For more information a banking topic or to schedule an interview with someone on staff, contact Jayme Foster at foster@lba.org or 225/387-3282.
LBA Applauds Legislature on Consumer Protection Legislation
06/26/2009
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BATON ROUGE—The Louisiana state legislature has concluded the Regular Session and several bills passed that positively affect Louisiana banking customers. Residential mortgage fraud is now a specific crime for all mortgage lenders. FDIC insurance is now more widely available. And, a home and its equity is more fully protected.
“The legislature has responsibly addressed a number of areas that help protect Louisiana citizens and the Louisiana Bankers Association was at the forefront supporting these measures,” said LBA Chief Executive Officer Robert Taylor.
Senate Bill 105 by Senator Ann Duplessis of New Orleans creates the specific crime of residential mortgage fraud. While current law provides for the crime of bank fraud, it only covers federally insured depository institutions and does not extend to non-bank lenders. Senate Bill 105 creates a separate law on residential mortgage fraud and it applies to all residential mortgage lenders, not just FDIC insured institutions. It also covers other service providers involved in the residential mortgage loan process. “While Louisiana did not experience the residential mortgage fraud seen in other states, this new law will send the message that doing so here will be a criminal offense,” said Taylor.
House Bill 145 by Representative Jeff Arnold of New Orleans expands the Payable on Death account currently offered by Louisiana banks and thrifts to allow greater access of FDIC deposit insurance for depositors. Current law limited Payable on Death accounts by requiring that a named beneficiary be a qualified family member. This meant that if a depositor did not have any qualified family member they could not set up a POD account and get the benefit of the FDIC insurance coverage. The FDIC changed the requirements for POD accounts last fall to remove the requirement that a beneficiary be a family member. House Bill 145 was introduced in response to changes by the Federal Deposit Insurance Corporation. The practical effect is that Louisiana depositors are now able to use the POD account and have those deposits insured without having to name a family member as beneficiary. “In these times of heightened concern by many for the safety of their money, this legislation will provide greater protection of funds in POD accounts,” said Taylor. “Your Louisiana bank and thrift can help set up this extended coverage.”
House Bill 261 by Representative Patrick Connick of Marrero makes two important changes; it assures that no person will have their home seized and sold by a creditor or debt collector due to debt owed on a credit card. Second, it increases the dollar value of a home that is exempt from seizure by general creditors to satisfy unsecured debt from the current $25,000 to $35,000. “The Legislature must strike a balance between a lender’s right to collect on money lent and the borrower’s ability to repay when the borrowers circumstances have suffered an extreme change. If the law circumscribes a lenders rights too much, lenders will simply lend less, which will have negative economic implications. House Bill 261 strikes a balance that will help borrowers recover more quickly from their difficulties,” said Taylor.
Louisiana Bankers Association is the professional trade organization for commercial banks and thrifts in Louisiana. Founded in 1900, the LBA works to provide advocacy, communication, education and other services to its member institutions, and to provide banking information to the general public. For more information, go to www.lba.org.
