Nevada's 78th Legisltive Session Wraps
Nevada Bankers Association expresses sincere appreciation for the work and leadership of the Nevada State Legislature. This year’s decisions will ensure that Nevada remains competitive by strategically investing in education and enhanced economic development structure.
The close of the 78th Nevada Legislative session, Sine Die, came Monday evening June 1, 2015 at midnight. Throughout the 120-day calendar, legislators heard hundreds of bills, amendments and countless hours of testimony.
NBA came out early in support of the Governors education initiatives. Our membership also recognized the need to fund the initiatives and testified consistently that bankers stand ready to pay their fair share of whatever tax our legislators and Governor determined would move forward.
Key issues for the NBA and members ability to provide banking services Nevada customers were:
Financial Literacy SB 220: Senator Woodhouse sponsored this bill, initially proposed by two youth legislators Evan Gong and Kyle Walker. The bill proposed expanding financial literacy education from 12th grade only to a 6th grade through 12th grade requirement. NBA testified in support and gathered additional support and testimony from the community. Toyota Financial Services paid travel expenses to have Walker and Gong present in Carson City for the first hearing.
This bill did not pass, however NBA remains committed to becoming a strong community partner and financial resource for a variety of populations beginning with Nevada school district, and expanding to include college students, new homebuyers, nearing retirement and prevention of elderly financial abuse. A website directory and resource guide is under construction. Teacher outreach will commence late fall to encourage and increase awareness and usage of the NBA as a resource.
Probate and Estate AB 130: NBA proposed modernizing the state’s estate caps. NBA thanks bill sponsor Erv Nelson and Governor Sandoval for signing this bill into law. This will give some grieving families relief in dealing with smaller estate.
Public Deposits SB 448: NBA was supportive of the passage of this bill. Sponsored by the Senate Judiciary Committee, passage allows state and municipal deposits the availability of FDIC coverage above what is offered by a single institution. It also allows for potential of higher yields.
Commercial Lending AB 129, AB 195: Restoring commercial lending to normal business rules will yield confidence and help investor money foster economic growth. Passage of AB 195 allows for commercial loan obligations in certain cases to return to normal rules without affecting the anti-deficiency protection put in place for homeowners. Bill sponsor Erv Nelson worked with multiple parties to hear all sides and come to an agreed time frame for the fix to be effective.
AB 129 died, passage would have fixed an annuity concern for lenders. Without passage, banks will continue protective practices that can limit amounts available to borrowers. The NBA recognizes there continues to be a need for a fix in order to protect the unknowing non-traditional lenders such as friend or family loans. A fix will also help to Nevada’s lending reputation, which is good for economic growth.
Numerous legislative efforts were aimed at healing and supporting Nevada’s real estate market.
Mediation AB 282, SB 321/AB 275/SB 512: AB 282 would have modernized and completely restructured the mediation process. The bill died as the Foreclosure Mediation Program was given a 2-year wind down phase under SB 512. There remains the possibility that the next legislature will extend mediation, or follow through with the wind down. NBA testified in support of SB 321 which will allow for distressed homeowners to seek mediation prior to default. The bill contents of SB 321 later replaced the language of AB 275 and finally was amended to SB 512, which passed. NBA members and particularly and mortgage lenders recognize that the majority of homeowners do not want to miss payments and that they care about maintaining their good credit standing. This bill will allow borrowers to seek help earlier and be proactive in securing their property.
HOA Liens & Foreclosure SB 306, AB 240, AB 288, AB 349, SB 260: Extensive legislative effort was spent reviewing the HOA priority lien situation in Nevada. NBA supported efforts to protect homebuyers, to ensure that HOA fees are paid and to follow proper procedures should issues arise. These protections will help ensure healthy residential loan growth and contribute positively to Nevada’s overall economy.
The final result was passage of SB 306, which was a collaborative effort of all parties involved from HOAs to collection companies, investors, real estate, title and lenders. Governor Sandoval signed the bill, sponsored by Senator Hammond and cosponsored by Senator Ford, into law on May 27. The new law outlines a specific notification process and gives lenders the opportunity to preserve their first lien by laying our nine months of HOA dues and certain fees. The bill also includes a right of redemption. The final bill was built on a draft concept laid out by Alan Rabkin Legal Counsel for Heritage Bank of Nevada and the work conversations leading to the final language garnered the attention and testimony of FHFA Legal Counsel Alfred Pollard.
As the session progressed, strong support for the elimination of extinguishment was growing. Assemblyman Anderson stated, “It is not fair that the bank who loaned the money should be put in second place on the largest piece of the pie.” AB 359 passed the Assembly (Yeas: 29, Nays: 11, Excused: 2) minutes too late on Monday evening to get a hearing in the Senate.
An NBA opposed bill to mandate impound of HOA fees, SB 260 introduced by Senator Becky Harris was defeated. This measure, considered virtually impossible to implement, held potential to eliminate HOA residents’ choice to pay direct, raise the costs due at closing for new homebuyers, add additional costs to the monthly fees for homeowners. There are more than 3,000 HOAs in southern Nevada alone, each with different rates and schedules, and no registry or way of referencing properties subject to which HOAs. NBA also questioned the concept of requiring one entity to collect unrelated entities receivables. SB 260 passed the senate twice, once as a Separate bill. Once amended into AB 240. It was defeated both times in the Assembly.
