STATE GOVERNMENT RELATIONS
Second Half of Session Begins With Committee Work
This week officially marked the start of the second half of session. During the second half, the House considers legislation passed by the Senate during the first half and vice versa. The process matches the procedural requirements of the first half of session. Committee work got off to a slow start during this first week back as planning for the remainder of session begins.
As the second half of session begins, the IBA Government Relations Team continues to voice industry concerns on many critical bills. Following are some of the bills being addressed.
Senate Bill 188 – Revised Uniform Unclaimed Property Act
Author: Sen. Eric Koch (R)
Summary of legislation: Repeals the Uniform Unclaimed Property Act and replaces it with the Revised Uniform Unclaimed Property Act. Makes conforming amendments.
Senate Bill 197 – Criminal Law Issues
Author: Sen. Mike Young (R)
Summary of legislation: Specifies that a conviction for certain sex offenses requires mandatory revocation of a teaching license. Provides that a child who: (1) commits indecent display by a youth; or (2) commits dangerous possession of a firearm or provides a firearm to another child in certain circumstances; has committed a delinquent act subject to the jurisdiction of a juvenile court. Provides that bail provisions that apply to persons on probation and parole also apply to persons on community supervision. Removes and replaces certain references to “official investigations,” “official proceedings” and methods of reporting. Adds to the crime of resisting law enforcement the act of forcibly resisting, refusing, obstructing or interfering with a law enforcement officer’s lawful: (1) entry into a structure; or (2) order to exit a structure. Provides that all Level 1 and Level 2 felonies may be prosecuted at any time. Repeals synthetic identity deception, and consolidates it with identity deception. Provides that all felony battery and domestic battery crimes are crimes of violence, and adds arson and criminal confinement to the list of crimes of violence. Makes attempted murder a predicate offense for the use of a firearm sentence enhancement. Makes certain changes to the definition of “substantially similar” for purposes of the controlled substance law. Adds controlled substance analogs to certain statutes prohibiting controlled substances in penal facilities. Repeals and consolidates various fraud and deception offenses. Defines “financial institution” for purposes of crimes involving financial institutions. Defines “pecuniary loss” for purposes of fraud in connection with insurance. Repeals or decriminalizes certain infrequently charged misdemeanors. Specifies that a person convicted of attempted murder is a sex or violent offender. Adds to the definition of “violent criminal” a person convicted of certain battery and domestic battery offenses. Adds adult protective services investigator to the definition of “public safety official” for purposes of the battery statute. Specifies that locking the door to a building or structure denies entry to another person for purposes of the trespass statute. Makes fraud a Level 4 felony if the amount involved is at least $100,000. Defines attempted murder as a “serious violent felony.” Makes conforming amendments.
Senate Bill 346 – Financial Institutions and Consumer Credit
Author: Sen. Eric Bassler (R)
Summary of legislation: For purposes of the statutes governing: (1) first-lien mortgage transactions, (2) the Uniform Consumer Credit Code, and (3) financial institutions; changes references to federal laws within those statutes from federal laws as in effect on Dec. 31, 2019, to federal laws as in effect on Dec. 31, 2020. Amends the statute concerning loans made by a credit union to the credit union’s members to eliminate certain requirements with respect to loans secured by real estate. Amends the definition of “check” for purposes of the statute governing licensed cashers of checks to remove a reference to a “personal money order.”
Senate Bill 370 – Limitation on Actions Concerning Deposit Accounts
Author: Sen. Andy Zay (R)
Summary of legislation: Amends the statute concerning the statute of limitations for actions upon promissory notes, bills of exchange, or other written contracts.
Senate Bill 400 – Statewide Electronic Lien and Title System
Author: Sen. Chris Garten (R)
Summary of legislation: Requires the Indiana Bureau of Motor Vehicles to implement a statewide electronic lien and title system to process: (1) vehicle titles, (2) certificate of title data in which a lien is notated and (3) the notification, maintenance and release of security interests in vehicles; through electronic means instead of paper documents. Provides that the bureau may: (1) contract with one or more qualified vendors to develop and implement a system, or (2) develop an interface to provide qualified electronic lien service providers secure access to data to facilitate the creation of a system. Sets forth certain requirements that apply if the bureau elects to implement the system through a qualified vendor versus through qualified electronic lien service providers. Specifies that a contract entered into between the bureau and: (1) a qualified vendor, or (2) a qualified electronic lien service provider; may not provide for any costs or charges payable by the bureau to the qualified vendor or the qualified electronic lien service provider. Sets forth dates by which the bureau must implement and allow or require the use of: (1) a statewide electronic lien system, and (2) a statewide electronic title system. Sets forth certain conditions that apply to the use of a statewide electronic lien system implemented by the bureau under these provisions. Authorizes the bureau to adopt rules, including emergency rules, to implement these provisions.
