STATE GOVERNMENT RELATIONS
Legislative Briefing & Reception
The IBA thanks all who attended this year’s Legislative Briefing & Reception on Wednesday at the Hyatt Regency Indianapolis. It was an outstanding evening, and we were delighted to host the legislative reception in honor of the Indiana General Assembly.
The evening began with a legislative briefing, during which Dax Denton and Eric Augustus of the IBA Government Relations Team gave an overview of important issues pertaining to the banking community. Afterward IBA Chairman Lucas White presented the 2019 Indiana BANKPAC Awards, followed by an informative and engaging discussion on Indiana politics from the panelists of Indiana Week in Review.
Finally, we hosted our legislative reception for IBA-member bankers; associate members; and statewide elected officials, their staffs and spouses. Attendees included 154 IBA members (128 bankers and 26 associate members) and 63 Indiana legislators, representing a turnout of over 40% of the entire Indiana General Assembly.
The IBA appreciates our members taking the time to network with Indiana’s decision-makers. Your advocacy is essential to the success of the banking community.
FLD Day at the Statehouse
Register now for the FLD Day at the Statehouse on Feb. 10 at the Hilton Indianapolis Hotel & Suites. This free event will provide opportunities to network and learn more about grassroots advocacy and its importance to the banking industry. Attendees additionally will learn about the legislative process, see the Indiana Statehouse and have the opportunity to visit with legislators. FLD Day at the Statehouse is a great way to get engaged. For questions, contact Josh Myers at 317-333-7165.
House Bill 1109 - Registration of Telemarketers
Author: Rep. Matt Lehman, R-Berne
Summary: The amendment addresses use of a consumer’s Social Security number in credit files. It repeals from the statute governing consumer sales the chapter that sets forth certain requirements for a consumer reporting agency that uses a Social Security number as a factor in determining whether a file maintained by the consumer reporting agency matches the identity of an individual who is the subject of a credit inquiry.
Latest Action: House Bill 1109 was amended to include the amendment in House Utilities, Energy and Telecommunications Committee on Jan. 15. The bill passed the committee unanimously.
House Bill 1109 Amendment - Registration of Telemarketers
Author: Rep. Matt Lehman, R-Berne
Summary: The amendment addresses use of a consumer’s Social Security number in credit files. It repeals from the statute governing consumer sales the chapter that sets forth certain requirements for a consumer reporting agency that uses a Social Security number as a factor in determining whether a file maintained by the consumer reporting agency matches the identity of an individual who is the subject of a credit inquiry.
Latest Action: House Bill 1109 was amended to include the amendment in House Utilities, Energy and Telecommunications Committee on Jan. 15. The bill passed the committee unanimously.
Senate Bill 444 – Public Deposits With Credit Unions
Author: Sen. Chip Perfect, R-Lawrenceburg
Summary: The bill removes a provision in the statute governing state-chartered credit unions that limits the total amount of public funds that may be deposited by state and county governments and political subdivisions in a state-chartered credit union to 20% of the total assets of the credit union not including such public funds.
Latest Action: The bill was assigned to the Senate Tax and Fiscal Policy Committee.
House Bill 1409 – Credit Reporting for Consumers and Medical Care
Author: Rep. Dan Forestal, D-Indianapolis
Summary: This bill provides that a consumer may provide to a creditor a note or other written certification that: (1) is signed by a health care provider; and (2) indicates that the consumer was hospitalized or under medical care for a specified period in connection with a medical condition or an illness. It provides that if the creditor receives the note or certification not later than 30 days after the end date of the period of hospitalization or medical care, the creditor shall: (1) promptly notify each consumer reporting agency to which the creditor has reported a delinquency that was incurred by the consumer at any time during the period: (A) beginning 15 days before the start date of the consumer’s hospitalization or medical care; and (B) ending 15 days after the end date of the consumer’s hospitalization or medical care; and (2) request that the consumer reporting agency delete the record of the delinquency from the consumer’s file. It provides that if certain delinquent account actions have been taken with respect to the account, the creditor shall: (1) promptly notify any third-party furnisher of information to credit reporting agencies; and (2) request the third-party furnisher to request any consumer reporting agency to which the information about the delinquent account action was furnished to delete the record of the delinquent account action from the consumer’s file. It provides that a creditor may not report to a consumer reporting agency any delinquency incurred by the consumer during the period: (1) beginning 15 days before the start date of the consumer’s hospitalization or medical care; and (2) ending 15 days after the end date of the consumer’s hospitalization or medical care; unless 60 days have elapsed from the end date of the period of hospitalization or medical care, and the consumer’s account remains delinquent. It provides that not later than five business days after receiving a request to delete information from a consumer’s file under these provisions, a consumer reporting agency shall delete the information from the consumer's file. It provides that: (1) a creditor; or (2) a third-party furnisher; that requests that a consumer reporting agency delete information from a consumer’s file is not liable for any action taken or not taken by the consumer reporting agency in response to the request. It specifies that the federal Fair Credit Reporting Act does not exempt: (1) a creditor; (2) a third-party furnisher; or (3) a consumer reporting agency; from the bill’s provisions. It provides that a person who violates the bill’s provisions commits a deceptive act that is subject to the penalties set forth in the statute concerning deceptive consumer sales.
