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Legislation | Lobbyist Update | Grass Roots | PAC

2007 Arizona Legislative Lobbying Report

Legislative Update
BY KEVIN DEMENNA & REBECCA HECKSEL
March 19, 2007

Pipe bursts, floods, bomb threats, snipers, citizen police. It sounds like the beginning of a classic 1980’s action adventure movie but it’s actually a fascinating start to the 2007 session of the Arizona Legislature. There hasn’t been a dull day at the State Capitol as legislators consider such vital problems as citizen border patrol, classifying honey bees and deciding whether or not you should be allowed to text message on your cell phone while you drive (I wasn’t texting Officer, honestly, I was just dialing!). Legislators have already introduced an impressive 1,522 bills this year! Fortunately for law abiding citizens, only about a third of these bills will make it all the way through the legislative process, to the Governor’s office, and become law.

Not to be overshadowed, there are some important bills that your AMLA Officers and the lobbying team at DeMenna & Associates have been working on this year that will have an impact on the mortgage lending industry.

SB1221: Residential Mortgage Fraud
Senator Jay Tibshraeny (R) of Chandler is sponsoring a bill to make it a class 4 felony to commit mortgage fraud. Mortgage fraud is defined in the bill as making misstatements or representations during the lending process, using or facilitating the use of misstatements, filing a loan document you know to contain misstatements, or receiving any money in connection with mortgage fraud. Felicia Rotellini, the Superintendent of the Department of Financial Institutions (DFI) testified in front of the Senate Commerce committee that this new law would give her greater authority to pursue these types of crimes.

Surprisingly, this bill has been met with some resistance from legislators. The main concern is that it is already a felony to commit mortgage fraud and that this law may be unnecessary. Rotellini responds that this new language neatly combines the existing fraud provisions and makes it much simpler for DFI to prosecute. The bill has passed through the Senate and has been sent over to the House. On the House side, the bill has passed through the Commerce committee and is now awaiting assignment to the Judiciary committee.

HB2320: Licensure of Loan Originators
Representative Nancy McLain (R) of Bullhead City is sponsoring this bill which requires the DFI to develop a program to test and license loan originators. This bill requires loan originators to be licensed beginning January 1, 2009. The bill also mandates continuing education. Exempt from this law are employees of mortgage bankers and persons who are already licensed as a mortgage broker or banker. This impetus behind the bill is the Arizona Association of Mortgage Brokers, who worked with your AMLA Officers and DeMenna & Associates to ensure the bill is acceptable to AMLA members. The bill has had general support from legislators but still has a long way to travel. It has passed through the House and has been transmitted to the Senate. At the Senate is awaits assignment to the Finance committee. AMLA, the Brokers and DFI have continued to work together to amend the bill and make it more acceptable to all parties.

HB2388: Mortgage Licensees
This bill gives DFI the authority to implement a multi-state, automated licensing system for mortgage bankers and brokers who are currently licensed in Arizona. The bill is sponsored by Representative Bill Konopnicki (R) of Safford and is very important to Rotellini. AMLA is also in support. The bill has passed through its House committees and now must be passed by the Committee of the Whole before it can be sent over to the Senate.

Predatory Lending
Each year, AMLA faces overly aggressive predatory lending bills. So far this year, Senator Debbie McCune Davis (D) has been the only legislator to introduce such legislation; however, she withdrew her bill before it was heard in any committees. We are keeping our radar up for any new progress.

The 100th day of legislative session is quickly approaching (April 17th). The legislature has numerous bills remaining to consider as well as the state’s operating budget to craft. This year, the playing field between the Democrats and the Republicans is more level than it has been since the Democrats controlled the Senate in 1992. The Republicans have a 17/13 majority in the Senate and a 33/27 majority in the House. This smaller majority gives Democrats greater strength to advance their agendas. It also makes moderate Republicans more relevant as they become negotiators and tie-breakers. Stay tuned!

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