2021-10-26 00:00:00 - Joint Committee on Financial Services
2021-10-26 00:00:00 - Joint Committee on Financial Services
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well I'm the best. Okay good. Yes,
yeah. Then you all set Ok. Mhm. The Joint committee on23 Financial Services hearing the water Brendan Crighton senator for the third Essex district in29 the Senate. Chair of the committee doing here by my coach here. Markey33 here, here's are we elected officials out of turn. So here today I respectfully ask all those testifying uh testimony under three minutes will have a timer as we do have a very long list of testifying today. We want to give everybody the opportunity to share their God forbid two slices. Uh
Sure, good morning everybody. Thanks for logging on today. Obviously you can see us here at the state house for broadcasting live again, but we're still taking testimony through this online platform. As I always say, we'll all be back in the building at some point but thanks for being with us during this process and I'll turn it back over to my fellow Chairmen Brendan Crighton thank you. Mr Chairman I also should have mentioned that you will be taking any written testimony so please email or mail committee. Uh with any additional testimony with that, I'd like to welcome state representative mike Connolly speaking representative to be part of a panel.
[REP CONNOLLY:] Uh Good morning check writing. Uh So yes,108 I'm here with my colleague sponsor rep Nika Elugardo Can you hear me?113 Yes we can. Thank. Okay, well thank you. Chair Crighton and chair Murphy for taking me out of turn. Um And good morning to members of the committee as I mentioned, I'm here to testify with rep nickel Elugardo and Senator Jamie Eldridge in support of our bill and act to establish a massachusetts public bank. This concept was originally championed by former rep fire in Russian during my first term in office, I had the distinct honor of appearing before this committee with rep rushing as well as former rep mel king and as you will see from the panels that have gathered here today to support the bill, this legislation has evolved tremendously over the past year. You'll hear from an illustrious group of banking experts, officials and advocates who will tell you about how this can really help to meet our goals for equity across the commonwealth.
Briefly, this legislation would set up a public bank owned and operated by the commonwealth. It would make low cost loans to municipalities, local businesses and farmers. And this assistance would help lower debt costs for local189 governments and encourage entrepreneurship by192 providing loans with flexible and attractive terms, particularly in communities of color and in gateway cities. Additionally, it would provide financing to organizations such as community land trusts and farmer and worker co operatives not currently served existing private anything sector, notably our bank would not seek to compete with the commercial banking sector. Rather, this is about smartly leveraging state resources to address needs that the commercial banking sector is often unable to meet. In227 fact, our bank would look to partner with commercial banks, thereby helping to make232 more projects and small businesses bankable where they otherwise may not be.
You will hear from several stakeholders, including Somerville mayor joe carter Tony provincetown town manager Alex Morris and others who will articulate why the commonwealth ought to provide more financing options for local municipal projects and how the current bond and loan markets are often insufficient for the infrastructure needs of our municipalities. Then you will hear from sam Galabru, director of policy and public affairs at the Black Economic Council of massachusetts and cassie, infant manager of the Black Mass Coalition on how public banks can help to create a post pandemic new normal by ensuring communities of color are not only bounce back from the economic destruction brought on by the pandemic, but also close existing racial gaps in economic outcomes.
In addition, you'll hear from Dorado espinosa, executive director of the local enterprise assistance fund, among other finance experts with the private sector who will deliver financing options and rounding out our panel today, you'll hear from nancy Ryan and others from the massachusetts Public Banking coalition on the robust governance structure of our proposed bank in closing and I'm trying to go quickly to get through all his testimony, I am grateful for and321 very proud of the coalition that has emerged to champion this sessions revised proposal and I would respectfully ask the committee to work with us to advance this bill favorably. We filed the legislation to provide better financing options for our cities towns and small businesses and more broadly so that we as a commonwealth can meet the demands of this moment to better leverage public funds to348 accomplish our climate roadmaps to close racial wealth gaps and to fully fund infrastructure and other urgent policy goals. With that, I'd like to say thank you once again for taking me out of turn and I will pass it along to my co sponsor rep Nika Elugardo
[REP ELUGARDO:] Thank you Representative and thank you Chair Murphy and Crighton both for uh, taking us out of turn today, but also for your commitment talking with us before and after this to really understand what is in this bill that can really be387 uh, make a stronger commonwealth. And that you really look at dismantling what dismantling structural inequities including, but not limited to structural racism looks like in the financial sector. And so I am grateful to all the members of the Financial Services Committee for hearing us in this well organized group of advocates and academics out today. I just want to put a little context because I'm going to try not to repeat things that I already know we're going to be said people a lot smarter than I am with regard to financial services.
