purposes of discussion.
2:28:24 PM
SENATOR DUNBAR speaking as sponsor, explained Amendment 1. He
stated that SB 39 was introduced last session and went through
several changes. He said Amendment 1 updates the current version
to reflect the final version that came out of House Finance.
2:29:07 PM
SENATOR YUNDT asked whether there has been an outreach to banks
about offering small, non-collateralized loans in this sector.
2:29:39 PM
SENATOR DUNBAR stated his belief that the bank were working with
the prior sponsor, which led to this amendment. He said some
banks supported the change. He said later he will cover how
traditional lenders still operate in states with similar laws.
2:30:26 PM
CHAIR BJORKMAN removed his objection; found no further objection
and Amendment 1 was adopted.
2:30:40 PM
SENATOR DUNBAR presented the following sponsor statement for SB
39:
[Original punctuation provided.]
Senate Bill 39 brings regulations for payday lending
businesses in line with those already governing
traditional lenders and those offering loans to
active-duty service members and their families. This
bill, sponsored by former Representative Wright,
passed through the other body last session and was
considered in Senate Community and Regional Affairs.
Session ended before it could come under consideration
at the Senate Finance Table.
2:31:10 PM
SENATOR DUNBAR continued:
Payday loans are typically short-term, high interest
loans, secured by providing the lender with
authorization to debit the loan amount plus interest
and fees from their bank.
Currently, payday lenders have a carveout in state law
that permits them to change APR rates far beyond the
cap on traditional loan products. The customers for
these loans are typically in urgent financial need,
and they frequently end up paying back multiple times
the original loan amount and further engage in cycles
of debt.
The Annual Percentage Rate (APR) of these loans is on
average 421 percent in Alaska, according to data
gathered by Alaska Public Interest Research Group in
2023. It would take $137 to keep up with the first
month's interest on the average $440 payday loan taken
in Alaska. Those needing less than $500 to survive the
month are not able to pay that amount several times
over, which this statutory carveout allows for.
Alaska law already sets a 36 percent annual percentage
rate (APR) limit on most other small dollar loans, and
lenders are federally barred form offering loans with
interest rates above 36 percent to active-duty service
members and their families. SB 39 eliminates a
loophole that puts Alaskans in vulnerable financial
positions and brings these corporations in line with
existing law. A non-evasion clause makes it so that
any entity doing business in Alaska (including those
operating online, out of state, or out of country)
would have to comply with these regulations as well.
With the passage of SB 39, Alaska would join 19 other
states, including South Dakota, New Mexico, Montana,
West Virginia, and Nebraska, that have established a
36 percent APR rate cap for these loans. I urge your
support.
2:33:32 PM
SENATOR YUNDT stated that predatory lending is terrible, and
while it's highly regulated in Alaska, his understanding is
lenders can only charge high APRs for about 6 to 8 weeks. After
that, they stop charging and usually recover payment around PFD
time. He asked how long lenders are legally allowed to charge a
customer.
2:34:27 PM
SENATOR DUNBAR answered that others with deeper expertise can
provide more detail. He said his current understanding is that
payday lenders in Alaska can charge 15 percent of the loan
amount every two weeks, and that interest compounds, meaning
borrowers pay not only on the original loan but also on any
accumulated interest and fees. While it's true that these
lenders are regulated, the structure of these loans can make the
actual cost to the borrower significantly higher than what is
initially advertised. He said even though the APR may be capped
in theory, the compounding interest every two weeks makes the
effective rate much steeper in practice. It really depends on
how the borrow analyzes the repayment terms and timing.
2:35:25 PM
SENATOR YUNDT asked Senator Dunbar's office to get back to the
committee with the exact maximum time limit. He stated that his
concern is that shutting down the few brick-and-mortar payday
lenders in Alaska might push people toward unregulated online or
overseas lenders. While the state tries to regulate those, if
they're based in another country and drain someone's bank
account, there may be little the state can do to recover the
money. He said the Center for Responsible Lending has useful
information on how people can fall victim to these practices.
SENATOR DUNBAR answered that the concern raises an important
point about online lenders, especially those operating illegally
from outside the U.S. He stated that's a criminal issue his
office hopes to be addressed. He said his research shows 19
states have passed similar laws, and in many of them, brick-and-
mortar lenders still offer short-term loans within a 36 percent
cap. He said the industry may change, but these loans remain
available. He stated that this law would help regulators crack
down on harmful online lending while still allowing local
lenders to operate within new rules.
2:37:58 PM
CHAIR BJORKMAN announced invited testimony on SB 39.
