Linus: I've changed a lot in the last year.
Lucy: I mean for the better." Charles Schulz (1922-2000)
Old timers in the lobbying business say that the legislature really never changes, although there are ebbs and flows with the changes in leadership and membership. Whether this observation is right or not, there is little doubt that until almost the last 10 days of the session the bills passed and sent to the Governor were few. Things picked up in the last 10 days and 361 bills were passed according to the New Mexico Bankers Association March 15 Report
As you know, under New Mexico's legislative process the Governor has 20 days from the adjournment to sign bills or they are dead--a pocket veto. This year the magic date is April 5. There are some unsettled issues whether the deadline ends at noon, close of business or midnight and the question has never been settled by any court ruling. The question is only important is a bill is signed late.
Some key legislation sought by the State's Financial Services Division did not pass, some say in retaliation for the Division's opposition to SB1, the Mortgage Fair Foreclosure Act. Those bills that were killed were the Escrow Company Revisions and HB 176 to increase capitalization for new state banks from $500,000 to $5 million.
SB1 introduced by Senator Michael Sanchez, and heavily supported by the Attorney General's Consumer Protection Assistant AG, failed in committee. Although the SB1's defeat was a product of extensive work by the banking associations and others, one person active in the fight credits Dion Kidd, President of Western Bank, Alamogordo, for turning the tide against the bill in committee. After a long committee meeting Ms. Kidd apparently gave the Senators a local community banker's view of what the legislation would do to those banks who do not sell their mortgages in the secondary market. Although SB1 was a disaster for all financial institutions in the mortgage business, Ms. Kidd apparently made the problems real for those sitting in the committee. HB88, the Mortgage Fairness Act, also did not pass.
A bill which should be of concern to all financial institutions is SB159 which passed and is now in the Governor's office waiting action (or inaction). Under SB159 a court is empowered to award attorneys fees to the prevailing party in any action where the action is on a note or contract that provides for a party to recover attorney fees. A simple example would be the usual promissory note signed by a debtor in favor of a bank that provides for the bank to receive attorney fees on collection. Under SB159 if a court decides that an event of default has not occurred, the judge can award attorney fees against the bank even though nothing in the promissory note allows this award. The measure cannot be waived by the debtor. SB159 obviously affects financial institutions and mortgage companies, but it also affects any business with a contract awarding attorney fees. Although SB159 may be subject to constitutional challenge for abridgment of contracts, one would hope the Governor would veto it or simply fail to sign it.
SB128 should be of concern to business generally, although financial institutions are exempt from its provisions. SB128 would bar employers' use of prospective employees' credit history in hiring decisions. Credit histories are just one tool employers have when evaluating prospective employees and they should not be barred from employer consideration.
Many lobbyists thought a major impediment to progress in the last session was a greater number of new members than usual. Whether, like Linus, they seek to improve we will have to see.
Do good.
Marshall G. Martin
Comeau, Maldegen, Templeman & Indall, LLP
505-982-4611 (office)
505-228-8506 (cell)
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