Legislature(2021 - 2022)ADAMS 519
05/06/2021 09:00 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB132 | |
| HB85 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 132 | TELECONFERENCED | |
| + | HB 85 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
May 6, 2021
9:02 a.m.
9:02:57 AM
CALL TO ORDER
Co-Chair Merrick called the House Finance Committee meeting
to order at 9:02 a.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Kelly Merrick, Co-Chair
Representative Dan Ortiz, Vice-Chair
Representative Ben Carpenter
Representative DeLena Johnson
Representative Andy Josephson
Representative Bart LeBon
Representative Sara Rasmussen
Representative Steve Thompson
Representative Adam Wool
MEMBERS ABSENT
Representative Bryce Edgmon
ALSO PRESENT
Representative Zach Fields, Sponsor; Representative Bart
LeBon, Sponsor.
PRESENT VIA TELECONFERENCE
Ms. Amy Nibert, President and CEO, Associated Builders and
Contractors of Alaska, Anchorage; Mari Selle, Alaska
Primary Care Association, Anchorage; Trish Zugg, CTE
Program Administrator, Mat-Su School District; Michael
Martin, President, Alaska Bankers Association; General
Counsel and Corporate Secretary, Northrim Bank; David
Durham, Executive Vice President and Chief Credit
Administrator, Mt. McKinley Bank; Secretary and Treasurer,
Alaska Bankers Association; Laura Achee, Legislative
Liaison, Department of Environmental Conservation; Tracy
Reno, Chief Financial Examiner, Division of Banking and
Securities. Department of Commerce, Community and Economic
Development; Ed Martin Jr., Self, Kenai.
SUMMARY
HB 85 FINANCIAL INSTITUTIONS; LIABILITY
HB 85 was HEARD and HELD in committee for further
consideration.
HB 132 SCHOOL APPRENTICESHIP PROGS; TAX CREDITS
HB 132 was HEARD and HELD in committee for
further consideration.
Co-Chair Merrick reviewed the meeting agenda.
HOUSE BILL NO. 132
"An Act relating to technical education and
apprenticeships; relating to concurrent vocational
education, training, and on-the-job trade experience
programs for students enrolled in public secondary
schools; relating to child labor; and providing for an
effective date."
9:03:35 AM
REPRESENTATIVE ZACH FIELDS, SPONSOR, relayed that the bill
was sponsored by the House Labor and Commerce Committee. He
provided a PowerPoint presentation titled "Apprenticeship
Expansion Act" (copy on file). He began with slide 1
"Apprenticeship and CTE Background":
• Alaska has high-performing apprenticeship programs
in traditional trades, and recent innovation with
apprenticeship in new industries
• School districts want to expand CTE and school-to-
apprenticeship but need support to meet demand
• Other states and nations have shown potential to
expand apprenticeship & CTE
• Expansion of apprenticeship and CTE helps people
pull themselves up by their bootstraps without
student debt
• Good state policy positions us to capture and
capitalize on federal apprenticeship grants
Representative Fields turned to slide 2, "Incentivize
Employer Participation":
• Establishes $1,000 / apprentice employer tax credit,
and $1,500 / veteran apprentice
• Based on successful model from other states and
addressed what the bill would do. The bill would
incentivize employer participation.
Representative Fields mentioned the success of
apprenticeship programs in South Carolina. He thought the
legislature should be pushing the Department of Education
and Early Development to think more broadly about how to
support apprenticeships.
Representative Fields turned to slide 4, "Depts. Labor,
Education Coordination":
• Directs DOLWD and DEED to collaborate in provision
of technical and financial support for:
o School to apprenticeship programs
o Science, Math, and Engineering CTE programs
9:06:58 AM
Representative Fields moved to slide 5, "College Credit for
CTE and Apprenticeship":
• Directs University to explore ways to expand dual
credit for CTE courses and college credit for
participants in apprenticeship and discussed the
college credit for CTE
Representative Fields noted that the bill language was
written in consultation with the University. He noted that
the bill was endorsed by a wide range of organizations,
including the Associate Builders and Contractors, Alaska
State Hospital and Nursing Home Association, the Matanuska-
Susitna School District. He quickly showed endorsing
organizations on slide 6.