2:38:18 PM
TREVOR STORRS, CEO, Alaska Children's Trust (ACT) Anchorage,
Alaska, testified by invitation on SB 39 and read the following:
[Original punctuation provided.]
The Alaska Children's Trust offers its strong support
for Senate Bill 39, which seeks to establish
reasonable consumer protections for payday lending
practices in Alaska.
As the statewide lead organization focused on the
prevention of child abuse and neglect, ACT fully
supports enacting legislation to prevent the long-
term, negative impacts on Alaskan families that can
result from high-interest small-dollar loans.
The detrimental impact of economic hardships and
poverty on family well-being is widely acknowledged,
serving as a major risk factor for child abuse and
neglect. Financial strain can have far-reaching
effects on family dynamics, amplifying stress,
anxiety, and frustration within households.
Parents may find it increasingly difficult to provide
for their children's basic needs, such as food, a safe
place to live, clothes, and medical care. This
scarcity of resources and the constant pressure to
become financially solvent can lead to increased
parental stress, increasing the risk of child abuse
and neglect.
To alleviate short-term economic hardships, Alaskan
families often rely on payday loans. However,
financial strain resulting from payday loans can both
cause and further exacerbate these challenges. The
appeal of payday loans lies in their easy
accessibility and quick cash disbursement. However,
these types of loans are not ways of building credit
and instead trap many Alaskans in a cycle of debt and
poverty.
In recent years, banks and credit unions have begun to
introduce alternatives to pay day loans with
reasonable interest rates, helping families build
credit instead of trapping them in poverty.
In 2020, neglect and medical neglect made up 75
percent of all substantiated child maltreatment cases
in Alaska, illustrating how distinctly tied economic
hardship is to Alaska's incredibly high rates of child
abuse and neglect.
2:40:51 PM
MR. STORRS continued:
Senate Bill 39 addresses the need to standardize
rational safeguards for low-income families who face
financial instability, by ensuring payday loans are
subject to a reasonable maximum interest rate in line
with other small-dollar loans.
As Alaska continues to face one of the highest rates
of child abuse and neglect in the nation, we must
explore every possible solution to support and
strengthen our children and families. Establishing
consistent consumer protections during times of
greatest need ensures economic stability and
prioritizes the well-being of Alaska's children.
2:41:48 PM
ASHLEY URISMAN, Director, State Government Affairs, American
Fintech Council (AFC), Washington, DC, testified by invitation
in support of SB 39 and read the following:
[Original punctuation provided.]
AFC is a standards-based organization and the premier
trade association representing the largest financial
technology (Fintech) companies and innovative banks.
Our mission is to promote a transparent, inclusive,
and customer-centric financial system by supporting
responsible innovation in financial services and
encouraging sound public policy. AFC members foster
competition in consumer finance and pioneer products
to better serve underserved consumer segments and
geographies.
AFC represents responsible fintech companies of all
sizes. We recognize that not all bank-fintech
partnerships are created equal, but that certain
guardrails are critical to protect consumers. Our
association's position is that interest rates for
consumer loans should not exceed 36 percent. This rate
is nationally recognized as one that protects
consumers and fosters healthy competition among
lenders.
2:43:00 PM
MS. URISMAN continued:
As such, we applaud the Alaska State Senate for
proposing this bill capping monthly interest for loans
under $25,000 at 36 percent. This rate gives consumers
who need access to affordable credit the ability to
take out the loans without being burdened with debt.
Responsible fintech companies partnering with
regulated financial institutions have created safe,
transparent, and affordable credit options for
families long forgotten by traditional financial
institutions. Our members have committed to advocating
for a regulatory gold standard that offers access to
credit without compromising consumer protection or
regulatory compliance.
2:43:56 PM
CLAIRE LUBKE, Economic Justice Lead, Alaska Public Interest
Research Group (AKPIRG), Anchorage, Alaska, testified by
invitation on SB 39 and paraphrased the following:
[Original punctuation provided.]
I responded to a question from Senator Yundt regarding
the typical term of payday loans. AS 06.50.470
establishes a minimum term of 14 days for a payday
loan and a maximum loan renewal of two consecutive
terms. Alaska Statute does not set a maximum term for
payday loans. In practice, the typically short term of
a payday loan is a driving factor behind the fact that
individual borrowers take out an average of over five
payday loans in a single year. Borrowers use payday
loans one after the other in order to pay off an
original payday loan once the loan term has been
surpassed, which triggers pressure from debt
collectors and threatens legal proceedings.
Economic justice means we have an economy that works
for every Alaskan who chooses to participate in it.
One important aspect of economic justice is having
access to fair financial services and products. Payday
lending in Alaska, which was legalized in 2004 by the
creation of "deferred deposit advance" licenses,
violates reasonable standards for fairness.