AB 386 passed this session, establishing supplemental procedures for the retaking of a dwelling subject to unlawful entry or housebreaking. NBA supported this bill, as it represents an effort to increase the ability to remove unauthorized dwellers or ‘squatters”
Division of Mortgage Lending and MRE AB 480: The original language of this bill provided for changes to the licensure and regulation of mortgage loan servicers. The bill was amended late to allow for the creation of thrift companies that can take deposits from medical marijuana establishments.
Nevada Bankers Association appreciates the efforts of the Nevada State Legislature to create an entity type that would be able to provide the needed banking services. The state-charter and private insurance combination is a creative approach however we believe such an entity would not be approved for access to the Federal Reserve System for processing payments. NBA also believes such an entity would also still face several federal statutory barriers, including the Controlled Substance Act, USA Patriot Act, Bank Secrecy Act, Racketeer Influenced and Corrupt Organizations Act and other federal statues. **Read the full NBA position on MRE here.
Governor’s Revenue Plan AB 464, SB 103, SB 346,
Nevada Bankers position on tax plans included support for the Governor's education intuitive, recognition of the need for funding it, and acknowledgement that the Legislators and the Governor would determine which tax packages move forward. Nevada bankers stood ready to pay their fair share of taxes and stand behind any plan that treats banks equitably and alike to other businesses.
Through multiple and thoughtful conversations and compromises the process ultimately yielded a comprehensive package that will broaden Nevada’s business tax structure. The final plan is a three-pronged approach:
(1) The package increases Nevada’s current Business License Fee from $200 to $500 for corporations (fee for non-corporations is $200) and increases the filing fee by $25 per year;
(2) The package increases the existing Modified Business Tax to 1.475% for businesses generally (2% for mining and financial institutions) while retaining an employer-paid health care deduction; 50% credit for paid Commerce Tax; and
(3) The package creates a Nevada Commerce Tax, which is an industry-specific, annual levy imposed on businesses with Nevada revenue of $4 million or more; 50% of the tax may be used as a credit against the taxpayer’s Modified Business Tax liability. (Note: Information courtesy of Connor Cain, Legal Extern at Strategic Analysis Research & Decisions, LLC)
The Compromise Revenue Package also keeps intact a 0.35 percent sales tax increase that supports schools and increases the per pack cigarette tax by $1, from $.80 per pack to $1.80 per pack. There is no change to the ‘branch’ or ‘franchise tax’ paid by banks.
It is believed the approved package will pose a minimum threat to economic development in Nevada. NBA is supportive of the plan and banks are appreciative of the opportunity to engage in discussions throughout to process to further our understanding a have the opportunity to suggest clarifying language. NBA thanks the tax sub committee members, especially Jeff Moreno of Wells Fargo for their tireless analysis and supportive suggestions.
NBA does remain committed to our position of fair and equal treatment and the elimination of punitive taxes on any single category of business.
NBA also commends Governor Sandoval and his team including Jeremy Aguerro for their success in creating a package that broadens the base and draws increased revenues to support new, positive opportunities that will enhance the Nevada workforce and education system.
Sine Die was midnight on June 1, 2015. The success of the NBA government affairs efforts and this legislative session were led by the efforts and expertise of Strategic Analysis Research and Decisions team of Sam McMullen, George Ross, Sara Cholhagian, Connor Cain, Thomas Stewart and Chase Whittemore. NBA also recognizes the numerous hours of support provided by our GAC Chair Sean French and all our members. NBA gives thanks and appreciation to each member for participation in our Legislative Day, our weekly GAC calls, and on numerous sub-committees as needed.
Our Government Affairs Committee now shifts its focus to the 2016 elections. We are also seeking volunteers for a BankPAC sub committee. A well-funded PAC will help NBA protect members’ ability to serve financial needs of clients by helping members of the State Legislature understand the issues that the industry faces and the real impacts of certain legislative initiatives. During the 2016 elections, it will also help elect officials who support a strong Nevada economy and an environment where banks and financial institutions can foster strong economic growth. Through Bank PAC NBA will build relationships and educate legislators about our industry.
Nevada Bankers Association
Banking Medical Marijuana
MRE Position Statement
The State of Nevada has authorized usage of marijuana for medical purposes, and Nevada Bankers Association understands how it would seem easy to view this as a legitimate small business with growth potential just like any other small business. However, all banks, whether a national bank or a state-charter bank, are subject to federal laws. As it stands, possession or distribution of marijuana violates federal law, and banks that provide support for those activities face the risk of prosecution and assorted sanctions.
Nevada Bankers Association appreciates the efforts of the Nevada State Legislature to create an entity type that would be able to provide the needed banking services. The state-charter and private insurance combination is a creative approach but we believe such an entity would not be approved for access to the Federal Reserve System for processing payments. NBA also believes such an entity would also still face several federal statutory barriers, including the Controlled Substance Act, USA Patriot Act, Bank Secrecy Act, Racketeer Influenced and Corrupt Organizations Act and other federal statues.
NBA does appreciate the recent efforts by the Department of Justice and FinCEN to provide guidance, yet that guidance itself contains strong reminders that marijuana is still illegal under federal law. The Office of the Comptroller of the Currency, Federal Deposit Insurance Corp. and the Federal Reserve haven’t given banks assurances that they won’t be prosecuted under banking regulations that prohibit such deposits under federal law.
The Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC), and the Consumer Financial Protection Bureau (CFPB) all belong to the Federal Financial Institutions Examination Council, (FFIEC) for the stated purpose of providing uniformity in the supervision of financial institutions.
Ultimately the only way to eliminate risk or criminal prosecution for banks is if Congress changes federal statute.