Representative Fields advanced to slide 7, "Financial
Implications":
• Zero cost from language affecting DEED, DOLWD,
University system
• Cost is per-apprentice tax credits of $1,000 or
$1,500 for veterans
• Tax credits apply once, not for each year of
apprenticeship participation
Representative Fields noted that there would be an
indeterminate fiscal note from the Department of Revenue.
He shared that the apprenticeships usually lasted 1 to 6
years.
Representative Fields spoke to slide 8, "Summary":
• Incentivize employer participation
• Encourage cross-departmental collaboration
• Support school districts
• Expand dual credit and post-secondary pathways
Representative Fields relayed that he had heard
definitively that school districts wanted to support
apprenticeship more broadly but did not have the resources.
He reiterated that there was an opportunity to capture
federal grants to support school apprenticeships. He noted
that invited testimony would go into greater detail about
the bill.
9:09:03 AM
MS. AMY NIBERT, PRESIDENT AND CEO, ASSOCIATED BUILDERS AND
CONTRACTORS OF ALASKA, ANCHORAGE (via teleconference),
introduced herself and noted that her organization operated
one of the largest apprenticeships in the state and
supported career and technical training. She relayed that
the Associated Builders and Contractors of Alaska (ABC)
supported an increase in opportunities for Alaskans to be
successful in apprenticeship programs and believed that HB
132 would help drive high school students to success.
Representative Rasmussen asked how many new apprentices the
ABC organization took on in one year.
Ms. Nibert answered that the organization took on
apprentices year-round after an application process and
interview. She cited that ABC received 200 to 250
applicants per year and currently they had between 200 and
300 individuals working in apprenticeships.
Representative Rasmussen asked what percentage of ABC was
organized versus unorganized labor.
Ms. Nibert replied that the organization represented open
shop contractors but had one union contractor that utilized
ABC's sprinkler-fitter apprenticeship program.
9:12:23 AM
MARI SELLE, ALASKA PRIMARY CARE ASSOCIATION, ANCHORAGE (via
teleconference), indicated that she represented the
workforce development of the Alaska Primary Care
Association (APCA). She believed the bill had to the
potential to open doors to youth that wanted to enter
health and human services careers. She noted that APCA had
been a multi-agency sponsor of apprenticeships since 2017,
working with various healthcare employers including
community health centers represented by the association.
She noted that there were active healthcare apprentices
learning and working all over the state including billers
and coders, clinical medical assistants, and community
health workers. She continued that there were registered
apprenticeship programs for medical secretaries, electronic
health record specialists, and a pharmacy tech
apprenticeship was coming soon. She cited that about 25
percent of apprentices were age 18 to 24. The model had
been amazing for many employers.
Ms. Selle continued her testimony in support of the bill.
She commented that the model worked well for people going
into entry level jobs in healthcare and human services.
Professionals were already mentoring and training staff in
the recruitment pool, and as a multi-agency sponsor APCA
could provide the formal education and a structured way to
ensure workers had the skills to be successful. She
mentioned a partnership with Alaska Pacific University,
through which apprentices could earn an undergraduate
certificate and go on to further degrees and career
ladders. She shared that the programs were especially well
suited for youth on a work track instead of a college
track. She expressed that the apprenticeships provided a
"well-lit path" to work right out of high school, and
students could earn college credits simultaneously if they
chose to do so.
9:16:40 AM
Representative Rasmussen asked for a rough estimate of the
number of apprenticeship applicants they accepted per year.
Ms. Selle answered that currently there were about 80
active apprentices on the APCA roster. She estimated that
about 80 percent were new apprentices from the past
calendar year. There were about two cohorts per year with
about 30 new apprentices.