When I began to uh think423 about running for this office. L king former state representative have been for 20 years plus trying to get me to run for office. And so he was the first person that I told, okay, I'm ready, it's 26 2017 I'm ready to440 go for it. And he said to me, okay, the first thing I want you to do is file a public banking bill. And he had been a professor of mine 25 years prior and I remember453 talking about the North Dakota Public Bank at that time. And so he refreshed my memory as professors I want to do. And uh, and and got me excited about it. When I met with rep Connolly last session, I realized, wow, this is very complicated and I'm not one to file a bill. I don't really understand. I ended up doing that anyway, as I mentioned the chairman in a previous conversation because after several hours of tutorials from some of the folks we're going to hear today, I don't fully understand the nuts and bolts. So I am grateful that Senator Jamie Eldridge with his great team has prepared to present to you in the nuts and bolts From the legislative side. He'll be on closer to 1130 because he is currently testifying on Medicare for all.
But what I do want to say is500 this isn't my first time entering into the banking world as a way of dismantling structural racism and structural inequities, not just in urban areas, but across the commonwealth twice I have led and even founded in one case, uh, statewide coalitions that work with the mass bankers association Once in 1990, sticks and in the mid-90s when we were trying to convince bankers that foreclosure prevention is the thing that they could be involved in. And it's kind of hard to remember that back then, that534 was a controversial idea. And I was the math kid, I was straight out of M I. T. And it was my job to show them that the math actually works that, you know, even though in those days in the nineties housing advocates were calling bankers fascist and bankers were calling housing advocates communists uh, that there was actually a middle ground here. That was a shared ground in grad school Leadership.
We called it the job of the zone of possible agreement and the zone of possible agreement was brought. And when we could show how that map worked, we got to testify before Congress and 400 prevention became the way to do things now. And 80 to 90% of families573 and individuals are able to save their homes through these products that traditional banks, as well as community banks are offering the second time after former Treasurer steve Grossman and others, uh, including Mass bankers Association talk to me to help develop at a development programming across the state. And I594 see Representative Carmen Gentile on, he's actually filed a bill related to that,599 uh, not really what we're doing today, but still doing that good work. And I remember when the nonprofit members of my board, when you go to Mass makers where609 they're not going to listen to this vision that you have economic justice they don't believe in. And I remember when I met with past maker, SHOW NON-ESSENTIAL DIALOGUE
I
have to have to deal with uh, representative630 just want to remind folks, please mute your microphone so we can hear a lot of feedback there. We want to be able to hear the folks testifying clearly. Sorry to interrupt representative. I don't know problem thank you very much chair because I don't know if that was you telling me to be quieter. Uh,
but what I was saying is that I went to a meeting of some of the BPS that I was working with that mass bankers association and I told them straight out the nonprofit members of our board told me that you don't care about economic justice. But my presumption is that people think that about you because you generally are not included in our conceptions of justice. And that was when the occupy movement was going on in boston and some of these bankers are having trouble even getting into their offices now. No, just on the occupy movement, it had a really important A set of values that was bringing forward. But my goal at that time was not to be 99% but to be 100% meaning that we had to include the top 1% in our efforts to dismantle structural racism.
And I explained that to them and I691 said I want you to be part of justice, not on the outside of it. And we got unanimous approval to use an economic justice mission. And to have a mass bankers signed on to that. So my point is sharing those stories is, yes, we are going to talk about how the public bank can support municipalities and crises like covid that we know we're going to and I'm crises in ways that traditional banks need partners from in bank. We know that bipac small businesses and nonprofits often need non traditional financing and the community banks can be part of that, but not all of it. We know that we need more flexible730 financial products, longer term effects. We need to be able to develop land trusts, uh, and to have a little bit more talent error uh, with, with really small projects that very often traditional banks aren't equipped to do for more than a couple in their community Ultrino and I can affect them. And I said I wanted to be part of justice, not on the outside of it.
And we got unanimous approval to use an economic Yeah, that's my voice actually, I don't know how that anyway. I'm wrapping up. So you'll get to have tech problems with somebody else really. Uh My point is that, yes, we want to do all that stuff that uh we're going to come in and talk about. But770 if we really mental, not just dismantle this is actually an opportunity to reverse structural inequity in the financial services system. We're gonna need mass bankers and the bankers to get on board. And so I'd love to help with this781 committee really helping us work with the language to address their concerns. I know that Dykema met with them just this morning. Uh You know, it's a great group of folks there. I really think we can figure this out.
And I'm asking the members of the committee the committee to help us do that. They're concerned about undue competition. Uh I'm hearing their concerns about maybe this isn't necessary, we want to show them using the math and academics805 it is necessary. But we also can do it in a way like with foreclosure prevention, like with asset development and low income communities that actually benefits banks community and large banks as well as uh lifts up those people that have been left out of the financial services system. So please help us out with this esteemed members of the community and thank you again, chairs for seeing us826 out of turn,
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thank you. Representative, did you mention that Senator Eldridge was going to be on later or if he currently That's right. He is uh testifying in another hearing right now and he will be on, he said around 11, 30, I'm sure his staff will let you know when he gets here. Great, thank you. Any questions from members of the committee
seeing none. Thank you Representative for your testimony next. I'd like to welcome Representative tram. Nguyen. Mhm.
