CONFERENCE COMMITTEE ON SB 171A

 

 

May 18, 2001                                                                                                       Hearing Room 343

2:45 p.m.                                                                                                                           Tapes 3 - 4

 

MEMBERS PRESENT:         Sen. John Minnis, Chair

Rep. Max Williams

Rep. Kathy Lowe

Rep. Lane Shetterly

                                                Sen. Ginny Burdick

 

MEMBER EXCUSED:          Sen. Roger Beyer

 

STAFF PRESENT:                 Marilyn Odell, Counsel

Patsy  Wood, Administrative Support

 

 

 

These minutes are in compliance with Senate and House Rules.  Only text enclosed in quotation marks reports a speaker’s exact words.  For complete contents, please refer to the tapes.

 

TAPE/#

Speaker

Comments

TAPE 3,  A

003

Chair Minnis

Calls the meeting to order at 2:45 p.m. and opens a work session on SB 171A that revises Article 9 Uniform Commercial Code regulating secured transactions.

SB 171A WORK SESSION

008

Chair Minnis

Reminds the committee of the actions taken at the previous meeting on SB 171A and explains the –A18, and -A19 amendments that address the changes discussed, and the A21 conflict amendments. (EXHIBITS A, B and C).

050

James Krueger

Program Manager, Department of Consumer and Business Services

Discusses the sample transaction spreadsheet that demonstrates the impact at each renewal period (EXHIBIT D).

115

Chair Minnis

Asks at what level a company can be profitable.

118

Krueger

Says that profitability is not based solely on the fees charged. Talks about default rates, and says that the intent of the 3-rollover rule is to make the lender more responsible in their lending practices.

152

Chair Minnis

Asks if profit or business practices are more relevant.

158

Krueger

Replies that it is most relevant to provide consumers the opportunity to obtain credit, but in a fair way.

162

Rep. Williams

Asks for clarification of the payday loan versus the title loan process.

168

Krueger

Says these loans are now identified as “short-term personal loans”.

184

Rep. Williams

Asks if research was done about the rollover limitation and its affect on the title loan businesses.

187

Krueger

Replies that they have not, but that there was input from the industry saying that they needed more than three rollovers.

194

Chair Minnis

Asks if the assumption was made that if the industry paid more attention to the credit worthiness of their clients, losses would be lower.

 

197

Krueger

Replies, yes.

208

Sen. Shields

Asks if there are other states with a similar “good faith belief that the consumer has the ability to pay” statute.

214

Krueger

Says that research would have to be done on that subject.  Says that there are some states where title lending does not occur at all.

236

Rep. Lowe

Asks about the practices of how vehicles are disposed of by the title lending companies.

247

Krueger

Replies that administrative rule has always required the sale of vehicles in a commercial, responsible manner.

279

Mike Dewey

Consumer Lender Alliance

Discusses the differences between the “Payday Loan” industry and the “Title Loan” industry.

318

Mark Nelson

Northwest Title Loans

Discusses differences between the two industries and says that they need to be treated differently.  Distributes a spreadsheet showing the actual costs of a “Payday” loan company (EXHIBIT E).

392

Chair Minnis

Discusses the –A18 amendments and says that they include a 6-rollover provision.

440

Rep. Williams

Further discusses the –A18 amendments in section 202, on page 5.  Stresses the concern of the committee with regard to the industry in general.

TAPE 4, A

047

Rep. Lowe

Concurs that this is an industry that needs to be watched carefully and reviewed next session with regard to practice standards.

056

Sen. Burdick

Expresses concern about the number of rollovers in the –A18 amendments.

075

Sen. Shields

Comments on the spreadsheet submitted by Mr. Krueger, and wonders why a 5-rollover provision wouldn’t be enough.

101

Nelson

Says that 80 percent of the loans made are repaid within the 3-rollover limit, but the losses come from the other 20 percent.

135

Rep. Williams

MOTION:  Moves to ADOPT SB 171-A18 amendments dated 5/18/01.

 

 

VOTE:  5-0-1

EXCUSED:  1 – Beyer

140

Chair Minnis

Hearing no objection, declares the motion CARRIED.

 

142

Rep. Williams

MOTION:  Moves to ADOPT SB 171-A21 amendments dated 5/18/01.

 

 

VOTE:  5-0-1

EXCUSED:  1 – Beyer

147

Chair Minnis

Hearing no objection, declares the motion CARRIED.

 

154

Rep. Williams

MOTION:  Moves that the Senate concur in the House amendments to SB 171A dated 5/18/01 and that the bill be repassed as further amended.

 

 

VOTE:  5-0-1

EXCUSED:  1 – Beyer

184

Chair Minnis

Hearing no objection, declares the motion CARRIED.

REP. SHETTERLY AND SEN. MINNIS will lead discussion on the floor.

187

Chair Minnis

Closes the work session on SB 171A and adjourns the meeting at 3:30 p.m.

 

Submitted By,                                                                           Reviewed By,

 

 

 

Jane Bodenweiser                                                                     Marilyn Odell,

Committee Assistant                                                                 Counsel

 

EXHIBIT SUMMARY

 

A – SB 171A, -A18 amendments submitted by staff, dated 5/18/01, 3 pp

B – SB 171A, -A19 amendments submitted by staff, dated 5/18/01, 3 pp

C – SB 171A, -A21 amendments submitted by staff, dated 5/18/01. 2 pp

D – SB 171A, spreadsheet submitted by James Krueger, 1 p

E – SB 171A, finance spreadsheet submitted by Mark Nelson, 1 p