House Bill 1004 – Small Business Restart Grant Program
Author: Rep. Shane Lindauer (R)
Summary of legislation: Establishes the Hoosier Hospitality Small Business Restart Grant Program to provide grants to eligible entities to accelerate economic recovery from the impacts of the COVID-19 pandemic. Establishes the Small Business Restart Grant Fund. Provides that the Indiana Economic Development Corp. administers the program and fund. Provides criteria for grants. Allows the IEDC to award grants from the fund. Makes an appropriation.
House Bill 1079 – Practice of Dentistry; Virtual Claims Payments
Author: Rep. Dennis Zent (R)
Summary of legislation: Amends the definition of dentistry. Provides that a dentist may order and administer an immunization that is recommended by the federal Centers for Disease Control and Prevention Advisory Committee on Immunization Practices for individuals who are not less than 11 years of age, if the dentist: (1) is certified in cardiopulmonary resuscitation, (2) has successfully completed a course of training in immunization that meets specified requirements, and (3) administers the immunization in accordance with a protocol that includes specified requirements and procedures. Prescribes reporting requirements for a dentist who administers an immunization. Provides that a dentist: (1) is not required to administer immunizations, and (2) is not required to complete immunization training if the dentist chooses not to administer immunizations. Provides that a health insurance plan, including a health management organization contract, may not require a dental provider to accept payment under the health insurance plan by virtual claim payment. Requires a health insurer, including a health maintenance organization, to do the following before providing payment to a dental provider by electronic funds transfer, including by virtual claim payment: (1) notify the dental provider of any fees associated with the electronic funds transfer; (2) advise the dental provider of the methods of payment available under the health insurance plan and provide clear instructions to the dental provider as to how to select an alternate payment method.
House Bill 1255 – Probate and Property Matters
Author: Rep. John Young (R)
Summary of legislation: Provides that a testator may execute a will in two or more counterparts. Specifies certain requirements for a will executed in two or more counterparts. Provides that a self-proving clause may be incorporated into or affixed to a will. Specifies certain requirements for self-proving clauses and wills. Specifies that certain photographic, video and audio evidence may be used as evidence with respect to the execution of a will. Exempts a will from the need for a recertification or a re-execution in certain instances. Specifies certain requirements concerning the execution of an electronic will. Allows an attorney or paralegal to supervise the execution of an electronic will. Exempts electronic wills from the need for recertification or re-execution in certain instances. Specifies that certain photographic, video and audio evidence may be used as evidence with respect to the execution of an electronic will. Specifies certain requirements concerning the execution of a power of attorney. Allows a power of attorney to be executed in two or more counterparts. Specifies certain requirements for the execution of a power of attorney in two or more counterparts. Allows a self-proving clause to be incorporated into or affixed to a power of attorney. Specifies certain requirements for self-proving clauses incorporated into or affixed to a power of attorney. Specifies that certain photographic, video and audio evidence may be used as evidence with respect to the execution of a power of attorney. Provides that an electronically signed and notarized electronic power of attorney is valid if the electronic power of attorney complies with certain specified requirements. Specifies certain requirements for attesting witnesses involved in the execution of a power of attorney or an electronic power of attorney. Allows a self-proving clause to be incorporated into or affixed to a power of attorney. Specifies that certain photographic, video and audio evidence may be used as evidence with respect to the execution of an electronic power of attorney. Provides that certain persons are ineligible to sign certain trust instruments. Requires certain transfer on death conveyances to occur in the presence of a disinterested witness. Repeals certain provisions concerning mortgages, conveyances and other written instruments that are executed in a foreign country. Repeals certain provisions concerning the affixing of a private seal or ink scroll on certain conveyances involving land or interests in land. Specifies certain requirements concerning land conveyances performed by attorneys in fact. Requires certain notarial acts to accompany the recording of certain conveyances. Requires an English translation for certain instruments, acknowledgments and proofs when the original document is not in English. Repeals a provision concerning the recording of a conveyance, mortgage or other instrument in a county other than the county where the conveyance, mortgage or other instrument is required to be recorded. Repeals a provision concerning the recording of a conveyance that is acknowledged outside Indiana but within the United States. Specifies: (1) certain prerequisites, and (2) a certain form; for the recording of certain instruments. Repeals a provision concerning the receipt of an acknowledgment by a public officer. Specifies that an instrument’s acknowledgment or proof is incomplete when an instrument does not include an accompanying certificate. Provides that the transcript of an instrument that is recorded without a certificate cannot be read into or received as evidence. Specifies requirements concerning electronic recording of certain instruments concerning real property. Requires county recorders to implement specified functions concerning the: (1) acceptance, (2) receipt, (3) indexing, (4) storage, (5) archiving, and (6) transmittal; of electronically recorded instruments. Specifies certain requirements concerning the recording of a paper or tangible copy of an electronic instrument. Repeals a provision concerning the acknowledgment of certain instruments and the performance of certain notarial acts for a person serving in the armed forces, merchant marine or outside the United States in connection with a wartime activity. Repeals provisions concerning: (1) certain notarial acts, and (2) acknowledgments; and their respective uses as prima facie evidence. Repeals a provision concerning certain executed instruments and a failure to state the location of the instrument’s execution or any accompanying acknowledgment, if applicable. Provides that certain notarial acts are considered to have been performed in Indiana when certain specified criteria are met. Requires a county recorder’s office to provide notice of office closures that last three or more days. Defines certain terms. Makes conforming amendments.