[REP NGUYEN:] [HB1168] [SB663] Thank you senator. Good afternoon to both You and share Murphy And members of the committee thank you so much for giving me this opportunity to testify in strong support of House bill 11 68 and Senate bill 663,871 the debt collection fairness act, which I filed with Representative Christine Barber and Senator Jamie Eldridge. I want to start by thanking the committee for its tireless work last session to bring both sides together to negotiate this bill and through a rigorous vetting process. The committee arrived at a compromise redraft bill which was favorably reported out last session in which we filed this session using the communities language. And so um also I want to thank the supporters of the bill, several you'll hear later on testify and I really appreciate the honestly and this issue. Their stories really illuminate why we need to put an end to abusive debt collection practices. And so as you know, the reforms in our bills are necessary to the well being of nearly 20% of Bay Staters who pre Dimick had a debt in collections affecting nearly 39% of people and communities of color numbers which have927 likely only grown because as a result of the pandemic and so three key provisions of this bill is number one, it protects more wages from garnishment.
Under present law, any income over 675 per week is subject to wage garnishment, even though the M. I. T. S. Living wage calculator and indicates that a living wage for one adult with two Children in massachusetts is 1000 about $1900. But the DCF953 A would give additional protection from garnishment to lower income workers and increases protected income to $945 per week. Essentially, this bill would raise the protected income threshold from 50 times to 70 times the minimum wage or about $46,400 per year with the 10% cap on earnings over their mouth. Secondly, the DCF, they would reduce the interest rate on judgments which currently is,980 we in Massachusetts have the highest in the country at983 12% and only two other states have this high rate.
And so this bill would bring it down to a rate of about 6%, which is in line with most other states. Many of the people affected by this are low income, usually having no representation. Um some may not even speak English as their primary language. And so a 12% interest rate on debt for people who can barely afford to pay the minimum means that they will be saddled with this debt forever and1010 never get out from under it. So this is absolutely unacceptable and must change in our minds. And finally this bill would put an end to the practice of using KPs warrants to pressure debtors into making payments. It's so important to emphasize especially during this time when all of us are looking to recover from the pandemic that no one should be imprisoned for failure to pay a consumer debt.
And so the current law simply does not reflect the values and culture of the commonwealth. And we believe that the DCF contains key reforms which are crucial to protecting consumers who have been suffering greatly from1045 financial burdens of the pandemic and even before that and would help them address their debts without being further injured by cruel collection practices. And so the bill before you reflects this committee is hard work and thoughtfulness during the last session and I hope that it will be reported out favorably again this session. Thank you so much for your consideration and I'm happy to answer any questions that you may have. Thank you. Representative. Any1069 questions from members of the committee SHOW NON-ESSENTIAL DIALOGUE
seeing none. Thank you again represented for your testimony. I'd like to welcome up Representative James O'Day
Representative day you there? Yes john Ben, we'll circle back to the rep. Next up, Christine Barber
[REP BARBER:] [HB1168] [SB663] Thank you. Chairman Chair Murphy chair Crighton appreciate your time today. Um Members of the committee, thank you for allowing me to testify and taking me out of turn. I am also speaking on the bill that I filed with rep win. Um house 1168 and its Senate counterpart an act relative to fairness and debt collection. So rep win did a great job going through the bill and I don't want to repeat what she said. So I'll just focus on um I think why the bill is so important, so debt collection practices and and consumer protections or something that this legislature has looked at before. And many in our state we know are struggling financially now. I actually heard from constituents before the pandemic including before this committee, um about how challenging debt collection has been for them. Um so pre pandemic, 20% of mass residents had were in debt collection and particularly in communities of color. Those numbers are even higher at about 35 covid like many things has exacerbated um that challenge and we know that there's so much more hardship across the commonwealth, particularly for communities of color.
Um and that many more people are in debt collection. So as rep Nguyen stated, this bill prevents wage garnishment, reduces the interest rate and in a really important piece uh, ensures that no one in the commonwealth be imprisoned for paying for not being able to pay consumer debt. This is something that does not in line with the values of our commonwealth as we're trying to address mass incarceration. Um the threat of these warrants can really terrify consumers even if their income is exempt um and get them to make payments. So incredibly appreciative of the leadership of this committee and all the work that was done last session to move this bill favorably. We did file the committee redraft the same bill that was reported out last session. Um We filed that this session and I respectfully request that the committee again report this bill out. So thank you so much for your work and happy to of course answer questions and work with you on this bill.
