STATE GOVERNMENT RELATIONS
Tax Cut Bill Expanded
Indiana lawmakers approved SB 1, expanding the number of people eligible for anticipated $125 payments this spring under the state's automatic taxpayer refund law. However, a Senate committee gutted the $1 billion House Republican tax cut package within HB 1002, eliminating every tax cut that passed the House.
Senate Strikes Vax Mandate Bill Language
Lawmakers in the Indiana Senate struck language from the House Republican vaccine mandates bill, House Bill 1001, that would have forced employers to accept any religious exemptions without further question.
Under the amended HB 1001, most employers who mandate vaccines for employees would still have to grant medical or religious exemptions, but the bill now mirrors the less stringent federal standard for religious exemptions.
The restrictions in the amended bill also would no longer apply to most health care employers to comply with federal rules or to those that operate professional sports organizations or entertainment venues.
The changes to the bill in the Senate Health and Provider Services Committee were so significant to supporters and opponents that some legislators changed their positions on the bill during the committee hearing.
The bill now awaits second reading for consideration before the entire Senate.
Senate Bill 351 - Controllable Electronic Records
Author: Sen. Chris Garten (R-District 45)
Bill summary: Adds a new chapter to the Uniform Commercial Code that governs transactions involving controllable electronic records and that does the following: (1) Defines "controllable electronic records." (2) Establishes the following: (A) The extent to which a purchaser acquires rights and interests in controllable electronic records. (B) The circumstances under which a qualifying purchaser acquires rights in a controllable electronic record free of any adverse claim. (C) The conditions that must be satisfied for a person to be considered to have control over controllable electronic records. Amends certain sections in the UCC chapter concerning secured transactions to reference controllable electronic records and to provide for the perfection of a security interest in controllable electronic records by: (1) control; or (2) the filing of a financing statement. Amends the Indiana statute concerning unclaimed personal property to: (1) conform the definition of "controllable electronic record" in that statute to the new definition set forth in the UCC; and (2) authorize (rather than require, as specified in current law) the attorney general to adopt rules regarding controllable electronic records and digital assets, to the extent such rules are consistent with, and not otherwise covered by: (A) the bill's provisions; or (B) any other Indiana law concerning controllable electronic records or digital assets.
Latest action: The bill was passed out of the House Judiciary Committee by a vote of 9-0 and will be eligible for second reading on Monday.
Senate Bill 358 - Consumer Data Protection
Author: Sen. Liz Brown (R-District 15)
Bill Summary: Establishes a new article in the Indiana Code concerning consumer data protection, to take effect Jan. 1, 2024. Sets forth the following within the new article: (1) Definitions of various terms that apply throughout the article. (2) Exemptions from the bill's requirements concerning the responsibilities of controllers of consumers' personal data. (3) The rights of an Indiana consumer to do the following: (A) Confirm whether or not a controller is processing the consumer's personal data. (B) Correct inaccuracies in the consumer's personal data that the consumer previously provided to a controller. (C) Delete the consumer's personal data held by a controller. (D) Obtain a copy or representative summary of the consumer's personal data that the consumer previously provided to the controller. (E) Opt out of the processing of the consumer's personal data for certain purposes. (4) The responsibilities of controllers of consumers' personal data. (5) The roles of controllers and processors with respect to a consumer's personal data. (6) Requirements for data protection assessments by controllers of consumers' personal data. (7) Requirements for processing de-identified data or pseudonymous data. (8) Limitations as to the scope of the new article. (9) The authority of the attorney general to investigate and enforce suspected or actual violations of the new article. (10) The establishment of a new consumer privacy fund: (A) consisting of civil penalties collected by the attorney general in enforcement actions under the new article; and (B) to be used in supporting the work of the attorney general in enforcing the new article. (11) The preemption of local rules, regulation, and laws regarding the processing of personal data.
Latest action: The bill was passed out of the House Committee on Commerce, Small Business and Economic Development by a vote of 12-0 and will be eligible for second reading on Monday.
Senate Bill 371 - Replacement of the London Interbank Offered Rate
Author: Sen. Andy Zay (R-District 17)
Bill Summary: Replacement of the London Interbank Offered Rate. Adds provisions to the title in the Indiana Code concerning financial institutions to provide for the replacement, by operation of law, of the United States Dollar LIBOR as the benchmark index for any contract, security, or instrument, with a recommended benchmark replacement that is based on the secured overnight financing rate (SOFR). Sets forth certain events that serve to trigger the replacement of LIBOR with the recommended benchmark replacement. Specifies that such replacement by operation of law applies with respect to a contract, security, or instrument that either: (1) contains no fallback provisions setting forth a methodology or procedure for determining a benchmark replacement; or (2) contains fallback provisions that result in a benchmark replacement that: (A) is not a recommended benchmark replacement; and (B) is based in any way on any LIBOR value. Provides that if a recommended benchmark replacement becomes the benchmark replacement for any contract, security, or instrument, any applicable benchmark replacement conforming changes become an integral part of the contract, security, or instrument by operation of law. Provides that the bill's provisions do not alter or impair contracts, securities, or instruments that contain certain provisions. Provides that the selection or use of a recommended benchmark replacement as a benchmark replacement for a contract, security, or instrument: (1) constitutes a commercially reasonable replacement for and a commercially substantial equivalent to LIBOR; and (2) does not: (A) impair or affect certain rights and performance obligations under; (B) constitute a breach of; or (C) void or nullify; the contract, security, or instrument. Provides that a person is not liable for damages and is not subject to any claim for equitable relief, in connection with: (1) the selection or use of a recommended benchmark replacement; or (2) the determination, implementation, or performance of benchmark replacement conforming changes; with respect to any contract, security, or instrument. Makes a cross reference to this immunity provision in the chapter of the Indiana Code that lists statutes outside of Title 34 of the Indiana Code that confer civil immunity.
