The capacious S. 10 bill has cleared another hurdle by passing out of the Joint Committee on Banks and Banking favorably and relatively intact last week.
Sen. Andrea Nuciforo Jr., D-Pittsfield, drafted the bill to clean up a plethora of past legislation that had become outdated and restrictive. The world of financial services is a vastly different one than it was when a host of state banking laws were originally passed.
In addition to making changes to what qualifies for Community Reinvestment Act credit and changes to bank charter regulations, the bill rewrites the state’s mortgage lending statute. It eliminates the several categories of ‘loan-to-value ratio’ mortgages, uses safety and soundness and capital structure as the principal criteria for mortgage lending and requires that any real estate mortgage written must be eligible for sale into the secondary market, according to the redraft.
A spokeswoman for Nuciforo said that although the bill was redrafted in committee, the senator is generally pleased with the outcome: There were small changes at the request of the commissioner [of the Division of Banks] but they weren’t changes that altered the intent of the legislation.
It has a lot of very positive components, said Kevin F. Kiley, executive vice president and chief operating officer of the Massachusetts Bankers Association. In general, Kiley said the MBA was pleased with the bill but remained troubled with some components, including one that allows credit unions to expand branches statewide. Kiley added that since the redraft of the bill came out mid-week, the MBA is still evaluating the text.
From here the bill will probably go to the Joint Committee on Ways and Means and there is still the possibility of further amendments, but no definitive action is likely to take place on the bill until next year, according to Nuciforo’s spokeswoman.