From the Archives: December 2012

90-day Foreclosure, ARC Recommendation, Blight Bill Dies, Financial Elder Abuse 

90-Day Foreclosure Legislation Ordered Enrolled
Sponsored by Senate Banking Chairman Darwin Booher, R-Evart, SB 1172 would have originally extended the state 90-day pre-foreclosure workout law for two additional years beyond its December 31, 2012, sunset however an amendment in the Senate Banking Committee reduced it to six months. MCUL and Community Bankers Association strongly opposed the two-year extension, so Vice-Chair Mike Nofs, R-Battle Creek, offered an MCUL-supported amendment to reduce the extension to six months, expiring on June 30, 2013. The shorter extension will still provide time to review the final rules on mortgage servicing issued by the CFPB, which are due by January 2013. The initial CFPB offering on servicing, as proposed for public comment, includes several requirements similar in scope and intent to the Michigan 90-day law. Assuming the governor signs the now-enrolled bill, the Senate Banking and Financial Institutions Committee will prioritize this review early in the 2013 session, to assess whether the state law is still needed in light of the pending federal requirements. Click here to view the 90-Day Foreclosure Workout Period Issue Brief.
Administrative Rules Committee Recommendations Ordered Enrolled
A package of bills that included recommendations by the Insurance and Finance Administrative Rules Committee were recently ordered enrolled. SB 1283-1285 would amend the definition of "mortgage loan" in several statutes including the mortgage brokers, lenders, and servicers licensing act introduced by Sen. Mike Green, R-Mayville, the consumer mortgage protection act, introduced by Sen. Mike Nofs, R-Battle Creek, and legislation introduced by Sen. Jim Marleau, R-Lake Orion, that would amend the act that prohibits “redlining” and other practices in mortgage lending. Other ARC bills ordered enrolled were HB 5835-5838 and HB 5863, bills that would repeal Savings and Loan Act citations in several statutes. This includes the electronic funds transfer terminal statute, the handling and processing of food stamps act, citations in the exemption of association shares from levy and sale and the motor vehicle sales finance statute. The committee released its report containing 46 recommendations for improving Michigan's insurance and finance regulations, including rescinding several rules regarding credit unions. For more information, click here to access the ARC Recommendations Issue Brief.

MCUL-Opposed Blight Legislation Dies in Lame Duck
Legislation that would increase fines and sanctions for “blight violations” (SB 1096-1100) was removed from the Michigan’s Legislature’s legislative agenda for 2012, and died with the end of session on December 18. The package was introduced to address the issue of urban blight and increase fines and sanctions for contributing to and perpetuating the problem. Within this package, SB 1096 and 1100, sponsored by Sen. Virgil Smith, D-Detroit, and Sen. Tupac Hunter, D-Detroit, respectively, were of most concern. SB 1096 would have amended the Home Rule City Act to establish additional civil and criminal penalties that could be imposed on a party who committed a blight violation and failed to pay associated costs. The legislation would also have lowered the minimum population requirements to set up a blight administration system, from 2 million to 1.5 million for a county containing a city with a population of 3,300 or more. SB 1100 would allow the city’s administrative hearings bureau to foreclose a lien against property involved in a blight violation. In their current form, MCUL opposed the legislation, and a tentative agreement to carve financial institutions out of the bills’ coverage was reached.  However, the bills never made it out of the House committee. MCUL will prioritize working with the sponsors to keep credit unions out of the bills’ purview should they be reintroduced next year, and will also work with the sponsors and stakeholders on other potential approaches to the blight issue. Click here to access the Blight Violations Issue Brief.
Financial Elder Abuse Bills Removed from 2012 Legislative Agenda
SB 460 and 463, legislation that would have required mandatory financial elder abuse training and required credit unions to include state-approved language in multiple-party account disclosures was not taken up for consideration during the remaining days of the Michigan Legislature’s session schedule for this year. Last term, SB 463 would have obligated Michigan financial institutions to report suspected financial elder exploitation, with civil and criminal penalties for failure to do so. MCUL initiated and supported several amendments to move the bill away from mandatory reporting to mandatory training. We were also successful at moving away from disclosure language that would have required credit unions to ensure that their members read and understood the policy. MCUL continues to be wary of additional layers of regulation, and credit unions already train their staff on combating fraud and using suspicious activity reports (SARS) to report it, but the current bills are a vast improvement over previous versions and would at least afford a high degree of control to individual institutions over the content and process of shaping the training programs. MCUL will watch for reintroduced versions of these bills next year. For more information, click here to access the Elder Abuse Issue Brief.

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