Thank you Representative. Any questions from members of the committee,
seeing none. Thank you again for your testimony and for your hard work on this important issue. Next I'd like to welcome representative lawyer. Ehrlich testified. Yes.
[REP EHRLICH:] [HB1077] Um Thank you, Senator Crighton and Chair Murphy Um and honourable members of the committee. I'm grateful for your attention today and thank you for taking me out of turn. Um The purpose of this bill is not complicated, which is a rarity for me. Um It is in the most basic sense, it's it's H 1077 and its purpose is to help individuals who declare bankruptcy, rebuild their credit ratings by requiring reporting of the post bankruptcy mortgage payments that they make to the appropriate credit agencies. Um Currently, when a consumer declares bankruptcy, they can choose to arrange with their bank to allow them to stay in their home and make monthly payments toward their mortgage. Um This allows the consumer to remain at home, not making them homeless and allows the bank to avoid the whole foreclosure process.
This option benefits both parties but also provides an additional opportunity for consumers to rebuild their credit on the road to eventual solvency. Um The legislation would require that banks report consumer payments made under bankruptcy agreements to credit reporting agencies, which places1326 an affirmative duty on financial or consumer lending institutions to help them rebuild their credit. If the banking institutions failed to report the payments, they will be liable for damages to the consumer. The bill aligns the reporting of bankruptcy payments to credit rating agencies in the same way in which other credit depths are reported. So this is not new. It's just aligning it. It includes the calculated damages that can be claimed if they fail to comply with the reporting as well. The agency that fails to report will be required to correct the error of reporting and will be subject to a fine um to1367 be enforced and collected by the attorney general of no more than $10001371 for the first offense, 2500 for the 2nd and 5000 for1375 the third and subsequent offenses.
Um I just ask that you provide this legislation with a favorable favorable report so that we can assist those who are suffering through hard times and especially those impacted by the ongoing housing crisis which of course as we just heard in previous testimony, exacerbated by the covid 19 pandemic, help those who are most in need rebuild their credit and get on a path to affording a home for themselves and their families. So um not complicated. Um That's my testimony. If anybody has any questions, I'm happy to entertain questions and look forward to working with the committee. Um You know, to get this bill over the line. So I also want to mention that um Hopefully my constituent barry Levine who's a bankruptcy attorney will be coming by, he's in court today. I think he's going to be attending on his phone. So if you see a telephone in the lineup, it might be him. Um But I thank you for your attention and look forward to working with you on this.
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Thank you. Representative. Any questions from members of the committee?
Uh Representative Karen's I I believe I missed you. Uh in the previous testimony. Do you have a question for the Representatives? Ehrlich or was it for the previous testimony? Mhm. Mhm.
[REP KERANS:] Thank you. I think I've been muted. Thank you. Mr Chairman. It was a question for1462 um My colleague Representative Barber I'll get her off line. It was just the degree to which people are in fact incarcerated because they have debt. Um Which is pretty shocking. But I won't take the committee's time. I'll get with her.
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I'm sorry. No, that's okay. That's all right. So we'll have other folks testifying that bill shortly. So maybe they might be student to answer that question. But sorry about that and with that. Uh Thank you Representative earlier for your testimony and commitment to this issue, I would like to recognize a number of the members that we have here today from the committee Representative Lipper-Garabedian Representative Karen's, we just spoke to representative Owens, representative Barrows and uh senator Kennedy uh so thank you to all the members for being present today. I will try to keep a better eye on when you raise your hand and please feel free to speak up to if we overlook any questions that you may have next. I'd like to welcome uh State Senator Jamie Eldridge.
[SEN ELDRIDGE:] Great thank you so much. Chair Crighton chair, Murphy members of the committee uh Financial services, thank you so much for taking me out of turn and I'm testifying on three bills today. Uh The first is the debt collection fairness act which represented Barber represent Nguyen and I filed together and um as both of them highlighted, we have re filed the bill that came out of the committee last session. Uh so we really appreciate the work the chairs did on the bill last session and that's where we re filed it. Um I won't go into too much detail other than to say that given the increased deaths that a lot of working class families have taken on as a result of the pandemic, I think this bill is needed even more. Um and just a quick example of where we're really sort of um out of out of touch or out of the scope of other states is around the interest rate. Um, right now, Massachusetts has an interest rate on judgments at 12% when almost every other state is 6%. So that's just one small example of how much we need to update our, our debt protection laws.