Latest action: This bill has been assigned to the House Financial Institutions Committee and has not been scheduled for a hearing.
FEDERAL GOVERNMENT RELATIONS
Lawmakers Concerned About 'Real-World Impacts' of CECL Standard
During a House Financial Services subcommittee hearing on Wednesday, lawmakers on both sides of the aisle expressed serious concerns about the economic effects of the Financial Accounting Standards Board’s current expected credit loss standard on the cost and availability of credit for consumers.
"Switching to CECL…will have significant real-world impacts on community banks, minority banks and other providers of credit and banking services," said Rep. Gregory Meeks (D-N.Y.), warning that if banks curb lending as a result of CECL, it could create a ripple effect that could disproportionately affect low- to moderate-income borrowers. Rep. Vicente Gonzalez (D-Texas), who last year co-sponsored an industry-supported bill calling for an economic impact study of CECL, added that "the CECL standard leaves many questions unanswered, even for those who have already implemented it."
FASB Chairman Russell Golden told lawmakers that his organization will closely monitor information from institutions already implementing the standard – as well as findings from a forthcoming Treasury study on CECL’s effect on regulatory capital – to understand if changes are needed to the standard ahead of the 2023 implementation deadline for smaller institutions. He added that "we’re always open to improving our standards…there will be a lot of information about the CECL rollout from the larger public companies that we can all review and study."
FHFA Weighs More Forceful Action on 'Continued Threat' of PACE Loans
Building on previous warnings about risks associated with home retrofitting loans financed through tax assessments, the Federal Housing Finance Agency on Wednesday asked for public input on additional steps to deal with the "continued threat" that these loans pose to homeowners and the housing finance system.
The controversial Property Assessed Clean Energy, or PACE, loans for energy-efficient retrofitting – such as solar panels and high-efficiency air conditioners – often take lien priority over existing and subsequent first mortgage liens. FHFA has warned since 2014 that GSEs Fannie Mae and Freddie Mac cannot buy mortgages on homes with a first-lien PACE loan attached to it, yet PACE loans still "present a threat to the quality and stability of large amounts of [GSE] loans," the agency indicated.
Specifically, FHFA asked whether it should direct the GSEs to reduce loan-to-value ratios or increase loan-level price adjustments on new loan purchases in states or localities where PACE loans are available, and if so, by how much and for what loans. The agency also sought feedback related to Federal Home Loan Bank advance collateral, how the GSEs can best obtain often-obscure PACE loan information, and PACE loan effects on consumers. Responses to FHFA are due by March 16.
Fed Pays $54.9 Billion to Treasury
The Federal Reserve System paid $54.9 billion out of its annual net income to the U.S. Treasury in 2019, according to figures released last Friday. The payments declined from previous years, falling from $80.6 billion in 2017 and $65.3 billion in 2018.
The Federal Reserve Banks’ net income in 2019 was estimated at $55.5 billion, a $7.6 billion decrease from the year prior. The reduction in the Fed banks’ net income was attributed primarily to a decrease in interest income on securities acquired through open market operations and an increase in interest expense on securities sold under agreement to repurchase. Fed bank income comes mostly from interest on securities purchased through the system’s open market operations.
Treasury payments are calculated after the costs of operations, dividends and other expenses. The regional Fed banks had net operating expenses of $4.5 billion in 2019, and the Fed system also paid $837 million to produce and retire currency, $814 million to fund the Federal Reserve Board of Governors and $519 million for the operations of the Consumer Financial Protection Bureau. Dividend payments to Federal Reserve member banks totaled $714 million.