Legislature(2025 - 2026)BARNES 124
03/26/2025 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB132 | |
| HB50 | |
| HB148 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 132 | TELECONFERENCED | |
| + | HB 50 | TELECONFERENCED | |
| *+ | HB 148 | TELECONFERENCED | |
| *+ | HB 149 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
HB 132-LOANS UNDER $25,000; PAYDAY LOANS
3:19:13 PM
CO-CHAIR HALL announced that the first order of business would
be HOUSE BILL NO. 132, "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."
3:19:30 PM
REPRESENTATIVE TED EISCHEID, Alaska State Legislature, He
reminded the committee that HB 132 seeks to remove an exemption
that allows payday lenders to offer short-term loans with
extremely high interest rates, to the detriment of many families
in Alaska and to the benefit of "predatory out-of-state
lenders". He stated that HB 132 would treat all small loans
similarly.
3:21:15 PM
CO-CHAIR HALL opened public testimony on HB 132.
3:21:49 PM
CATHY BRENNAN, Partner, Hudson Cook Law Firm, She explained that
her practice focuses on bank partnership programs. She stated
that her comments on the proposed legislation would be focused
on section 10 of the bill, which she stated would recharacterize
bank service providers as true lenders. She explained that the
current [Alaska] Small Loans Act (ASLA) ignored the reality that
small banks are not able to provide loans at a fair interest
rate. She asserted that the proposed legislation would diminish
the current availability of consumer credit in Alaska.
3:24:16 PM
PATRICK BREWER, President, Southwest Public Policy Institute, He
gave a prepared statement, which he stated as follows:
I am a consumer advocate and the president of the
Southwest Public Policy Institute. In January 2022,
New Mexico adopted a house law similar to HB 132. In
New Mexico, the proponents of the measure said not to
worry about the impact on access to credit. However,
traditional banks and credit unions have not filled
the void. I would like to ask you a question; with
respect, have any of you tried to apply for a Wells
Fargo small-dollar loan, because I have. Let's get
real, these small d... don't exist. I personally
tested the of the credit by applying for small-dollar
loans from major banks and credit unions in New Mexico
in the aftermath of the rate cap. Despite applying to
institutions like Wells Fargo, Bank of America and 15
credit unions, I was universally rejected by the
banks. I received ??? approval from just two credit
unions. I spent roughly 20 hours attempting to secure
just one emergency a loan, a task which is nearly
impossible for most consumers, especially those
experiencing financial emergencies. Why is this so
difficult? Just looking at Wells Fargo, to obtain a
small-dollar loan, you first have to open a checking
account, which would require you to have money in the
first place for a deposit. And then you have to be a
customer in good standing for at least a year with
recurring direct deposits, and then they will
determine whether or not you are eligible. Credit
unions have similar requirements except that they
conduct hard credit inquiries when you apply, which
lowers your credit score and increases your borrowing
cost. My? Credit score personally dropped over 100
points when I was just looking for a small 500 dollar
loan. I urge the committee to recognize the
shortcomings of HB 132, as seen firsthand in New
Mexico. The assurances that banks and credit unions
... In closing, I ask the committee to oppose this
legislation and consider these real-world impacts and
the need for balanced regulations that ensure
accessible credit for all. Thank you.
3:26:28 PM
MR. BREWER, in response to questions from Co-Chair Fields and
Representative Saddler stated that the Southwest Public Policy
Institute was funded by private donors, whom he would not
identify, and he suggested that the narrative that big banks and
credit unions would fill the gaps created by rate caps. He
asserted that banks and credit unions were ill-prepared to
handle specialized credit applications.
3:28:17 PM
DANIELLE ARLOWE, Senior Vice President, American Financial
Services Association, She explained that members of the American
Financial Services Association ranged from small creditors to
large banks. She emphasized that her association did not
represent payday lenders or credit unions. She shared three
concerns with the proposed legislation and asserted that HB 132
proposed a "confusing, non-standard" definition of rate.
3:30:47 PM
CLAIRE LUBKE, Economic Justice Lead, Alaska Public Interest
Research Group (AKPIRG), She stated that her association
supported HB 132 and recognized the need to reform payday
lending in Alaska. She argued that "payday loans are deathtraps
that make financial hardship worse." She stated that payday
loans, referred to as deferred deposit advances in Alaska
Statute (A.S.), are marketed as one-time emergency loans;
however, she emphasized that the average customers in Alaska
take out more than five loans a year. She further stated that
borrowers often take out consecutive loans to pay off an
originating loan. She reported that over half of all payday
lending occurs online. She stated that companies with deferred
deposit advances are not headquartered in Alaska, and many of
them did not have storefronts in the state. She stressed...