And I think this is a very common sense bill that will do that. The second bill I'm proud to speak on1600 today is the bill to establish a public bank Senate 6 65 which I filed, Representative Nika Elugardo and resident mike Connolly, I would provide low interest loans to key capital stored sectors of our economy. I think what I find in my conversations with small business owners and entrepreneurs is that while our banks and credit unions provide credit to a large number of1626 these small businesses and entrepreneurs, there are many that are left out of the system and that's why we need this state bank to provide credit and create jobs and expand the economy. Um, and finally, the last thing I wanted to highlight his Senate 660 to enact relative to savings. It would create1644 a match savings program to help working class people that are saving money and match at a 4-1 ratio monies. They can save up money to go to college, buy a1654 home, start a business. And this is part of how I think uh, to the chairs, we get out of so many people being left behind in massachusetts who are low income and working class. So thank you so much for the chairs for taking me out of turn and uh have to answer any questions.
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Thank you Senator. We appreciate your testimony. Any questions from members of the committee. Mhm.
Seeing none. Thank you again, Senator. Mhm. I'd like to welcome state Senator Adam Heinz to testify if he's on
circle back with Senator Heinz, State rep Carmine. Gentile Yeah. Mhm.
[REP GENTILE:] [HB1099] [SB662] Good morning and thank you. Chair Murphy Chair Crighton and members of the committee. Thank you for1705 taking me out of turn. I'm honored to speak today in strong support of House 10 99 and Senate 6 62 which Senator Eldridge just spoke of and and filed an act relative to savings enabling prosperity. This bill would establish a state funded match savings account program that would assist low income families with a 4 to 1 match when saving for college expenses, buying a home, starting a business and other important goals. Savings and assets play an important role in economic stability and upward mobility for families with low incomes. Financial security should not be a privilege only available to the wealthy. All working families should have enough money to pay for basic1755 necessities, healthful food rent, utility bills and still have enough left over to save at difficult times and build assets. This, however, is not the case for thousands of families employed across massachusetts, even with full time work, low wage jobs rarely provide enough money to offer economic security for families, financial coaches and other direct service providers see the everyday challenges of residents as they try to pay down debts, build their credit and find good jobs.
Match savings programs can effectively support savings and wealth building and can help connect people with low incomes to mainstream financial services. Over the past 201798 years, nonprofits and local organizations have designed and administered successful match savings programs to assist our most underserved constituents in the commonwealth. The minus collaborative, who you'll hear from later today, For example, has assisted more than 1500 residents to save and invest in over $32 million dollars in Holmes educations, small businesses and rainy day funds people with low income can and will save and invest in assets that makes long term changes in their economic stability and future growth. This legislation would apply a proven tool to help families recover from COVID-19 pandemic permanently escaped poverty and lessen the wealth care for these reasons. I urge the committee to favorably report out this important piece of legislation. I thank you for your service to hardworking families across the commonwealth1854 and I look forward to answering any questions you might have. Thank you.
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Okay, thank you Representative, we appreciate your testimony. Any questions from members of the committee.
Uh, seeing none. Thank you again. Thank you. I'm gonna try one more time for uh, Representative O'Day and Senator Heinz either of you here.
All right. Moving on. I believe we have a panel uh with state Representative Lipper-Garabedian Is is that correct?
[REP LIPPER-GARABEDIAN:] [HB1146] Yes, thank you so much. Sure. So good morning. Honourable chairs, Credit and Murphy and members of the committee. I join you today with Brett kirkpatrick of harbour mortgage solution emissions and jennifer Costantini of Cambridge credit. To ask for your favorable review of H 1146 Enact expanding the use of video and telephone conferencing. The bill would amend our laws to permit seniors who are required to engage in counselling before they take on reverse mortgages to do so via synchronous real time video conference or by telephone In addition to in person massachusetts has been1922 the only state in the country that has required in person counseling. The only state meanwhile we have allowed reversed mortgage counseling to occur by synchronous real time video conference or by telephone throughout the Covid 19 State of emergency and ongoing pandemic including through an extension that we enacted this june I join you today as a member of this committee and1943 as the sponsor of H 1146 via synchronous videoconference. I trust you can and1948 see and hear me clearly And this mode of communication provides a safe convenient option for the1953 exchange of information and dialogue. I also have joined you over the telephone to participate1958 in formal sessions and take votes.
We've established these protocols to be responsive to the health risks posed by COVID-19 and our experience demonstrates that technology can be effective and under taking the business at hand. This dynamic is the same for the required for reverse mortgages. You will hear today from the panel about the experience of conducting counselling sessions via video and phone. Codifying this approach in our general laws makes good sense for seniors as we continue to live in the midst of a pandemic that at some point the disease with at some point disease transitioning from a pandemic to endemic. Many seniors understandably will want to continue to limit exposure and undertake certain activities and distanced approaches. Others may have mobility issues or may not have access to transportation, updating our laws and reverse mortgage counseling to align with the 49 other states legal2005 frameworks and federal regulations and guidance evidence is appropriate at this time. I'll now turn it over to the other panelists to speak to the merits of the bill. Thank SHOW NON-ESSENTIAL DIALOGUE
and I hope they're here. Yeah, it's a jennifer or Brett available to speak
Just a mute yourself please.