9:17:45 AM
TRISH ZUGG, CTE PROGRAM ADMINISTRATOR, MAT-SU SCHOOL
DISTRICT (via teleconference), read from a prepared
statement. She considered that the key to providing a
educated, skilled workforce in Alaska was connecting our
systems of learning and assuring high quality of programs
at every level. She discussed high quality career and
technical education, effective workforce development that
included rigorous sequence of study, recognized
credentials, equity of access, technical expert
instructors, and contextualization of academics. She
asserted that the most effective evidence was work-based
learning outside the classroom. The district's goal was to
have work-based learning for all students, and
apprenticeship was the gold standard for learning at work.
She cited that apprenticeship provided for a means to earn
money for high-demand careers, a pathway to degrees, debt-
free education, and high wages. She discussed areas for
apprenticeships. She mentioned preparing students for all
levels of transition. She cited that apprenticeship had
proven results, and cited that participants earned 35
percent more than the average Alaska worker. She continued
that workers who completed their apprenticeship earned an
average of $78,990. She suggested that apprenticeships
prepared individuals for life and not only a job. She
referenced the importance of soft skills, and the long-term
success of employees. The asserted that the need for
training providers was important. The district was ready to
customize training opportunities and she emphasized the
importance of employer buy-in and sponsorship.
Ms. Zugg continued her testimony in support of the bill.
She thought apprenticeships should be an institutionalized
norm. She thought the bill would be foundational for the
Department of Labor and Workforce Development to better
guide and support the efforts. She discussed advantages to
enhance partnerships such as a more upscale workforce
invested locally, recruitment gains, turnover reductions,
and enhanced relationships. She asserted that the bill
would be good for the employer and employee and the
readiness of Alaska's workforce and the economy. She
mentioned a COVID-related acute labor shortage and felt
pre-apprenticeship and apprenticeship could provide a
pathway for preparing and returning employees to work in
high demand occupations and adding to the ability to a path
towards advancement.
9:23:33 AM
Vice-Chair Ortiz thought it appeared that the Matanuska-
Susitna (Mat-Su) School District already had an extensive
CTE program. He asked how the bill would augment the
district's existing program.
Ms. Zugg answered that the district had a robust number of
high-quality training programs, but the key linkage was to
connect the programs with work outside the classroom. She
continued that apprenticeship was the modality allowing for
requirement, eligibility, and contracting fidelity. The
district needed a liaison with the Department of Labor and
Workforce Development to connect with systems, and a
connection to the job center. She stressed the importance
of connecting to the training programs and getting students
out for work-based learning opportunities.
9:25:35 AM
Vice-Chair Ortiz asked if the district had an existing
program where students were in work-based apprenticeships
and earned credit for graduation.
Ms. Zugg replied that the district did give credit towards
graduation. The school did periodic evaluations during
which teachers met with employers. Teachers could evaluate
soft stills and provide training specific subsets of skills
that were needed. She mentioned part of the bill with a
spectrum for learning. She discussed foundational courses
that led to industry certifications. She mentioned setting
up a seamless system that would allow students to gain
credit for working to transfer into a career.
Representative Rasmussen asked if the Mat-Su had any CTE
courses for correctional or public safety officers. She
thought the state had a deficit with the number of police
and correctional officers needed in the state.
Ms. Zugg answered that there was currently not an active
program for apprenticeship with correctional or public
safety officers. She mentioned a program of study for law.
The district had looked at the Explorer Program, which was
no longer active. She cited the need for a connection to
curriculum. She noted that the Department of Corrections,
Alaska State Troopers, and police agencies were invited to
the college and career fair in the Mat-Su to recruit and
talk to students.
Co-Chair Merrick set the amendment deadline for Monday
evening.
HB 132 was HEARD and HELD in committee for further
consideration.
9:29:52 AM
AT EASE
9:31:20 AM
RECONVENED
HOUSE BILL NO. 85
"An Act relating to the Alaska Banking Code; relating
to mutual savings banks; relating to interstate state
banks and international banks; relating to the
pledging of bank assets as collateral security to
tribal organizations; relating to the pledging of bank
assets for interest swap agreements; relating to state
business licenses; relating to persons who make loans
secured by interests in vessels or facilities;
relating to liability for the release or threatened
release of hazardous substances; relating to the Model
Foreign Bank Loan Act; and providing for an effective
date."
