- Количество слайдов: 50
2009 Legislative Update Presented by David J. Boneno 2009 Bank Counsel Conference
BILLS ENACTED INTO LAW
BANKING & OFI REGULATED ACTIVITY
Destruction of Collateral-Felony • ACT 152; Effective 8/15/2009 • LBA sponsored • Increases the penalty to a felony in cases where the value of the secured collateral is $1, 000 or more. • The felony offense is punishable by fines up to $1, 000 and/or imprisonment for up to one year. • (See La. R. S. 14: 72. 4(B)).
Destruction of Collateral-offense • § 72. 4. Disposal of property with fraudulent or malicious intent • A. It is unlawful for any person, who having executed a security agreement under Chapter 9 of the Louisiana Commercial Laws (R. S. 10: 9 -101 et seq. ) on movable property, to sell, assign, exchange, injure, destroy, conceal, or otherwise dispose of all or any part of the encumbered property with fraudulent or malicious intent to defeat the mortgage or security interest, or remove the encumbered property from the location designated in the security agreement, if any, or from the parish where it was located at the time of the granting of the security interest without written consent of the secured party, with fraudulent or malicious intent to defeat the security interest.
Unclaimed Property-Bank-Issued Checks • ACT 86; Effective 8/15/2009 • LBA sponsored. • Clarifies that official bank issued checks purchased from banks in this state revert to the custody of the state of La. if they are determined to be “presumed abandoned” property. • See La. R. S. 9: 156(7). • See Attachment-Act 86
Unclaimed Property-Bank-Issued Checks • La. R. S. 9: 156. Rules for taking custody • Unless otherwise provided in this Chapter or by other statute of this state, property that is presumed abandoned, whether located in this or another state, shall be subject to the custody of this state if any of the following applies: • (7) The property is a traveler's check, cashier's check, teller's check, or other official bank issued check, or money order purchased in this state, or the issuer of the traveler's check, cashier's check, teller's check, or other official bank issued check, or money order has its principal place of business in this state and the issuer's records do not show the state in which the instrument was purchased or show that the instrument was purchased in a state that does not provide for the escheat or custodial taking of the property.
Payable on Death Accounts • • ACT 499; Effective 8/15/2009 LBA sponsored. Eliminates the concept of “qualifying beneficiaries”. Requires affidavit in authentic form be used by POD account depositor to state the named beneficiary(s). Change corresponds with FDIC regulation change eliminating requirement of qualifying beneficiary as a POD requirement. Bank may rely on affidavit to disburse. Death certificate of the depositor required. See La. R. S. 6: 314, 6: 766. 1, and 6: 1255. See Attachments.
Insurance Sales-Referral Fees • Act 332, effective 8/15/2009. • LBA sponsored. See La. R. S. 22: 1598 • Allows bank loan officers to receive referral fees from bank owned insurance agencies for the referral of customers who are required to receive insurance as part of loan transactions. • Such a referral fee shall not be in the form of an insurance sales commission and shall be paid solely on the basis of the referral without regard to whether insurance is actually purchased from the agency. • Disclosure requirements must be followed, which include notifying the customer that they are not required to purchase insurance through the financial institution, and that the customer’s choice of another insurance provider will not affect the financial institution’s credit decision or credit terms.
Insurance Sales-Referral Fees • Commissions: Section 1598 shall not preclude a person directly or indirectly responsible for making a specific loan or extension of credit, who is a licensed insurance producer, from soliciting and selling insurance to a loan customer and earning a commission, so long as the solicitation and sale is conducted after the final loan decision has been communicated to the customer in writing in accordance with Section 1597.
Residential Mortgage Fraud • Act 197, effective 8/15/2009. • LBA sponsored. • Creates a specific statute that criminalizes mortgage fraud in Louisiana. • Residential mortgage fraud has been a high profile issue nationwide over the last few years and Louisiana now has a specific statute that applies to all lenders and other persons involved in the mortgage lending process that knowingly make misstatements or employ schemes during the mortgage process with intent to defraud. • See La. R. S. 14: 71. 3.
Residential Mortgage Fraud-defined • La. R. S. 14: 71. 3. Mortgage fraud • A. It is unlawful for a person, in connection with residential mortgage lending activity, to knowingly do any of the following: • (1) Employ a device, scheme, or artifice with intent to defraud. • (2) Make an untrue statement of material fact with intent to defraud. • (3) Receive any portion of the purchase, sale, or loan proceeds, or any other consideration paid or generated in connection with the closing of a residential mortgage loan when the recipient knows that the proceeds or other funds were paid as a result of a violation of this Section.
