The2nd meeting of the Special Advisory Commission of Senior Citizens Subcommittee on Consumer Affairs was held on Thursday, November 5, 2009, at 2:30 PM, in Assembly Ball Room III in the Capital Plaza Hotel. Claude Tiller, Chair, called the meeting to order, and the secretary called the roll.
Guests: Amy Shir, Chairperson, Kentucky Coalition for Responsible Lending; Bill Harned, Advisory Council of Consumer Affairs, Office of Attorney General; Johnny Cantrell, Consumer Credit Counseling Services.
LRC Staff: Adanna Hydes and Betsy Bailey.
The Subcommittee on Consumer Affairs began its Thursday afternoon session with a discussion on setting loan caps at 36% for pay day loans. Ms. Amy Shir, Chairperson for the Kentucky Coalition for Responsible Lending, led the discussion and provided the subcommittee members with interesting and persuasive testimonials and facts related to the impact of high interest loans on Kentuckians.
The Subcommittee on Consumer Affairs has followed this issue for several years identifying the negative impact that predatory lending has on Kentucky’s families. The 2009 General Assembly passed HB 444 which began a monitoring and tracking program for pay day loans, but the subcommittee recommended an amendment to the bill to provide additional consumer protection enhancements.
The council has been reviewing regulations for the practice of debt management and found that several areas should be investigated. As people are struggling with the economy, unscrupulous businesses are seeking those families in financial crisis and are finding loop holes in the current provisions. Bill Harned, a member of the subcommittee, who serves on the Attorney General’s Advisory Council on Consumer Affairs, introduced Johnny Cantrell, Consumer Credit Counseling, who provided additional information on debt management and what consumers should look for in a financial services representative. Several of these criteria are being recommended as statutory changes in KRS 380. Additionally, Mr. Cantrell provided an overview of pending federal changes in credit card provisions that will take effect in February 2010.
The subcommittee recessed until 8:30 AM, November 6, 2009.
The Subcommittee on Consumer Affairs of the Special Advisory Commission Senior Citizens met onFriday November 6, 2009, at 8:30 AM, in Assembly Ball Room III in the Capital Plaza Hotel. Claude Tiller, Chair, called the meeting to order, and the secretary called the roll.
Members:Claude Tiller, Chair; Aaron Cardwell, Norietta Dickerson, Gloria Hall, Bill Harned, Faye Hensley, Marty Herbert, Lee King, Joan Veazey.
Guests: Trey Grayson, Secretary of State.
LRC Staff: Adanna Hydes and Betsy Bailey.
Trey Grayson, Secretary of State, discussed early voting options for seniors and persons with disabilities. Secretary Grayson said that he is a proponent of early voting options. Evidence from states where a system for early voting has been implemented may indicate increased voter turnouts. He provided background information on elements that have been viewed either positively or negatively and that prevented the implementation of early voting options.
The Subcommittee on Consumer Affairs urges the Commission to continue as its top priority increased funding for AAA. The following recommendations were presented to the Special Advisory Commission on Senior Citizens:
1) Urge the 2010 Kentucky General Assembly to provide adequate funding in the 2010-2012 biennial budgets to restore the budget cuts in the 2008, 2009 and 2010 fiscal years; and in addition increase the appropriations to AAA by at least 10% per year in the 2010-2012 biennial budgets.
2) Urge the 2010 Kentucky General Assembly to direct the establishment of an early voting option for eligible voters.
3) Urge the Kentucky General Assembly to enhance consumer protection measures in the current “pay day lending” statutes KRS Chapter 286 to include the following provisions:
o Limit interest on short-term loans to 36 annual percentage rate;
o Substitute the term “short-term” loan for deferred deposit transactions;
o Limit borrowers to one short-term loan at a time, up to $500;
o Extend the minimum term of a short-term loan to 30 days;
o Limit borrowers to one short-term loan every 90 days;
o Prohibit licensees from making short-term loans by telephone, mail, or internet; and prohibit licensees from accessing borrowers banking accounts electronically;
o Provide for enforcement by the Office of Financial Institutions or Attorney General, and allow borrowers to take legal action if loans violate the statute.
4) Urge the General Assembly to amend KRS-380 addressing practices of debt adjusters. Modifications recommended for inclusion are:
· Prohibit up-front fees,
· Written contracts,
· Consumer disclosures/right to cancel,
· Clear enforcement authority for OAG and
· Privacy protections.
There being no further business, the meeting adjourned.