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Association urges lawmakers to stop bad practice

MBA eyeing state budget issues as session continues

Bank-specific issues are not top priority on the Mississippi Bankers Association’s (MBA) 2005 legislative agenda.

“We have 130 bills on our watch list, including some duplicates and four or five bank-related items that we’re interested in getting passed, but our priority is the same as many folks: studying budget issues as they obviously relate to the state’s economy and overall financial condition,” said MBA executive director Mac Deaver.

The MBA, along with several other statewide associations, sent a letter last month to Gov. Haley Barbour, Lt. Gov. Amy Tuck and House Speaker Billy McCoy pledging support to help solve the state’s budget problems.

“For the last couple of years, state lawmakers have transferred more than $3 million in special fund money from the Mississippi Department of Banking and Consumer Finance to the general budget,” Deaver pointed out. “It’s a bad practice that should be halted. State charter banks pay assessments to the department, which by statute is earmarked for maintenance funds. We realize we’re not the only group, nor the largest, to have this happen to. The Mississippi Department of Transportation has seen this happen in big dollars.

“We addressed this issue in a separate letter to the governor, lieutenant governor and house speaker. Now we’re looking for a way to educate folks on how the process works so it doesn’t happen again because no taxpayer dollars support the banking department. Having a strong state banking department and a strong state banking industry is very important to Mississippi, and if the department, for example, isn’t allowed to run on an efficient basis and be solvent financially, then banks could choose not to have a state charter, but rather a national charter.”

State Rep. Danny Guice (R-Ocean Springs), chairman of the House Banking and Financial Services Committee, has introduced the MBA-endorsed House Bill 694, which would, on a broad basis, prohibit the Legislature from transferring money from a special fund to the general fund.

“Danny has also introduced House Concurrent Resolution 24, which proposes a constitutional amendment to prohibit the transfer of money from certain special funds to the general fund,” said Deaver. “It’s a big step and extremely important to a lot of people.”

Many Mississippi bankers and businessmen are concerned that some state lawmakers are looking for ways to pass along tax increases to balance the budget, perhaps in legislation that isn’t obvious, Deaver said.

“We’re not saying, ‘Read our lips, no new taxes,’ but we are saying there are other ideas worth looking into,” he said. “Other states have taken measures that seem to us to make sense.”

Other MBA-endorsed proposed legislation includes:

• Changing criminal penalties concerning the sale of collateral. “There’s a quirk in the law that states the penalty for the sale of collateral in-state costs less and isn’t subject to the same prosecution as out-of-state,” said Deaver, who doesn’t anticipate opposition to the changes.

• Making slight revisions to the garnishment law. “It’s not all that exciting to talk about, and I don’t know if it’ll go any place, but we’d like to see revisions on how banks and employers process garnishments,” said Deaver. “We believe that garnishment is a legitimate collection tool and should be valid, but many times, people at the home bank don’t know about the garnishment and all kinds of disputes arise. We’re trying to clean up some of that language.”

• Increasing the jurisdiction of the justice courts from $2,500 to $5,000.

• Supporting a law that would require an insurance company to notify a lienholder if insurance lapses on collateral. “That’s a practice carried out by most folks, but not in all cases,” said Deaver. “We think it should be required.”

• Making “whistleblowers” immune from liability when reporting possible financial abuse against vulnerable adults. “None of these are big-picture items, but are the kinds of things that are quite important,” said Deaver.

“Sometimes you look at bills and wait to see if they’ll really have legs,” said Deaver. “Most times they don’t. But we’re watching bills like House Bill 112, concerning tort reform and requiring the pursuit of mediation in all civil cases. Maybe it’s a good idea, but the tort reform battle was fought last year. The title of House Bill 126 sounds like milk and cookies, but it restricts the right to waive a trial by jury. It would cause a lot of havoc with arbitration agreements and dispute resolutions. What we have is not an end-all, but a good tool.

“Also high on our radar screen: several proposals to amend exempt property statutes. We’re concerned about some exemptions because for years, there’s been an effort to make them as liberal as possible. We haven’t opposed any changes — and there have been quite a few — but we’re concerned that it would be a tool for folks in bankruptcy to use in certain situations.”

Contact MBJ contributing writer Lynne W. Jeter at lwjeter@yahoo.com.


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