Today, we continue with House Bill 2423, which ensures that Oklahoma’s banking laws apply to savings and loans as well.
Posts tagged: HB2423
This year, Governor Fallin signed 394 pieces of legislation. I was the primary Senate author of 11 of those bills. Over 11 days, I am telling the story of each bill – where it came from, how it progressed through the Legislature, and what it means to the people of Oklahoma. This is in keeping with my longstanding support of transparency, and hopefully you’ll find this exercise insightful.
I’m not going to lie to you. This bill is as obscure as it gets, and it’s definitely from the “belt and suspenders” philosophy. Here’s the background:
Regular folks generally just think of places to park your money and to get loans as banks. If you do business at a credit union, you may realize that is a different legal entity, but you probably have a hard time telling the difference. The reality is that they are very different, and there are also other types of financial institutions, including savings and loan associations. There are a handful of such savings and loans in the state, and their customers very likely think of them as banks. But the law sees them differently.
There is a section of Oklahoma law applicable to only savings and loans, but it says that savings and loans can also act like banks. Specifically, the statute on savings and loans states:
“In addition to other provisions of this act relating to deposit accounts, an association may exercise the powers and authorities applicable under the provisions of Article IX of the Oklahoma Banking Code, Sections 901 through 907 of Title 6 of the Oklahoma Statutes.”
That is pretty straightforward language that seems to say that savings and loans can use the banking laws as well as the savings and loans laws, but when lawyers get involved, nothing is straightforward.
At some point, for no specific reason I am aware of, the attorney for the Oklahoma Bankers Association grew concerned that someone might sue a savings and loan and allege that it could not take advantage of the sentence quoted above for banking laws passed after the enactment date of the sentence above.
I’m sorry, what did I just say? Allow me to try to unpack that.
Let’s pretend I said to you on Monday, “Hey, you can borrow any of my books anytime.” You would take that to mean that you could borrow any of my books anytime. But what if I bought a book on Tuesday, and then you tried to borrow it? And what if I then said, “Whoa, whoa, whoa, I told you on Monday you could borrow any of my books. I obviously only meant the books I owned as of Monday, not any books I may buy after I made that offer.” This type of literal communication would make ordinary life unbearable, but it’s the world lawyers live in every day.
So, the lawyer for the bankers association, which also lobbies at the Capitol for the savings and loans, had a fear. The fear was that the law allowing savings and loans to use banking laws may one day be interpreted by a court as merely a “snapshot in time.” That a court may say, “Well, sure, you can use the banking laws like it states here, but only the banking laws that existed at the time this allowance was given.” Why would a court do this? Why would someone sue a savings and loan over this issue? Why doesn’t Donald Trump try reading a book sometime? These are all unanswerable questions. But two of these three questions ended up being a part of my life this session.
In February, the representative of the bankers and savings and loans came to me and me and said they had a bill in the House that would ensure the handful of savings and loans in the state can take advantage of the state’s banking laws. Okay, sounds great, I must have said. And so I agreed to be the Senate author of HB 2423, by Rep. Bobby Cleveland. I’ve talked in past episodes about being the author of a bill that originates in the other chamber and the frequent lack of communication between a House author and a Senate author. Those trends were in full effect here. I had no involvement in HB 2423 until it reached the Senate, and I never spoke once to Rep. Cleveland about it.
And so, after HB 2423 passed the House 84-0, it arrived on my desk, and I began to fully appreciate what I had inherited from the House. First of all, the bill was six words long. Literally, the operative language of the entire bill was six words. Those six words were being added to the sentence I quoted above, so that it would now read:
“In addition to other provisions of this act relating to deposit accounts, an association may exercise the powers and authorities applicable under the provisions of Article IX of the Oklahoma Banking Code, Sections 901 through 907 of Title 6 of the Oklahoma Statutes, as amended from time to time.”
“As amended from time to time.” That was it.
I called the lobbyist for the bankers into my office, and pretty much delivered a one-man performance of the Saturday Night Live “Seriously??” sketch.
“Do we really need this? Is this really necessary?” I asked.
“Our lawyer thinks so,” he replied.
So I insisted we get her on the phone.
In fairness, she was absolutely sincere in her fear that a court some day might interpret the current law in a hyper-literal fashion.
And so I faced a decision. If I were having this conversation in January as the potential original author, and the question was whether to introduce this bill at all, I simply would have said no, or more politely, suggested a different author. It wasn’t necessary, or at least it was highly unlikely to be necessary. But, that wasn’t the situation. It had already passed the House. Eighty-four House members had weighed in, and it was already half way to the Governor’s desk. Additionally, it was absolutely harmless. I would have killed it in a heartbeat if it had a downside, but it didn’t. Even if the six words weren’t necessary, they certainly did no harm. And it certainly wasn’t controversial, so there was no way it would tie up precious legislative time with questions or debate. The Governor was ultimately going to sign almost 400 new laws, why not this one, too? And maybe, just maybe, in an alternate universe, we didn’t pass HB 2423, and twenty years from now, the Oklahoma Supreme Court causes a bunch of mischief for some poor savings and loan by using a hyper-literal statutory interpretation. So, with a sigh, I said, “Let’s proceed.”
And we did. Not surprisingly, the consideration of HB 2423 in committee and on the Senate floor probably took a combined two minutes. It passed the Senate 41-0 on April 11th, and the Governor signed it April 18th. It takes effect, such as it is, on November 1st.
Since I was elected in 2010, I’ve authored 60 new laws as a Senator. Virtually every single law was very meaningful to me and my constituents. I’ve authored laws that saved lives. I’ve authored laws that created jobs. Virtually every single one took time, energy, and represented the culmination of my life experience. But HB 2423? Not so much. Having said that, lots of laws considered by the Legislature would actively do harm to our state, so if the worst thing I can say about the most inconsequential law I ever passed is that it didn’t harm anything, it wasted no time, and it might even help a savings and loan some day, well, I guess that’s okay.
Tomorrow, we’ll continue with another episode of #11BillsIn11Days.