"Reserves Bill" Update
In the past week the Commerce Committee has voted to recommend that the full House not support HB 35, which would have required banks to hold cash reserve funds equal to 100% of their time and savings deposits. The Committee report will state that the bill would leave state-chartered banks in NH with two very poor options: either go out of business or convert to a national charter. The Committee, correctly, noted that neither choice would benefit consumers (and wouldn't make banks too happy, either). The Committee has also recommended that the House not pass HB 178, which would've required that all parties to a real estate transaction be given copies of all documents 3 days prior to the closing. Many people commented during the public hearing that it would be real nice if that could happen but, in the real world, many things keep changing right up until the closing and the bill would create many aggravated homebuyers and sellers.
Where There's Smoke...
The NHBA took note of SB 69 last week, and then took action. As written, the bill would've given municipalities a priority lien on a lender's share of insurance proceeds if a building it was holding a mortgage on burned and the owner chose not to rebuild or quickly tear down the damaged structure. Apparently the city of Berlin has a serious problem with burned and abandoned buildings and is looking for a source of funds to pay for demolition and disposal of the debris. The NHBA testified against the bill, but acknowledged that the city has an issue that should be looked into. The bill's sponsor, Senator John Gallus, submitted the legislation for Berlin Mayor Bob Danderson. They say that their intent was to place a lien on the borrower's portion of an insurance pay-out and not to disrupt a bank's secured position. An amendment to make that change is expected.
60 Day Discharges
The House Commerce Committee held a hearing this week on HB 262, which would allow mortgage borrowers to seek damages and attorney fees if their mortgage is not discharged within 60 days of paying off the loan. The bill's sponsor said that banks are very good at charging consumers for messing up, so the banks should get dinged, too, when they don't do their job. The NHBA's Diane Vickers calmly responded that, until 1990, it was the property owners responsibility to take care of the paper work, but they weren't doing it very well, (if at all), so the banks were asked to do consumers a favor and take that job over. She also noted that current law already requires discharges to be completed within 60 days and we are not aware of any significant problems hitting that mark. If you're responsible for handling mortgage discharges in NH, now would be a very good time to do an internal audit to make sure you're clearing within the 60 day window.
New Fed Funds Rate
The Federal Reserve's Open Market Committee increased its target interest rate by 25 basis points to 2.5% this week. It's the sixth time since June that the Fed's regular two-day meetings to ponder the state of the American economy has resulted in a quarter percent boost to the rate. Analysts expect the regular rate hikes to continue throughout 2005 and into 2006, and then idle in the 3.5% to 4% range.
NH Escrow Rate Holds
NH Bank Commissioner Peter Hildreth has announced that the minimum rate of interest to be paid on money held in mortgage escrow accounts for the payment of taxes and insurance premiums continues to be 0.00% (zero). The escrow rate is calculated in accordance with state law at 1% below the mean rate paid by state banks on regular savings accounts. The rate is adjusted twice a year on the first day of February and August.
New Hampshire Bankers Association 122 North Main Street P.O. Box 2586 Concord, New Hampshire 03302-2586 For more information on above items: call (603) 224-5373, fax (603) 224-3381 or E-Mail jlittle@nhbankers.com. |
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