Pub. 16 2019 Issue 1

6 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G N E W M E X I C O R E A L I Z E D R E A M S privacy development ever. • Early Childhood Education: The Legislature did not approve HJR 1 which sought to amend the New Mexico Constitution to provide an additional 1 percent annual distribution from the Land Grant Permanent Fund (LGPF). The proposed amendment stipulated the amount of the additional distribution coming from the permanent school fund was to be earmarked for early childhood educational services. The amendment defined “early childhood educational services” as nonsectarian and nondenominational services for children until they are eligible for kindergarten. The additional distribution increased the overall rate from 5 percent to 6 percent. • Cannabis: HB 356 would have enacted the Cannabis Regulation Act (CRA), which would decriminalize the possession of not more than one ounce of cannabis (or eight grams of cannabis extracts) and ingestion of canna - bis in various forms for nonmedical (adult-use) purposes by a person who is 21 or older, from a state-owned store. Other Bills Not Enacted but Issue Addressed: • Liquor license reform; • Paid Family and Medical Leave Act; • Student Loan Bill of Rights Act; • Right to Work; • Deed of Trust Act revisions; • Re-impose gross receipts tax on food; • Increase gasoline and special fuels tax; • Capital Outlay Reform Act; • Moratorium on hydraulic fracturing; • Increase on the royalty rate on future oil and gas leases on state lands; • Uniform Environmental Covenants Act; • Personal income tax credit for installing solar panels Federal Legislative and Regulatory Matters: Several New Mexico bankers recently attended the annual ABA Washington Summit to hear from legislative leaders and regulators concerning the federal issues of the day. Representative Maxine Waters, Chairwoman, House Finan - cial Services Committee, previewed policy initiatives that her committee will pursue, including housing reform, cannabis banking and Bank Secrecy Act/anti-money laundering reform. Waters emphasized that it is time for Congress to reform GSEs and highlighted several principles that should underlie any reform proposal, including maintaining access to the 30-year fixed-rate mortgage, ensuring that sufficient private capital is in place to protect taxpayers and maintaining credit access for borrowers. The inclusion of small financial institutions must be a critical part of any conversations on GSE reform. On the issue of cannabis, Waters touted the committee’s recent passage of the SAFE Banking Act, a “long overdue” effort to provide a safe harbor for banks serving legitimate cannabis businesses. Senator Mike Crapo, Chairman, Senate Banking Com - mittee, discussed the Committee’s agenda for this term of Congress to include: housing finance and data security are top priorities. He noted that housing GSEs, Fannie Mae and Freddie Mac, have to be “fixed”. We were able to meet with our New Mexico Congressional delegation to discuss the legislative and regulatory issues of paramount importance to our industry to include. • Modernize Anti-Money Laundering/Bank Secre- cy Act Laws: Congress can assist banks to be more ef- fective in fighting money laundering and terrorist financ - ing by updating the anti-money laundering /Bank Secrecy At (AML/BSA) regime to make it more efficient. The basic AML/BSA compliance structure has not changed since 1970, even though banking law enforcement and technol - ogy have changed dramatically. We requested that our Congressional delegation support reform of: - Customer Due Diligence: Banks collect informa- tion about the true owners of their legal entity cus- tomers, but they have no way to verify the information provided. A federal registry of beneficial ownership would provide a source to validate the data and ensure its accuracy. It also would facilitate law enforcement’s access to the information. - Currency Transaction Reports (CTRs): The current $10,000 threshold for filing a CTR has not been changed since it was adopted in 1970. If adjust - ed using the Consumer Price Index, the threshold to - day would be $63,000. A seasoned customer exemp - tion-within parameters to be set by Treasury-would also help reduce excessive CTR filings, making it easier to spot critical information. - Information Sharing: Suspicious activity reports are more useful when financial institutions share infor - mation with each other, yet the process for sharing is hindered by red tape. Improved processes and better feedback from law enforcement about priorities, possi- ble illicit activity and how BSA data is used would help banks more efficiently focus limited resources. • Establish a Strong, Consistent Data Security and Privacy Standard: While robust federal data security and privacy requirements for banks have been in place for over 20 years, other business sec- tors lack comparable requirements and have been the source of many large-scale breaches. To help con- sumers understand their rights and responsibilities, transparency is important and a national standard that preempts state and local data protection stan- dards is essential. We support legislation to protect consumers that includes: - Privacy Rights: A national privacy standard that rec- ognizes the strong privacy and data security standards that are already in place for financial institutions under the Gramm-Leach-Bliley Act (GLBA) and other federal fi - nancial privacy laws and avoids provisions that duplicate or are inconsistent with those laws. - Strong Data Protection and Breach Notice: Ensure that all entities that handle sensitive personal information are required to protect that data and pro- vide notice in the event of a breach that puts consum- ers at risk. - Robust Enforcement: Provide robust, exclusive enforcement of this national standard by the appropri- ate federal or state regulators, including preserving the GLBA’s existing administrative enforcement structure for banks and other financial institutions. n EXECUTIVE VICE PRESIDENT’S MESSAGE continued from page 5