9:31:25 AM
REPRESENTATIVE BART LEBON, SPONSOR, introduced the bill. He
shared that he had a banking background that included
employment at a nationally chartered bank and a state-
chartered bank. The bill attempted to create parity between
national and state-chartered banks in Alaska. There were
three banks that were nationally chartered in the state,
and four state-chartered banks in the state. He wanted to
give invited testifiers time.
9:33:25 AM
MICHAEL MARTIN, PRESIDENT, ALASKA BANKERS ASSOCIATION;
GENERAL COUNSEL AND CORPORATE SECRETARY, NORTHRIM BANK (via
teleconference), read from a prepared statement. He cited
that the Alaska Bankers Association (ABA) represented the
seven banks that operated in the state. The banks
safeguarded over $14 billion in combined deposits and
employed more than 2,200 essential workers across the 121
branches statewide. He continued that the banks made over
85 percent of non-public commercial loans in the state and
asserted that Alaska bankers were job creators that fueled
the state's economy. He mentioned that all seven member
banks had lent over $1.4 billion for the first round of the
federal Paycheck Protection Program (PPP) during the COVID-
19 pandemic. During the second round of PPP, the banks had
made approximately 11,000 loans for an additional $723
million in the state. The banks were committed to continued
support of individuals and business in the state.
Mr. Martin continued his testimony. He noted that there
were four state-chartered banks, and three nationally
chartered banks. He noted mentioned the Alaska Division of
Banking, which served as the primary regulator and
chartering authority for the state-chartered banks, while
the Office of the Comptroller of the Currency was charged
with chartering and regulating national banks in the state.
He thought the system provided healthy competition and
regulatory philosophy. The ABA thought it was important to
adapt by amending Title XI and the permissible powers of
Alaska-chartered banks to maintain competitiveness within
the industry. He emphasized that Alaska banking statutes
were outdated. He did not recall that the statutes had been
altered in the 25-year period that he had been working as
counsel for Alaska banks. He thought the need for Alaska to
modernize its banking standards had existed for years as
technology and industry had evolved.
Mr. Martin explained that the ABA had worked closely with
the Alaska Division of Banking to craft legislation to
equalize and maintain the quality of competition between
state and federally chartered institutions. He asserted
that HB 85 would provide Alaska-chartered banks to compete
on equal footing with federally charted banks without
endangering the safety and soundness and consumer
protections. The ABA supported HB 85 to reflect changes in
technology, consumer preferences, and the businesses of
banking. He thanked the committee for the opportunity to
testify. He thanked Representative LeBon and his staff for
their work on the bill. He thanked the Alaska Division of
Banking. He relayed that the bill had been a collaborative
effort.
9:38:56 AM
Vice-Chair Ortiz observed that one of his formers students
was a supporter of the bill. He asked how modernizing
Alaska-based banking codes would help make banks more
competitive with federal banks.
Mr. Martin answered mentioned properties from foreclosures
and explained that current statutes required a write-down
on the real value of the property after a couple of years.
The national banks followed Generally Accepted Accounting
Principles (GAAP) with an accounting analysis for
valuation, while Alaska banks had to follow a rule that
disallowed the use of GAAP and required a write-down of the
real estate value. As such, the banks ended up petitioning
for extensions until the property could be sold. He offered
another example in collateralizing deposits for Native
entities. He explained that Native health organizations
received money and banks collateralized the deposits, while
many times the entities created consortiums for economic
ease. Under current statute, state banks were not allowed
to collateralize deposits, but national banks could. He
offered the example of a provision that required state
banks to have 10 meetings of the boards of directors, which
was not required of national banks. He asserted that the
examples mentioned caused inconvenience and put state-
chartered banks at a competitive disadvantage.
9:42:49 AM
Representative Josephson looked at pages 9 to 10 of the
legislation. He observed that the bill would allow for
banks with a security interest in properties to be
immunized and not held liable on a showing that the bank
did not participate in the management a vessel or facility.