She reported that, in 2023, AKPIRG partnered with the mutual aid
network of Anchorage to pay off payday loans for 25 people
living in Anchorage, Eagle River, Juneau, Dillingham, services
association Palmer, Wasilla, and Bethel. She reported that
participants, when interviewed, responded to exhaust all
possible alternatives before considering a payday loan. She
referred to ??? council supporting legislation... She concluded
her testimony by stating that no loan should have interest of
over 100 percent.
3:33:01 PM
CO-CHAIR FIELDS, based on prior testimony from the [American]
Financial Services Association, asked whether the rate
calculation of HB 132 should be changed to align with the Truth
in Lending Act (TLA).
MS. LUBKE responded that she would follow up with the committee,
stating that she does not believe the definition conflicts with
TLA.
3:34:02 PM
NICO REIJNS, representing self, He explained that he is a
reverend at the United Methodist Church in Anchorage and that it
is a Christian value to stand with vulnerable neighbors. He
asserted that society makes being poor very expensive and
difficult, and cited payday loans as an example. He asserted
that payday loans have unconscionable fees. He provided a
personal anecdote about a neighbor who, despite paying off the
principal amount of a loan several times over, was still
indebted to the company from which she borrowed. He concluded
by urging the committee to vote yes on the proposed legislation.
3:36:07 PM
MR. REIJNS, in response to Representative Saddler, replied that
he represented the official position of his congregation. He
added that the United Methodist Conference has supported similar
legislation in the past and offered his belief that there was a
letter of support from this organization.
3:36:49 PM
SUKI MILLER, Executive Director,, Victims for Justice, She
explained that her organization was a non-profit that provides
support for Alaska victims of violent crimes since the early
1980s. She stated that they aid with critical needs such as
rent, gas, and groceries. She stated that many victims of
violent crimes, unaware of the services available to them, will
take out payday loans in desperation. She asserted that payday
loans trap people in cycles of debt. She asserted that a
reduction of allowable interest rates on payday loans would
offer critical protection for victims, who often turn to payday
loans for emergency support. She concluded by thanking
Representative Eischeid for introducing HB 132.
3:38:00 PM
ANDREW DUKE, Chief Executive Officer, Online Lenders Allliance,
He explained that his organization focuses on "policy
surrounding credit access," stating that more options and
choices yield better outcomes for consumers. He reported that
1/3 of people in Alaska are considered credit-constrained,
Alaska leads the nation in credit card utilization, and Alaska
has the highest average credit balances in the United States
(U.S.). He referred to the legislation passed in Illinois that
was similar to HB 132. He stated that the small-dollar loans
offered by large legacy banks would not suffice, given the
eligibility requirements for these types of loans. He stated
that banks, in working with service providers, are able to
extend loans across state lines. He offered his belief that the
legislators should instead work towards creating more lending
options for consumers.
3:40:15 PM
CORT WALKER, Vice President, Product & Risk, Check City, He
explained that his company has a license in Alaska for lending
operations. He argued that the proposed bill, while packaged as
consumer-friendly, was wholesale prohibition on licensed
consumer-lending in Alaska. He warned that, upon passage of HB
132, "legitimate and licensed short-term lenders" would no
longer offer short-term loans in Alaska. He stated that his
company's average loan duration was 17 days and that his company
charged no more than 15-dollars per 100-dollars borrowed.
3:42:51 PM
REPRESENTATIVE SADDLER asked the testifier to restate the
organization he represented and asked him to speak to the 36
percent cap.
MR. WALKER answered that a 36 percent rate cap on a small loan
would make the loan impossible to administer.
3:44:20 PM
NOEL LOWE, Owner, Alaska Fast Cash, He said the language in
the proposed legislation might include pawn shops, which could
negatively affect his business. He asked the committee to
entertain an amendment that would confirm the intent of HB 132.
3:45:22 PM
CHRIS GRIMM, Head of State Government Affairs, Innovative
Lending Platform Association, He said that the Innovative
Lending Platform Association (ILPA) was opposed to the proposed
legislation because it exceeded its own legislative intent. He
said that Alaska would be the first in the country to adopt such
a piece of legislation and discouraged the committee's support
of HB 132.
3:47:18 PM
CO-CHAIR HALL, after ascertaining that there was no one else who
wished to testify, closed public testimony on HB 132.
3:47:41 PM
REPRESENTATIVE SADDLER moved to adopt Amendment [1] to HB 132,
labeled 34-LS0462\N.3, Gunther, 3/25/25, which read as follows
[original punctuation provided]:
Page 3, line 19:
Delete "$500"
Insert "$1,000 [$500]"
Page 3, line 20:
Delete "$2,000"
Insert "$4,000 [$2,000]"
CO-CHAIR FIELDS objected for the purpose of discussion.