It’s Not Too Late to Register for Today’s Virtual Legislative Briefing
Join us for the virtual 2021 IBA Legislative Briefing, scheduled for today at 1:30pm. We have transitioned our annual grassroots advocacy event to the safety of a virtual format, providing an opportunity for members to engage with Indiana lawmakers and discuss legislative issues important to the banking industry. Learn more and register here.
FLD Virtual Day at the Statehouse
Register now for the FLD Virtual Day at the Statehouse, scheduled for April 9. This is an opportunity for emerging bank leaders to network with peers and learn more about grassroots advocacy and the legislative process. If you have an interest in politics, or if you just want to do your part to promote the future success of the banking industry, register now to unlock your potential as an industry advocate.
FEDERAL GOVERNMENT RELATIONS
New PPP Interim Final Rule and Forms
Yesterday the Small Business Administration hosted a webinar addressing the new PPP interim final rule and forms. The SBA explained in the webinar how lenders, according to the new interim final rule, should process loans made by Schedule C filers who are able to calculate the borrower’s maximum loan amount using gross income. This information is primarily found on slide 7 in the PowerPoint.
Other takeaways from yesterday’s webinar are:
- SBA will begin accepting new applications for Schedule C filers on Friday, March 5. SBA has issued the forms in a “fillable” PDF form, after initially publishing a non-fillable PDF form. (All of SBA’s forms are available here.)
- SBA recommended that lenders wait until after 9 a.m. ET on March 5 to submit the new loan application forms (revised as of March 3), to avoid potential technical issues in their system’s transition to the new forms.
- Also on March 5, SBA will begin accepting only the forgiveness forms as revised on Jan. 19. (Those forms also are available here.)
PPP Lenders Must Use Updated Forgiveness Forms Starting Today
Beginning today, March 5, the Small Business Administration will accept only the revised versions of Paycheck Protection Program loan forgiveness forms – Form 3508, 3508S and 3508EZ – that were issued Jan. 19. SBA will also begin accepting the first-draw and second-draw PPP loan application forms today that were issued earlier this week on March 3.
Forms are available in a fillable format.
SBA Adjusts PPP Payroll Calculation for Form 1040, Schedule C Filers
The Small Business Administration on Wednesday issued an interim final rule implementing recent changes to the Paycheck Protection Program. The interim final rule allows individuals who file an IRS Form 1040, Schedule C to calculate their maximum loan amount using gross income. SBA has issued updated forms for borrowers and lenders reflecting these changes and step-by-step loan amount calculations.
Previously, PPP rules defined payroll costs for individuals who file Form 1040, Schedule C as payroll costs (if employees exist) plus net profits, which is net earnings from self-employment. This formula effectively excluded many sole proprietors from obtaining PPP loans, particularly those with very little or negative net profit.
The interim final rule also stated that this calculation change will apply only to loans approved after the rule’s effective date. Borrowers that have already had their loans approved cannot increase their PPP loan amounts based on the new maximum loan formula.
Additionally, businesses electing to use gross income to calculate their first-draw PPP loans will only have a safe harbor presumption of making the necessary certification of economic necessity if they reported $150,000 or less in gross income on their Schedule C being used to apply for a first-draw PPP loan. Borrowers with reported gross income greater than $150,000 will be subject to additional SBA review.