Latest action: The bill passed out of the House 95-0. It has now been returned to the Senate without amendments.
FEDERAL GOVERNMENT RELATIONS
Fed Nominees Could Remain in Limbo for Months
Republican members of the Senate banking committee have delayed the confirmation process for President Joe Biden's nominees to the Federal Reserve by refusing to participate in a key vote. The senators cited concerns about the nomination of Sarah Bloom Raskin as vice chair for supervision. However, committee Chair Sherrod Brown, D-Ohio, says the nominees will be considered as a slate.
It may take months for the Senate Banking Committee to find a resolution to the Republican blockade of the nominees, possibly extending into the spring, said Cowen Washington Research Group analyst Jaret Seiberg. Senate Democrats could take a vote to change the rules around nominees, or Senate Banking Chair Sherrod Brown, D-Ohio, could move Sarah Bloom Raskin's nomination to the floor after the other nominees are cleared.
Republican Lawmakers Call for Changes to CFPB's Section 1071 Proposal
Three GOP lawmakers raised concerns about the Consumer Financial Protection Bureau’s pending rulemaking to implement Section 1071 of the Dodd-Frank Act. They cited concerns received from industry stakeholders, including banks of all sizes. Reps. Blaine Luetkemeyer (R-Mo.), French Hill (R-Ark.) and Roger Williams (R-Texas) flagged several issues and called on the CFPB to remedy these issues within the final rulemaking.
In particular, the lawmakers expressed concerns about the rule's potential effects on small banks, urging the CFPB "to exclude as many small financial firms as possible" and called for a more extended implementation period, given the rule's complexity.
The lawmakers also took issue with a provision of the proposed rule that would require financial institutions to guess the race of applicants who choose not to provide their information. "Loan officers at financial institutions have no expertise to determine the race or ethnicity of individuals, nor should they," the lawmakers wrote, calling for the removal of the provision. Finally, they emphasized that the CFPB "must fully disclose what information will become public before the final rule is issued and must conduct a separate rulemaking process, including notice and comment, related to this provision of the law."
OCC's Hsu: Agencies to Release CRA NPR in 'Not-Too-Distant Future'
During remarks at an industry event, Acting Comptroller of the Currency Michael Hsu addressed upcoming plans to modernize the regulation implementing the Community Reinvestment Act. Hsu said that "in the not-too-distant future," the Office of the Comptroller of the Currency, along with the Federal Reserve and Federal Deposit Insurance Corp., would release a joint notice of proposed rulemaking, adding that "several objectives" are guiding the agencies work.
He said revised regulations are intended to increase levels of CRA activity. Helping address existing disparities and ensure that banks are responsive to the local needs of low and moderate-income communities, not just applying "one-size-fits-all" solutions. In addition, Hsu said it is important to increase the "clarity, consistency, and transparency" of CRA supervisory expectations and standards regarding activities that are eligible for CRA credit and how eligible activities are evaluated. He also noted that CRA standards needed to be brought up to date, reflecting "changes in the business of banking," in particular the increased use of mobile and internet delivery channels that were not in place when the regulation was last updated.
He also noted that the Fed's 2020 advance notice of proposed rulemaking on CRA modernization served as the "basic framework" for the interagency conversations around this latest attempt to modernize the three-decade-old regulations. The OCC previously issued a unilateral rule to modernize the CRA under former Comptroller Joseph Otting but was later rescinded.
Senate Committee Debates Future of Stablecoin Regulation
Republicans and Democrats on the Senate banking committee outlined differing views on how stablecoins should be regulated in a hearing Tuesday. One sticking point is whether issuance of stablecoins should be limited to banks, as recommended by Treasury undersecretary for domestic finance Nellie Liang, or whether other companies should be free to issue them.
Josh Gottheimer, D-N.J., has drafted a bill aimed at establishing regulations around stablecoins, which would define some stablecoins as "qualified" if they can be redeemed one-to-one for dollars. Federally backed banks or any nonbank that agrees to keep 100% cash collateral would be allowed to issue qualified stablecoins under the legislation.