REPRESENTATIVE SADDLER stated that before 1996, the fee for all
applicants was $200. He explained that, currently, the proposed
legislation utilized the existing fee and said that he thought
it was appropriate to raise the fee again as the fee had not
been changed for 30 years.
3:48:33 PM
REPRESENTATIVE COULOMBE [moved to adopt Conceptual Amendment 1
to Amendment 1, to change "$1,000" to "$10,000". There being no
objection, it was so ordered.
REPRESENTATIVE SADDLER inquired whether Representative Coulombe
had intended to raise the second license fee, as well.
REPRESENTATIVE COULOMBE answered yes. She moved to adopt
Conceptual Amendment 2 to Amendment 1, as amended, to change
"$4,000" to "$8,000".
3:49:40 PM
CO-CHAIR FIELDS pointed out that since the first license fee had
been changed to $10,000, the second license fee should be
increased commensurate with the first. He suggested
Representative Coulombe restate Conceptual Amendment 2 to
Amendment 1, as amended, to reflect that change.
3:49:53 PM
The committee took a brief at-ease at 3:49 p.m.
3:50:29 PM
REPRESENTATIVE COULOMBE restated Conceptual Amendment 2 to
Amendment 1, as amended, to change the license second license
fee to "$40,000". There being no objection, it was so ordered.
CO-CHAIR HALL asked the sponsors thoughts on the amended
amendment.
3:51:24 PM
The committee took a brief at-ease at 3:51 p.m.
3:52:21 PM
REPRESENTATIVE EISCHEID stated that his office was neutral to
the proposed amendments.
3:52:36 PM
CO-CHAIR FIELDS removed his objection to Amendment 1, as
amended. There being no further objections, Amendment 1, as
amended, was adopted to HB 132.
3:53:12 PM
CO-CHAIR FIELDS stated that he would not be offering Amendment
2.
3:53:32 PM
REPRESENTATIVE CARRICK referenced testimony stating that
Alaskans wouldn't be able to find small dollar loans and asked
rhetorically what the purpose of a payday loan was.
3:54:51 PM
REPRESENTATIVE EISCHEID said that the proposed legislation had
been considered in the previous legislative session.
3:55:13 PM
REPRESENTATIVE SADDLER stated he appreciated all of the work
that had been done to move HB 132 along.
REPRESENTATIVE EISCHEID concurred with Representative Saddler's
sentiments.
3:55:38 PM
CO-CHAIR FIELDS moved to report HB 132, as amended, out of
committee with individual recommendations and the accompanying
fiscal notes. There being no objection, CSHB 132(L&C) was moved
out of the House Labor and Commerce Standing Committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 50 Sponsor Statement 3.19.2025.pdf |
HL&C 3/26/2025 3:15:00 PM |
HB 50 |
| HB 50 Sectional Analysis, Version A 3.19.2025.pdf |
HL&C 3/26/2025 3:15:00 PM |
HB 50 |
| HB 50, version A.pdf |
HL&C 3/26/2025 3:15:00 PM |
HB 50 |
| HB 50 Haines Huts and Trailes Letter of Support 3.10.25.pdf |
HL&C 3/26/2025 3:15:00 PM SCRA 4/22/2025 1:30:00 PM SCRA 5/6/2025 1:30:00 PM SL&C 3/2/2026 1:30:00 PM |
HB 50 |
| HB 50 Juneau Nordic Ski Club Letter of Support 2.12.25.pdf |
HL&C 3/26/2025 3:15:00 PM SCRA 5/6/2025 1:30:00 PM |
HB 50 |
| HB 50 Supporting Document-Alaska DOR Tax Division 2023 Charitable Gaming Annual Report 3.19.2025.pdf |
HL&C 3/26/2025 3:15:00 PM SL&C 3/2/2026 1:30:00 PM |
HB 50 |
| HB0148A.pdf |
HL&C 3/26/2025 3:15:00 PM HL&C 4/23/2025 9:00:00 AM |
HB 148 |
| HB148 - Insurance Terms Reference.pdf |
HL&C 3/26/2025 3:15:00 PM HL&C 4/23/2025 9:00:00 AM |
HB 148 |
| HB 132 Amendment N.2.pdf |
HL&C 3/26/2025 3:15:00 PM |
HB 132 |
| HB 132 Amendment N.3.pdf |
HL&C 3/26/2025 3:15:00 PM |
HB 132 |
| HB 148 - Sponsor Statement Ver A.pdf |
HL&C 3/26/2025 3:15:00 PM |
HB 148 |
| HB 148 - Sectional Analysis Ver A.pdf |
HL&C 3/26/2025 3:15:00 PM HL&C 4/23/2025 9:00:00 AM |
HB 148 |