I know that they've also um submitted some written testimony to the committee. So perhaps they have been delayed and joining today but we'll be on later. Yeah. Yeah. We can see them on their representative. I don't know if there's issues with the audio.2056 Um, so maybe we'll circle back. So just one last time I guess jennifer Constantini or Brett kirkpatrick. I would like to testify as part of this piano please. Are you available bread kirkpatrick is here. Thank you the floor is yours? Breath.
[BRETT KIRKPATRICK:] Thank you. Senator Crighton and thank you Chair Murphy Thank you for the opportunity to speak in support of relieving an unnecessary burden and expense on massachusetts. Seniors seeking information on a mortgage program that is federally related regulated by hud is ensured by the to and his further regulated in massachusetts by the commissioner of the division of banks for over 30 years since the home equity conversion mortgage program, acronym heck um H E C M.
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But I'm sorry, can you hear me? They can't.
Yes, they can. Thank you.
Ronald Reagan implemented this demonstration program over 30 years ago. He assigned it to the F H. A. And to hud from the very beginning, mandatory third party independent counselling
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is not connecting. You're searching for you. Uh, we're gonna little feedback there folks could just mute their microphones please so we can hear those that are testifying great. You can go ahead and continue testimony. We can hear you just let you can hear me thank you.
Oh, From the very beginning, mandatory independent 3rd Party counseling has been a foundational principle, an indispensable consumer protection, fully embraced alike by borrowers, by lenders, by regulators, by legislators and by2164 senior advocates for the first decade of the program. The AARP who are instrumental in its creation continued its commitment to a public private partnership by training the councillors when the pilot program became permanent, the council training was brought fully in house by hud Elevated with a2184 new 120 page counseling protocol, mandate classroom hours for councillors and exam testing leading to a newly required certificate program to approve Henken counselors. Not incidentally this required certification was2202 so successful that had gradually expanded it to include all aspects of their credit and housing counseling mission. First time home buyers, bankruptcy, debt management, credit counseling, et cetera. All senior homeowners must pay for and participate in a counseling session prior to applying for an F. H. A reverse mortgage or a heck. Um Counselling sessions generally last from 60 to 90 minutes.
They must cover core principles must include a financial assessment of their household expenses must include information on other non mortgage assistance programs such as in massachusetts, real estate tax2244 deferment, home heating assistance, forgivable, low2248 interest rehab loans, etcetera. And it also includes a counselor assessment of the clients comprehension of the basic material counsellors cannot issue accounting certificate if the client cannot demonstrate comprehension2263 of the court principles. Over 40% of all seniors in Massachusetts receiving a counselling certificate, never reply or never qualify for an F. H. A heck. Um So you see this is not a rubber stamp formality. This is not an intense but a comprehensive discussion of their situation as well as the pros and cons of the program. The Hunt counseling protocol requires that every client be given the option of telephone or in person counseling. In 49 states
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we're just going to try to because we have so many folks testified. I'm going to try to be strict with the three minute limit and I know we started off a little slow there. But if you don't mind just wrapping up in a sentence to,
I'll defer to jennifer and I'll submit written testimony. Thank you for the opportunity.
[JENNIFER COSENTINI:] Thank you. I'll make this brief just to piggyback off what Brett said. The counseling is extremely thorough. Um And as a counselor, I've been doing reverse mortgage counseling for over 112336 years. I believe every senior should have easy access to counselling. Um and with Massachusetts being the only state that does require in person, This is an undue burden to our seniors. We pulled them during COVID and over 70% of our Massachusetts clients would have to travel over 30 miles just to get2357 to us. Um And also during covid we have been able to help over 400 Massachusetts residents with counselling just in 2021 alone. Um prior years during face to face, we would average about 60 mass clients a year because they couldn't get to us or we couldn't get to them. Um, so that's all I wanted to say. Thank you.
Thank you. Uh any any questions from members of the committee to the panel
seeing none. Thank you again. Representative and members of the piano. We appreciate your work on this issue and your testimony here today. I'd like2397 to welcome state center Adam Heinz testified.
[SEN HINDS:] [SB682] [SB665]Yeah, thank you. Mr Chairman, members of the committee. I appreciate you taking me out of order. I'd like to speak today on S 682 an act establishing a public bank of massachusetts. Um and I'd like to also register my support for a similar bill. S 665 filed by my colleague Senator Eldridge. Um while the uh, maybe the differences in how the banks are funded uh may may alter between the two bills, the underlying motivation is the same. Um And and so the intention of this, this bill is to create a state owned bank to invest in projects for the public good without the need to maximize profits for shareholders and making it therefore easier for cities and towns and underbanked populations and the commonwealth to acquire capital for vital projects. Um This is this kind of financing is, is useful under all circumstances, but it has been especially critical and we've seen the value of it as we try to recover from covid 19.
