Legislature(2001 - 2002)

04/03/2001 01:30 PM Senate L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                     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                                                               
     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                                                            
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                                                            
     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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