Residential Mortgage Fraud. Residential mortgage lending activity defined • "Residential mortgage lending activity" means an activity, including electronic activity, engaged in for compensation or with the expectation of compensation in connection with a residential mortgage loan, including but not limited to the solicitation, application, origination, or funding of a residential mortgage loan; the negotiation and placement, or offering to negotiate, place or find a residential mortgage loan for another person; third-party provider services, including but not limited to appraisals, abstracts, escrow services, or title insurance; underwriting, signing, closing and funding the loan. • La. R. S. 14: 71. 3(C)(1).
Small Successions • Act 81, Effective 6/18/2009. • LBA sponsored. • Repeals requirement that tax collector certify that state inheritance taxes paid. • Raises threshold to $75, 000. • Creates term “small succession immovable property” • More details in later presentation.
Residential Mortgage Lender Licensing • Act 522, effective 7/31/2009. • Revises RMLA-renamed the SAFE Act. • Puts La. law in compliance with federal SAFE Act. regulation, licensing, and registration of all mortgage lenders. • CU’s now subject to RMLA. • Banks and employees exempt from licensing requirements of state act. (registration required). • See La. R. S. 6: 1081 -1099 and R. S. 9: 3511(F), 3557, and 3560.
LENDING & COLLATERAL
Homestead Exemption from Seizure • ACT 201; Effective 6/30/2009. • Raises homestead exemption from $25, 000 to $35, 000. (La. R. S. 20: 1). • Limitation of Seizure statute created: Judgment creditors of credit card debt prohibited from initiating foreclosure proceedings against debtor’s home. • (La. R. S. 13: 3851. 1).
Limitation of Seizure of Homestead • Limitation applies to a judgment for consumer credit card charges, which is a judgment for the payment of money consisting solely of amounts due from a consumer for unsecured consumer loans incurred through the use of a lender credit card or seller credit card, as those terms are defined in R. S. 9: 3516, and related interest, fees, charges, attorney fees, and court costs. La. R. S. 13: 3851. 1(A). • Judgment creditor may record judgment with recorder of mortgages and may establish ranking as a judicial mortgage against the debtor’s property. • Judgment creditor likely to be paid when house is refinanced or sold.
Limitation of Seizure of Homestead: Exclusions • Section 3851. 1 does not apply to a creditor who holds a conventional mortgage upon the debtor’s homestead. • Section 3851. 1 shall not apply if the debtor has executed a valid waiver of the homestead exemption which waiver shall be in authentic form.
Homestead Exemption from Seizure: Debtor Protection • Debtor may bring an action to annul a sheriff's sale conducted in violation of Section 3851. 1– but only if the judgment creditor is the purchaser at the sale and is still in possession of the property. • Action to annul a sheriff's sale prescribes one year from the date of the sheriff's sale deed. • Action for damages arising from a violation of this Section prescribes one year from the date of service of notice of seizure of the homestead upon the judgment debtor.
Redemption Certificates • ACT 484; Effective 8/15/2009 • Allows political subdivisions to collect the actual costs incurred for preparation and filing of redemption certificates, not to exceed two hundred dollars. • See La. R. S. 47: 2244.
Tenant Farmer Lien on Land • HB 454 proposed to create a lien against land leased by farmer. Lien would be for the value of the crops and improvements to the land. • SR 114 was passed requesting a study of the security rights of a lessee farmer regarding crops grown on leased land. – Problems with oral leases and unrecorded leases. – Possible solution through notice of lease law.
Citizens Insurance Program • Act 483, effective 8/15/09. • Allows Citizens property insurance program to charge premiums that must exceed by 10% the higher of either the actuarially justified rate OR the highest rates charged among the assessable insurers that have a minimum of 2% of the total, direct written premium in each respective parish for that line of business in the preceding year. • Citizens is authorized to establish different rating territories on which rates can be based, must be approved by Legislature. Territories would be based on risk and exposure. Could have different rates in same parish.
Insurance Premium Tax Credit Program • Act 478, effective 7/1/2010 • Revises the motion picture investor’s credit program. Legislation also amends the Ins Premium Tax Credit Program. • Requires that an insurance company seeking insurance premium tax credit must file an annual report showing the amount of qualifying investments held at the end of each fiscal quarter. (CD’s and deposits). (La. R. S. 22: 832). • Amount of tax credit shall be an average of the percentage of qualifying La. Investments held at the end of each fiscal quarter for the year. • Concern was about how an insurance company could prove that it held Qualifying La. Investments.
Named Storm Deductibles • Act 134, effective June 25, 2009. • Prohibits insurance companies from assessing homeowners with more than one named storm deductible per hurricane season, regardless of whether homeowner makes multiple claims during the hurricane season. • See La. R. S. 22: 1337.
