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Senate committee adopts small wording change to bank loan renewal language; bill passes
Summary
A Senate Insurance & Commerce committee adopted an amendment changing “a renewal” to “each renewal” in a banking bill and then approved the bill as amended. Sponsors said the change clarifies how loans secured by stock are handled when a bank acquisition occurs and avoids unintended violations on acquisition.
A Senate Insurance & Commerce committee on an unspecified date adopted an amendment to a banking bill that replaces the phrase “a renewal” with “each renewal” on page 2, line 15, and then passed the bill as amended.
The amendment, introduced by Senator Ricky Hill (Senate District 11), was described as a two-word technical change intended to clarify the timing of renewals after a bank acquisition. "The amendment just changes, 2 words on page 2, line 15," Hill said when presenting the change.
The change was adopted by voice vote after a motion by Senator Flowers and a second by Senator McKeown. After discussion, the committee approved the bill as amended on a subsequent motion by Senator Matt McKee, seconded by Senator Flowers.
Why it matters: supporters said the amendment prevents a purchasing bank from automatically putting itself in violation of state banking rules when it acquires loans secured by stock in a previously independent bank. "It's giving the bank more latitude so that they are not in violation automatically and that it does not burden the customer at that point in time," Eric Roberts of the state bank department said during committee discussion.
State Bank Commissioner Suzanna Marshall and Eric Roberts were present to answer questions. Committee members asked about fees that might be charged at renewal. Roberts said banks set renewal fee policies individually: "As far as the fees go, charging at renewals would actually be up to each individual bank," he said.
Senator Stephanie Flowers raised concerns about situations involving guardianship estates for veterans, asking whether acquisition and renewal treatment could subject a ward’s estate to fees or require court actions. Committee members and staff clarified the bill's scope. Marshall and Roberts said the measure is intended to allow a bank that acquires a loan secured by stock time at the normal renewal or modification to resolve collateral issues without creating an immediate compliance violation.
The committee adopted the amendment and later approved the bill as amended. Committee members did not provide an item number or bill title on the record at the time of this transcript.
The committee moved on to House Bill 1193 after approving the banking bill.