He had some concerns that if there were brown fields and
contaminated brown fields, someone should be held liable
for contamination. He considered the superfund law that was
modified in 1996, and thought the proposed bill was
consistent with the modification. He was concerned with the
use of the word "person" on line 1, page 10. He asked what
the ABA's view of changing a person (from Section O) to any
preferred definition of "bank" that was preferred if the
goal was to protect a bank from an unfair lawsuit.
Mr. Martin responded that the topic had been raised during
the House Labor and Commerce Committee meetings considering
the bill. He noticed that the Department of Environmental
Conservation (DEC) had raised the same issue. He noted that
there were others may be better to speak to the topic, and
the matter was not significant to ABA. He though the terms
used in the bill reflected the language used in the
Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA) which defined what was a lender and
what was a person. He acknowledged that he was not well
versed in CERCLA. He explained that the issue that was
being addressed related to a bank having a piece of real
estate and having to foreclose on the property. There was
an open legal question as to whether the bank had the same
liability limitation enjoyed under CERCLA, and the notion
that if the bank had not operated a business on the
property, simply having security interest in the property
did not bring the liability to the financial institution.
The current implication was that if there was a piece of
collateral with environmental contamination, a bank would
not foreclose or walk away from the transaction, which was
not helpful. He thought a subsequent testifier would have
more insight into the issue.
9:47:13 AM
Representative LeBon thanked Representative Josephson for
his interest in the issue. He noted that there was one
other testifier he would like to hear from.
DAVID DURHAM, EXECUTIVE VICE PRESIDENT AND CHIEF CREDIT
ADMINISTRATOR, MT. MCKINLEY BANK; SECRETARY AND TREASURER,
ALASKA BANKERS ASSOCIATION (via teleconference), read from
prepared remarks. He explained that Mt. McKinley Bank
served the Fairbanks North Star Borough, the Denali
Borough, and the unincorporated areas of the Southeast
Alaska census area. He asserted that Mt. McKinley Bank was
unique, as it was the state's only mutual bank and one of
only a handful in the western United States. He explained
that mutual banks had no owners or shareholders, and the
board of trustees and bank's profits served to benefit the
communities by offering lower rates. The bank also had a
robust donation program.
Mr. Durham asserted that HB 85 not only modernized banking
rules and brought parity for state banks, it also
modernized the state's mutual banking regulations to allow
utilizations of modern technologies. He mentioned online
lenders that had captured a share of the state's lending
market. He mentioned statutes that limited the mutual banks
borrowing. The bill would give mutual banks the same
borrowing capacity as commercial banks and would remove
antiquated provisions which required mutual banks to
sequester a certain amount of earnings for use in meeting
losses, which were unnecessarily duplicative. He explained
that the bill would add provisions that mirrored CERCLA to
protect lenders from liability when foreclosing on
properties with environmental issues.
9:51:14 AM
Mr. Durham addressed the question posed by Representative
Josephson regarding the use of "person" and the
conversations with DEC. He affirmed that DEC had requested
that the term "lender" be used in place of the word
"person" in Section 22 of the bill, and that the definition
of lender be included in statute. The changes had led to
complications. He discussed the CERCLA definition of
"lender" and relayed that after further discussion with
legal counsel, DEC had relayed that it was comfortable with
use of the word "person" in Section 22, as the bill
language already narrowed the scope of applicability for
the section. He used the example of a person that held a
security in a vessel or facility but did not participate in
the management and sought to sell the vessel or facility.
He reiterated that the goal was to align Alaska's law with
federal CERCLA provisions in order to allow banks to
continue to lend on properties throughout the state that
were vital to communities and their well-being. He
requested support for the bill.
Representative Josephson referenced a white paper he had
mentioned earlier that referred to a secured party being
liable, and a carve-out that would prevent liability. He
thought there was a test that asked whether a bank made
environmental compliance decisions or was responsible for
day-to-day decision making or overall operational
functions. He asked if subsection (O) included the three
tests, and if it would be problematic.
9:54:26 AM
Mr. Durham replied in the negative. He elaborated that
CERCLA had specific guidelines for a bank not to carry the
liability, which pertained to participation in management
of the property.