Um and we have2464 seen the need for more significant investments in broadband and tele health and child care and other sectors. And this would be a way to reduce the obstacles to investment and innovation in these critical areas. Um There are also significant inequities in massachusetts with regard to both wealth and access to capital and the creation of a public bank would be a key step to remedying this. We saw flaws in our banking system at the start of2487 covid, particularly when we2489 are navigating the P. P. P. Program, which revealed that in far too many cases there's a, an absence of a strong relationship between local banks and entrepreneurial color and businesses owned by people of color. And so a public bank could provide services at reasonable costs and deliberately target under bank underbanked populations. Um It goes beyond that as well in indirectly investing in neighborhoods that have historically seen under investment by the, the state and the private sector.
Um So one thing that my bill does is we we try to primarily funded through the issuance of bonds rather than operational funds in in multiple budget, which would separate the funds needed to operate the bank from the state's annual revenue picture. Um and and creating some reliability there, but I have to note that we have significant revenue in front of us and we're in the middle of determining how to allocate that and that is a really once in a generation, even more opportunity to see such a public bank. Um, and we should view it as that. So I'll just close by saying that, you know, now is2554 the time for major investments in so many areas, including green infrastructure and affordable housing and schools and uh and and uh and and the like and the creation of the State bank would facilitate many of those investments across the commonwealth. So really it is an optimal time to to take this proposal seriously. So thank you for your SHOW NON-ESSENTIAL DIALOGUE
Thank you senator. We appreciate your testimony working this issue. Any questions from members of the committee.
Any questions from members of the committee.
2589 Seeing2589 none. Thank you again. Senator for your testimony. I'd2593 like to welcome uh Division Chiefs of the Consumer Protection Division of the Attorney General's office, Shannon cavanaugh along with a panel.
[SHANNON KAVANAGH (MA ASSISTANT AG CPD):] [HB1168] [SB663] Thank you. Chairman, Crighton Chairman. Murphy and members of the committee for the opportunity to testify today. My name is Shannon cavanaugh and I'm the acting chief of the Consumer Protection Division in the office of the Attorney General. Maura healey. I am here today to express the Attorney General support for the debt collection fairness Act. Senate 663 and House 1168 filed by Senator Eldridge. And Representatives Win and Barber protecting the economic security of massachusetts families is a core priority of the Attorney general addressing unlawful and2643 unscrupulous collection practices2644 is an essential component of this effort2647 through which the Attorney General's office has identified a number of troubling patterns within the debt collection2655 industry. Professional debt collectors to thousands of massachusetts consumers each year based on inaccurate unverified or incomplete documentation about the debt they abuse the judicial process to coerce consumers into paying debts that they have no legal obligation to pay each year.
Thousands of consumers are the target of civil copyist arrest warrants obtained by debt collectors, causing some terrified consumers to pay debts. They do not go to avoid being physically arrested and taken into court and we know that these practices disproportionately affect communities of color who are already economically disadvantaged. The debt Collection Fairness Act would prevent stale and inaccurate claims from being filed in our court system by requiring the collection lawsuits be brought within a reasonable four year statute of limitations, period collectors would be prohibited from reviving time barred debts by coursing consumers into making nominal payments that leave them trapped in a debt cycle. They will never be able2715 to repay. It would prevent abuse of the judicial process by limiting the circumstances in which debt collectors may seek KPs or work KPs arrest warrants rather than automatic issuance of the Capias. The act would give consumers the option of submitting a financial affidavit in lieu of appearing in court for a payment review hearing critically.
The act modernizes our state's wage garnishment laws to protect working families who are increasingly squeezed by the high cost of living in massachusetts by lowering the amount of wages subject to garnishment. This is essential to ensure families have enough money to meet their2755 basic needs, such2756 as food housing and transportation. Currently, families whose gross income is more than a mere 35,100 per year can save hundreds or even thousands can have hundreds or even thousands of dollars taken out of each paycheck passing this act will help break the cycle of indebtedness and poverty that traps too many consumers and provide provide needed relief for massachusetts families. It will promote economic and racial justice because its provisions address issues face predominantly by low income communities and communities of color. We urge the committee to report the bill out favorably and again, thank you for your time and for taking me out of turn today, we're happy to answer any questions you may have.2802 SHOW NON-ESSENTIAL DIALOGUE
Thank you chief uh what other members of the panel like to testify? They just here for questions.
Thank you. Mr Chairman. We are just here for questions. Okay, great. Any questions from members of the committee?
I see representative Kerans has a question Representative, the floor is yours.
[KERANS:] But thank you very much. Can you give a little more detail on how extensively these, these uh debt collectors, you know?