Construction Code Updates • ACT 501; Effective 8/15/2009 • HB 276 by Rep. Fannin provides that the state uniform construction code be updated by the Code Council prior to the second regular legislative session after the release of the latest edition of the Code. • Prior law required the Code be updated within two years of release of the revised version. – Code Council is required to present the updated Code to the House and Senate Commerce Committees for oversight approval. (La. R. S. 40: 1730. 26(2)).
Code Enforcement Officer Registration • Act 325; Effective 8/15/2009. • Provides provisional registration of building code enforcement officers who have not obtained certification by a recognized code organization. – Provisional certificates of registration are valid for the time period specified by the Code Council. – Applies to officers on the job prior to January 1, 2007, and only for the position and locality held at time of registration. Provides for permanent registration of officers who were employed for at least 10 years prior to January 1, 2007. See La. R. S. 40: 1730. 35(C).
OTHER BILLS OF INTEREST
One Year Suspension of Vessel Titling Act • HCR 25 by Rep. St. Germain & Sen. Dupre suspends for one year the provisions of the Vessel Titling Act in order to give the Department of Wildlife and Fisheries and entities working with the department additional time to properly develop and implement an advanced titling system for recreational vessels. The new law is suspended until 60 days after adjournment of the 2009 Legislative Regular Session.
Real Estate Appraiser Management Companies • Act 502; Effective 1/1/2010. • Establishes requirements for licensure and regulation of appraisal management companies by the La. Real Estate Appraisers Board for residential real estate appraisers. • Appraisal management company means a company that administers a network of independent contract appraisers to perform real estate appraisal services for lenders or other clients, or receive requests for residential appraisal services for clients and enter into agreements with independent appraisers to perform appraisal services contained in the request. • See La. R. S. 37: 3415. 1 -3415. 21.
Documents of Title-UCC Article 7 • Act 207; Effective 1/1/2010. • La. Law Institute Legislation. • Revises UCC Article 7, modernizing the law pertaining to the commercial storage and shipment of goods. • Highlights of the changes include: – New rules for electronic documents of title. – References to certain tariffs and regulations that no longer exist have been removed for the Article. – New definitions and references to new terms: carrier (7102(2)); good faith (1 -201(20)); record (1 -201(31)); sign (7 -101(11)); shipper (1 -101(12)).
Documents of Title-UCC Article 7 continued • Additional Article 7 changes include: – Allowing a warehouse to have a lien on goods covered by a storage agreement and clarifying the priority rules regarding the claim of a warehouse lien as against other interests (7 -209). – Clarifying the extent of a carrier’s lien (7 -308).
Outboard Motor Titling • Act 508; Effective 1/1/2011. • Amends the Vessel Titling Act to add “outboard motors” to be titled by the La. Dept. of Wildlife and Fisheries. – “Outboard motor” means a mechanical combustion engine manufactured to produce 25 or more horsepower and designed to attach outboard of the transom of a vessel (See La. R. S. 34: 852. 2 (9)). UCC-9 was amended to provide for the perfection of a security interest in an outboard motor not held as inventory for sale or lease by filing a financing statement with the DWF (La. R. S. 10: 9 -501(a)(3)).
Outboard Motor Titling. Security Interest • A financing statement for an outboard motor must contain: – Serial number; – Year manufactured; – Name of manufacturer or model. – (La. R. S. 10: 9 -515). Vessel titling procedure went into effect August 2009.
BAD BILLS THAT DID NOT PASS
Bad Bills… • Attempts to raise homestead exemption from seizure – HB 678 by Representative Gary Smith would have exempted the entire value of a debtor’s homestead from seizure by creditors. If passed, this bill could have dramatically limited a creditor’s ability to collect on validly incurred debts, thereby increasing lender risk and consumer cost of obtaining credit. – As discussed earlier in this summary, HB 261 by Rep. Connick passed the legislature and provided a reasonable increase (from $25, 000 to $35, 000) to the exemption from seizure. HB 261 originally sought to raise the exemption to $100, 000.
More Bad Bills… • Private Works Act – Extending the Lien Period. – HB 57 by Representative Frank Howard would have amended the Private Works Act to extend the time period that building suppliers may file a lien for materials used in constructing immovable property. Under the bill, the current 70 day period for filing claims would have been extended to 90 days. The extension of this period would have increased a lender’s risk of a lien being filed that would outrank a lender’s mortgage. We were strongly opposed to the bill.