Representative LeBon believed a representative with the DEC
was available online.
LAURA ACHEE, LEGISLATIVE LIAISON, DEPARTMENT OF
ENVIRONMENTAL CONSERVATION (via teleconference), asked
Representative Josephson to restate the language.
Representative Josephson cited the January 11, 2018,
article titled "Indirect Owner/Operator Liability Under
CERCLA," which cited the modification to the law. He could
tell that much of the language in the bill was designed to
match the federal provision, which provided him comfort. He
cited other language in the article and the original intent
of CERCLA (known as superfund law), which responded to
contaminated sites around the country and expressed
liability for various parties that was cured by the 1996
law. He understood that if a bank was "at arm's length"
from the contamination, it should not have a problem
complying with the three-part test.
Ms. Achee answered that it made sense and she believed DEC
would be comfortable with the language in the bill. She
referenced the conversation regarding "person" versus
"lender" and noted that her recollection was the same as
that of the previous testifier and the department was
comfortable with the use of the word person in statute.
9:58:36 AM
TRACY RENO, CHIEF FINANCIAL EXAMINER, DIVISION OF BANKING
AND SECURITIES. DEPARTMENT OF COMMERCE, COMMUNITY AND
ECONOMIC DEVELOPMENT (via teleconference), read from
prepared remarks. She explained that the Division of
Banking and Securities served as a primary regulator for
four state-chartered banks in Alaska. She asserted that the
state's banking statutes had become outdated over time, and
the nationally chartered banks had the advantage of broader
powers from updated federal laws. She referenced the
collaboration between ABA and the division to bridge the
gap between state and federal law to propose HB 85 to
modernize and streamline Alaska's banking law to bring
parity between state and national banks. She asserted that
the bill would allow state banks to be competitive with
modern best practices and would align with the governor's
priorities. The division was supportive of the sections it
requested to be added to the bill.
Co-Chair Merrick OPENED public testimony.
ED MARTIN JR., SELF, KENAI (via teleconference), disclosed
that one of the testifiers worked at a bank he had a loan
with. He shared that he had lived in Alaska since 1965 and
had taken out a loan when he was 19 years old to go into
business. He appreciated that the banks had done well in
the recent year. He thought there were a few things in the
bill to make the banks competitive, and he thought all
Alaskans would benefit from the proposed changes. He was
worried about the timing of when a bank could be shut down
and when it reported the shutdown. He thought the provision
"opened a door" and he did not know if it aligned with
federal standards. He discussed the function of a bank. He
was concerned about a bank abusing the funds deposited by
customers in some way.
10:03:34 AM
Mr. Martin Jr. continued with his testimony. He had trust
in Alaska banks. He mentioned banks being federally insured
and had not known that some banks were not. He discussed
bank loans and collateral. He emphasized that members
should consider what was being accomplished by the bill in
bringing parity to banks. He asked members to consider
oversight. He discussed the board's required meetings. He
supported bankers.
Co-Chair Merrick CLOSED public testimony.
Representative LeBon responded to the issues brought up by
Mr. Martin Jr. He mentioned lending limits for executive
officers and directors of a bank. Based on his own
experience, for simplicity of taking out a loan he would
borrow funds from another bank due to the high degree of
standards required. He addressed the issue related to
required board meetings and suggested there was flexibility
such as Zoom meetings. He stated that the bill would allow
for an option to decide on the best number of meetings for
the bank. He asserted that the proposed change would ensure
that state-chartered banks would be held to a higher
standard than what national banks enjoyed.
10:07:54 AM
Vice-Chair Ortiz realized that Zoom meetings had more
recently developed. He asked if Zoom meetings did not
currently legally count as one of the twelve required
meetings.
Representative LeBon was not certain but knew that banks
had to adhere to the meeting requirements. He noted that
there was not a suggestion to just have one meeting per
year.
Representative Josephson asked how credit unions were
positioned relative to the reforms. He asked if credit
unions would no longer be on equal footing.