Finally, the interim final rule removes a restriction on business at least 20% owned by an individual who was arrested for or convicted of a felony related to financial assistance fraud in the previous five years or any other felony within the previous year from obtaining PPP loans. It also removes a restriction on businesses at least 20% owned by an individual who is delinquent on a student loan from receiving PPP loans.
Second draw borrower application form
Borrower Application Form for Schedule C Filers Using Gross Income
Second Draw Borrower Application Form for Schedule C Filers Using Gross Income
Second draw lender application form
Treasury Announces $9 Billion Investment in CDFIs, MDIs
The Treasury Department yesterday announced that it will invest $9 billion in community development financial institutions and minority depository institutions through the newly established Emergency Capital Investment Program. The program is designed to support these institutions’ efforts to provide financial products and services for small and minority-owned businesses and consumers that have been affected by COVID-19.
Under the program—which was established as part of the December COVID-19 relief bill—Treasury investments may take the form of senior preferred stock or subordinated debt, depending on the type of applicant and other factors. The program includes set-asides of $2 billion for institutions with less than $500 million in assets and $2 billion for institutions with less than $2 billion in assets. Applications for funding must be submitted by Friday, May 7.
Treasury has also announced additional support for CDFIs and MDIs through the CDFI Rapid Response Program and the Emergency Support and Minority Lending Program.
OCC Updates Comptroller's Handbook Booklet
The OCC yesterday issued an update to its Servicemembers Civil Relief Act booklet in the Comptroller's Handbook. The booklet provides information and procedures for examiners about the consumer protections that servicemembers are eligible for under the Servicemembers Civil Relief Act.
GSEs Extend Forbearance Options for Multifamily Property Owners
The Federal Housing Finance Agency has announced that Fannie Mae and Freddie Mac will extend mortgage forbearance through June 30 for multifamily property owners, provided they notify tenants in writing about protections available during the forbearance period and suspend all evictions for renters unable to pay rent due to the coronavirus pandemic. Evictions must be deferred for the entire time the property owner remains in forbearance.
House Passes $1.9T Coronavirus Rescue Bill
The House early Saturday morning approved a $1.9 trillion coronavirus relief bill by a vote of 219 to 212. Among other provisions, the bill includes another round of $1,400 economic impact payments that will be sent to eligible recipients.
The bill now moves to the Senate, where it is expected to be amended. Leaders in the House and Senate would like to send the bill to President Biden by March 12.
FHFA Authorizes $1B for Affordable Housing
The Federal Housing Finance Agency has authorized the disbursement of $1.09 billion for Fannie Mae and Freddie Mac’s affordable housing allocations for 2020, its largest amount ever disbursed.
Funds: The authorized funds break down as follows: $711 million will go to the Department of Housing and Urban Development’s Housing Trust Fund, and $383 million will go to the Department of the Treasury’s Capital Magnet Fund.
Background: The Housing Trust Fund allocates money annually to states and state-designated entities for producing or preserving affordable housing. The Capital Magnet Fund competitively awards money for affordable housing activities.
Senate Confirms Raimondo as Commerce Secretary
The Senate on Tuesday voted 84 to 15 to confirm Gina Raimondo as secretary of commerce. Before her appointment to President Biden’s cabinet, Raimondo had been serving as governor of Rhode Island since 2015.
CFPB Report: Share of Delinquent Mortgages Doubles During Pandemic
The number of homeowners that are behind on their mortgages has doubled since the beginning of the pandemic, with 6% of mortgages in delinquency as of December 2020, according to a new report issued by the Consumer Financial Protection Bureau on Monday. A total of 2.1 million mortgages are considered “seriously delinquent,” with borrowers more than 90 days behind on making their payments. In addition, an estimated 8.8 million tenant households are behind on their rents, the bureau found.
While COVID-19 relief programs have reduced the number of foreclosures and evictions thus far, the bureau estimated that 11 million families could be at risk of losing their homes as COVID-19 relief measures expire. As of January 2021, there were 2.7 million borrowers in active forbearance – and of those, more than 900,000 will have been in forbearance for over a year as of April 2021.
The CFPB noted that 263,000 seriously delinquent borrowers have not taken forbearance to date, and warned that should COVID-19 relief options expire before they do so, they would have limited options to avoid foreclosure. On a positive note, however, the bureau found that “most borrowers that have exited forbearance have been able to resume their payments without issue.”
IBA COVID-19 Updates
The IBA has several COVID-19 resources and updates available at our website.