More Bad Bills… Suspension of Foreclosure Proceedings. - HB 378 by Representative Charmaine Marchand Stiaes provided a process for suspending foreclosure proceedings against homeowners, for a period of up to two years, in situations where the homeowner’s residence was damaged or affected by a natural or manmade disaster that rises to the level of a presidentially declared emergency. Certain factors had to be met for the homeowner to qualify for this relief and a procedure for creditors to dissolve the suspension injunction was provided for. - The bill would have given state district court judges the discretion to suspend foreclosures on mortgages as well as reduce the monthly mortgage payments to be made during the suspension period. - The LBA was strongly opposed to allowing mortgage contracts to be abrogated at the discretion of judges and successfully testified against this measure in committee.
More Bad Bills… Credit Card Marketing on College Campuses – HB 461 by Representative Elton Aubert would have prohibited the dissemination of solicitations, advertisements, applications, or other information concerning consumer credit cards to undergraduate students on college campuses. – Bill language was broad and it was unclear as to how it would have applied to the operations of banks with branches located on campuses or who made direct mail solicitations to residences located on college campuses. – We believe the absolute prohibition of credit card marketing on college campuses went too far and was unnecessary with the strict new credit card marketing provisions applicable to those under 21 years of age included in the recent credit card reform bill passed by Congress.
LOOKING AHEAD TO 2010
Looking Ahead to 2010 • The 2010 State Legislative Session will be a regular session, which means that the number of bills that legislators may file is not limited. Thus, we could still see lots of banking related legislation. Types of bills we expect to see: • – – – restrictions on foreclosure, restrictions on mortgage lending, consumer protections to lending laws, limitations on credit card interchange fees, expansions of the exemptions from seizure laws- both the homestead and personal property and wage The regular Session begins noon on Monday, March 29, 2010 and ends at 6: 00 pm, Monday, June 21, 2010.
Looking Ahead to 2010 • Electronic Titling and Liens for Motor Vehicles - ACT 689; Effective 8/15/2008, (See La. R. S. 32: 707. 2). • SB 373 by Sen. Duplessis provided that the DPS shall develop and implement a computer system that will permit the electronic recording of vehicle title information , including the perfection and release of vehicle security interests without submitting or receiving paper title documents. • The computer system shall be functional statewide no later than January 1, 2010. Lenders shall designate public tag agents, and interface lenders’ computer systems for the purpose of receiving electronic confirmation from the department of the receipt and filing of notices of security interests (financing statements) on motor vehicles. • We have recently learned that the DPS has interpreted the legislation as permissive and not mandatory and they are not intending to have an electronic system available for 1/1/2010. There has been some discussion about a possible Attorney General opinion that may interpret the law differently. We will continue to monitor the situation.
Looking Ahead to 2010 • Study of Mortgage Cancellation Procedures 2008 HCR 57 by Rep. Foil urges and requests the Louisiana State Law Institute to study and make recommendations on the revision, reorganization, and consolidation of the laws on registry with particular emphasis on the laws relative to the cancellation of mortgage and privilege inscriptions. • The expectation is that changes can be proposed to increase the uniformity of procedures used in all 64 parishes and to relocate all of the statutory provisions under one title so that the provisions may be easily followed. • The Law Institute Committee has held meetings and it is currently uncertain whethere will be legislation ready for 2010.
Looking Ahead to 2010 • Ag. Lending Collateral-Study 2008 SCR 122 by Senator Mc. Pherson requests the Louisiana Law Institute to study security interest priorities and contract right issues faced by farmers, lenders and grain elevators. • The Security Devices Committee has held several meetings and will likely make a report to the Counsel on the issue in the spring.
Looking Ahead to 2010 Anti-Fraud Initiative: – Payment card fraud and check fraud continue to be a growing problem for banks, and the LBA is looking at legislative ideas and working with an ABA organized national task force to change Visa rules.
Looking Ahead to 2010 • The Louisiana State Law Institute Security Devices Committee, led by Reporter David Cromwell, is working on a project to revise the Louisiana law of privileges. • The LBA is closely monitoring and coordinating grass roots efforts relative to federal legislation and regulations that could negatively impact banks in Louisiana.
David J. Boneno • David Boneno, general counsel for the Louisiana Bankers Association since 1998, is primarily responsible for offering advice and counsel to LBA members on banking legal and regulatory issues, drafting and analyzing legislation, representing the interests of the banking industry by filing amicus curiae briefs in selected litigation and representing the industry as a lobbyist. Contact Information: Louisiana Bankers Association 5555 Bankers Avenue Baton Rouge, LA 70808 Tel: 225/214 -4836 Fax: 225/343 -3159 [email protected] org