Representative LeBon answered that credit unions had their
own supervision and oversight. He considered that
competition between banks and credit unions was an entirely
different conversation. He shared that credit unions
operated as nonprofits and were not required to adhere to
the Community Reinvestment Act. Some of the unevenness
between banks and credit unions had been an issue for
decades, and the bill did not attempt to fix anything
related to competition between the two. He noted that
credit unions had their own legal standing, regulator, and
rules while banks were competitors. He explained that banks
merely wanted parity among themselves between state and
national banks.
10:10:29 AM
Representative Carpenter understood that the bill was about
achieving parity between state and national banks. He
wondered if the administration could speak to how the
changes in the bill could impact credit union regulations
not being contemplated in the bill and how there may or may
not be parity between credit unions and other banks.
Co-Chair Merrick affirmed she would work on getting the
information.
Representative Wool asked about executives taking loans
from banks and appreciated Representative LeBon's comment.
He noted that the bill doubled the amount that an executive
could borrow from the bank, which he thought appeared as if
the bank bosses were being offered more latitude in the
amount they could borrow. He thought the provision went
counter to what the bill was doing. He asked how to
reconcile the two.
Representative LeBon answered that the lending activities
of a bank took a variety of forms: personal loans, mortgage
loans, construction loans, commercial loans, and real
estate loans. He recounted that as a bank executive he had
a mortgage and a personal line of credit, which were
consumer loans. His mortgage loan had been sold to Fannie
Mae and had not been held by the bank. He continued that a
personal line of credit did not come anywhere near $500,000
and each bank would set its own limit. He considered that
the practicality of the language was for a primary home
loan, the vast majority of which were sold on the secondary
market and were not kept by the bank. He suggested that the
limit had been in law for many years, and the proposed
limit adjustment did not provide special treatment but
rather brought bankers up to the level of the customer base
and the average loan size and type. He thought the
provision might look material, but the dollar amount was
not large when put in context. He emphasized that any loan
by a bank officer received regulatory review, required
board of directors' approval, and a higher credit standard.
He noted that a bank would not want to be criticized by a
bank regulator for favoring any type of customer. For any
employee of a bank there was a higher standard of credit
underwriting and expectation, as the bank knew it would be
judged and reviewed on the activity at a very high level.
10:14:54 AM
Representative Rasmussen disclosed that her husband was an
employee at a credit union. She referenced Section 5 and
increasing borrowing limits up to $500,000. She noted it
was not possible to purchase a primary residence for
$150,000 and she did not believe $500,000 was a stretch.
Co-Chair Merrick remarked that there would be a review of
the fiscal notes and a sectional analysis at a future
meeting.
HB 85 was HEARD and HELD in committee for further
consideration.
Co-Chair Merrick reviewed the schedule for the following
meeting.
ADJOURNMENT
10:16:06 AM
The meeting was adjourned at 10:16 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 1 CSHB 132 Sponsor Statement 3.12.21.pdf |
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HB 132 |
| 4 CSHB 132 ver O Sectional Analysis 4.28.2021.pdf |
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HB 132 |
| 3 CSHB 132 Summary of Changes ver W to ver O 4.28.2021.pdf |
HFIN 5/6/2021 9:00:00 AM |
HB 132 |
| 10 HB 132 Letters of Support as of 4.7.21.pdf |
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HB 132 |
| HB 132 Public Testimony by 050521.pdf |
HFIN 5/6/2021 9:00:00 AM |
HB 132 |
| HB 85 Letters of Support 04.21.2021.pdf |
HFIN 5/6/2021 9:00:00 AM |
HB 85 |
| HB 85 Sectional Analysis ver. G 04.22.2021.pdf |
HFIN 5/6/2021 9:00:00 AM |
HB 85 |
| HB 85 Sponsor Statement 04.22.2021.pdf |
HFIN 5/6/2021 9:00:00 AM |
HB 85 |
| HB 85 Summary of Changes version B to version G 04.22.2021.pdf |
HFIN 5/6/2021 9:00:00 AM |
HB 85 |
| HB 132 Sponsor PowerPoint HFIN 050621.pptx |
HFIN 5/6/2021 9:00:00 AM |
HB 132 |