2:46:34 PM
MS. LUBKE continued:
I want to share some details about who gets the short
end of the stick when it comes to payday lending.
Because deferred deposit advance licensees in Alaska
are not required to collect any demographic data on
their borrowers, we're faced with some gaps in data.
However, we have some informative examples and can
also look at national data for broad themes.
First, there's a common misconception that payday
lending is an urbanor at least a road system issue.
This just isn't true. In 2022, 62 percent of all
payday lending in Alaska was done online. The next
year, AKPIRG partnered with the Mutual Aid Network of
Anchorage to pay off payday loans held by Alaskans.
The Payday Jubilee project aided individuals living in
Fairbanks, Juneau, Eagle River, and Wasilla, but also
in Bethel, Dillingham, and Teller.
Another important example of who is impacted by payday
lending comes from Texas. A 2018 survey of over 150
Veterans in the Houston area found that 45 percent of
Veterans had used a payday loan, compared to only 7
percent of the civilian adult population. In this
report, Veterans recount haunting experiences of
facing eviction or being harassed by debt collectors
after taking out a payday loan for essential
activities like repairing a car or paying a medical
bill. I'd gladly share this report with Committee
members to help illustrate how payday lenders target
Veterans with their extortive financial products.
Please keep in mind that Congress passed the Military
Lending Act in 2007, which required any business that
provides a loan to an Active Duty servicemember to
comply with a 36 percent rate cap. This was after a
study found payday lenders were actively targeting
military bases. The Department of Defense had lost
billions of dollars as active-duty members were found
unfit to serve because of steeply declining credit
scores that resulted from predatory loans. While
active-duty members are now protected by a 36 percent
rate cap, we're all left to wonder why this protection
was not extended to Veterans.
Alaska has the highest percentage of Veterans in our
population of all 50 states. 10.1 percent of Alaskans
are Veterans. With SB 39, Alaska has the opportunity
to join 18 other states in extending minimum standards
of fairness in small dollar lending to the thousands
of Veterans that call this state home.
2:50:39 PM
[CHAIR BJORKMAN held SB 39, as amended, in committee.]
SB 98-EXTEND BOARD OF VETERINARY EXAMINERS
2:50:45 PM
CHAIR BJORKMAN announced the consideration of SENATE BILL NO. 98
"An Act extending the termination date of the Board of
Veterinary Examiners; and providing for an effective date."
2:51:06 PM
MATT CHURCHILL, Staff, Senator Jesse Bjorkman, Alaska State
Legislator, Juneau, Alaska, provided a brief recap of SB 98:
[Original punctuation provided.]
As the Committee heard on Monday, February 17th,
Senate Bill 98 seeks to extend the sunset date of the
state Board of Veterinary Examiners by six years to
June 30, 2031.
2:52:11 PM
CHAIR BJORKMAN opened public testimony on SB 98; finding none,
he closed public testimony.
2:52:30 PM
CHAIR BJORKMAN solicited the will of the committee.
2:52:32 PM
SENATOR MERRICK moved to report SB 98, work order 34-LS0577\A,
from committee with individual recommendations and attached
fiscal note(s).
2:52:49 PM
CHAIR BJORKMAN found no objection and SB 98 was reported from
the Senate Labor and Commerce Standing Committee.
2:53:20 PM
There being no further business to come before the committee,
Chair Bjorkman adjourned the Senate Labor and Commerce Standing
Committee meeting at 2:53 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| DOLWD Presentation to SLAC-Workers' Compensation 02.19.25.pdf |
SL&C 2/19/2025 1:30:00 PM |
Workers' Compensation |
| SB39 ver A.pdf |
SL&C 2/19/2025 1:30:00 PM |
SB 39 |
| SB39 Draft Proposed Amendment ver A.1.pdf |
SL&C 2/19/2025 1:30:00 PM |
SB 39 |
| SB39 Sponsor Statement verA 02.10.25.pdf |
SL&C 2/19/2025 1:30:00 PM |
SB 39 |
| SB39 Sectional Analysis ver A 02.12.25.pdf |
SL&C 2/19/2025 1:30:00 PM |
SB 39 |
| SB39 Fiscal Note-DCCED-DBS-02.14.25.pdf |
SL&C 2/19/2025 1:30:00 PM |
SB 39 |
| SB39 Public Testimony-Combined as of 01.31.25.pdf |
SL&C 2/19/2025 1:30:00 PM |
SB 39 |
| SB39 Public Testimony-Email-Tracy Fischbach 02.09.25.pdf |
SL&C 2/19/2025 1:30:00 PM |
SB 39 |