CCUA Testifies at Mass. Public Hearings

Public hearings at the Massachusetts State House continue this summer on pending legislation of interest to state and federally-chartered credit unions. Most recently, the Cooperative Credit Union Association submitted oral and written testimony last week before two Committees on legislation which modernizes and standardizes state robbery statutes, penalty systems, and jurisdictional issues, and on legislation relative to municipal foreclosures and mediation.

Enhanced Penalties for Robbery Legislation

House 1896 and Senate 1130, Acts Protecting Bank Employees and Customers, were heard before the Joint Committee on the Judiciary, chaired by Senator Jamie Eldridge (Marlborough) and Representative Michael Day (Stoneham). The thrust of the bills, which are identical in language, is to address the penalties and enforcement of common crimes against Massachusetts credit unions and financial institutions. More specifically, these measures amend and modernize the statutory definitions of armed robbery and bank robbery, and specifically include a direct criminal sanction for such crimes against financial institutions. The language creates a tiered penalty system for first and subsequent infractions against financial institutions. It also updates the definition of a larceny to include forged checks and orders for the payment of money from depository institutions. Finally, it updates the definition of fraudulent checks to allow for greater flexibility for action to be taken against the perpetrator either where the crime was committed or where the main office of the depository institution is located.

The Association was the sole party to testify orally before the Committee on the importance of the legislation. Testimony was strengthened by direct credit union responses to the Association’s survey of recent credit union experiences with robberies, as well as data on the recent trends of active shooter and “ATM smash and grab” situations. Experiences of robberies at credit unions reveal not only the loss and theft of money, but also violence or the threat of violence, which often result in employee trauma. As the instances of such tragic situations continue to trend upwards, credit unions are ensuring that they are trained to prevent and handle such situations. However, testimony reflected that credit unions are not optimistic that the current state statutory structure for robbery penalties will sufficiently address these recent trends. Therefore, the enhanced penalty provisions as contained within Senate 1130 and House 1896, as well as the need for modernized robbery and larceny definitions directly tied to attempts against financial institutions, including direct criminal sanctions for such crimes, are strongly supported by credit unions.

Municipal Foreclosure and Mediation Legislation

Two bills which address municipal authority relative to foreclosures and mediation were heard before the Joint Committee on Municipalities and Regional Government, chaired by Senator John Cronin (Fitchburg) and Representative Lori Ehrlich (Marblehead). House 2142, An Act Clarifying Municipal Authority Regarding Foreclosures, seeks to empower the Commonwealth’s 351 distinct and separate municipalities to have independent authority over foreclosures and vacant properties, with broad authority to enact their own individual laws to prevent and minimize foreclosures, with no required collaboration, agreement, or coordination with existing state and federal authorities or laws on housing matters, including foreclosures. House 2143, An Act Enabling Municipal Pre-Foreclosure Mediation, authorizes municipalities to establish their own individual foreclosure mediation programs to require mediation prior to all foreclosures of residential property. The bill includes a provision to fine a mortgagee or mortgage servicer a daily $300 fee for failure to comply.

The hearing, which lasted over four hours, also featured testimony from a number of other stakeholders on the legislation, including that of the bills’ primary sponsor, Representative Peter Capano (Lynn). Stakeholders in support of the legislation stated that a number of municipalities, including Springfield, Worcester, and Lynn, saw successful foreclosure programs as driven by municipal ordinances which were later repealed or abolished as they were determined to be unconstitutional by the Massachusetts Supreme Judicial Court.

The Association testified in opposition to the legislation. Credit union testimony highlighted the stellar record of credit unions in working with their members and their communities, particularly in the mortgage arena to successfully get and keep members in their homes. Comments addressed the overreaching and overbroad provisions of the bill that would complicate a delicate process that has not been abused by local credit unions, and which do not serve to further consumer protection goals but rather will further delay credit unions good faith efforts with members and ultimately serve to penalize them as local valued lenders. Credit unions continue to remain eager and available to work with their local communities to address any pre- or post-foreclosure concerns. Additionally, as a number of other related bills remains pending before other Committees, it was suggested that the issue should be reviewed holistically and in consideration of existing state and federal foreclosure mandates with which credit unions currently comply.

The Association continues to monitor Committee calendars for upcoming public hearings and will keep members apprised accordingly.