[KAVANAGH:] Well there their weapons and and kind of get people into this, the warrants in particular and how they are, how widespread of practices that Yes. So we have seen instances where various players in the debt collection industry have sued thousands or tens of thousands or sometimes have even filed hundreds of thousands of lawsuits against consumers. So suing consumers on debts is a frequent occasion. What happens after the debt collectors? Sewa consumer If the consumer does not appear in court, then the court will enter a default judgment. That essentially says the consumer owes whatever the amount of the debt that the debt collector claimed is owed.
Following that if a debt collector wishes to collect upon that judgement, then it sues the consumer again and the sumer the consumer is required to go into court for what's called a supplementary process hearing. If the consumer fails to2905 appear at that hearing, then a civil KPs arrest warrant issues automatically under the current law so that the debt collector can go and arrest a consumer at their home to force them to go2918 into court for the hearing. Um What this bill would do is in lieu of having a KPs arrest warrant issued. If a consumer doesn't appear at the supplementary process hearing, it would give the Consumer an option instead to submit a financial affidavit to give the court an opportunity to evaluate the consumer's ability to pay before the consumer is arrested and forced into court for a supplementary process hearing. SHOW NON-ESSENTIAL DIALOGUE
Wow, thank you very enlightening. Thank you. You're welcome.
Thank you. Representative. Any any other questions from members of the committee.
Thank you to the panel. We appreciate your testimony.
Mhm. I'd like to welcome Michel Besse and Gail Sokoloff for part of the panel.
Mhm. Mhm. The
[MICHAEL BEST (NATIONAL CONSUMER LAW CENTER):] [HB1168] [SB663] I guess I'll start then. Good afternoon, honourable Members of the Joint Financial Services Committee. My name2988 is Michael Best and I'm a staff attorney2990 at the National Consumer Law2991 Center where I worked on state debt collection issues like those addressed by s 663 H 11 68. An act, relative fairness and debt collection or the debt collection Fairness act. It has been filed this session by Senator Jamie Eldridge and rep strong, Nguyen and Christine Barber And3004 before you today I want to thank the committee for the opportunity to testify and thanks chair Murphy in particular for all the work he and his staff have done on the DCF A and for bringing advocates and the debt collection industry together to discuss the bill. I know there are a lot of bills to get through so I'll make brief comments now and follow up with a more detailed written testimony on the reforms that DCF will make first.
Let me frame where the ePA is needed now more than ever and talk about some of the most important reforms in the bill for massachusetts families As of December 202019% of Bay Staters have a debt in collections In Massachusetts communities of colour. The percentages 35% and goes as high as 46% in Hampton County. These numbers represent real families struggling to keep food on the table and roofs over their Children's heads Current Massachusetts law does not make it easy for people to do that with 12% interest on judgments, the highest rate3050 in the nation and only $675 in wages protected before debt collectors can start 15% of a worker's wages. No working families can afford a 15% pay cut and sew garnishing means that another bill like food rent or medical care isn't being paid, pushing families into crisis with the economic fallout from the pandemic still settling, we believe there will be a tsunami of debts going into collection and that those with the least who have been impacted the most by3075 the pandemic will once again be asked to pay by debt buyers and collectors.
Some debt buyers saw record profits at the height of the pandemic enabled by the influx of consumer relief3084 in the form of stimulus checks, enhanced unemployment benefits and halted evictions, foreclosures and student3089 loan payments. Is that relief drive up the debt collection will continue. But massachusetts, families don't have the relief to rely on and we pushed to the economic brink and is still tumultuous economy. I think it's important remember that none of the reforms in the DCF to remove any tools and the debt collectors toolkit, it just make sure that ordinary working folks have enough to survive while they pay back their debts. The debt has an end date and doesn't continue on forever or even grow because of high interest rates and long statute of limitations Among the DCF reforms are an increase of wages protected from garnishment from the current 675 a week to 945 per week and increasing the interest rate on judgments from 12% to 6%.
This is an economic development bill because it helps make sure families campaign to their communities for basic needs like rent and groceries while paying back their debts. This is a racial justice bill because a disproportionate number of people in communities of color are impacted by debts and collection. The DCF has passed the Senate several times and the current text of the DCF a is the result of significant compromise by advocates. This is a vetted bill that will help the most vulnerable families in massachusetts in a time of great economic uncertainty. It is for these reasons that the bill has wide support from advocacy groups as well as a longtime support as we just heard of the Attorney General's office. We respectfully ask for a swift and favor report of the committee. Thank you so much.
SHOW NON-ESSENTIAL DIALOGUE
Thank you, Michael.
Yeah, but you also on thank So the issues on next up. I'd like to excuse me. Any questions from members of the committee?
Seeing none. Thank you again, Michael, I'd like to call john Scanlon to testify.
[JOHN SCANLON (MMBA):] [HB1052] Thank you. Mr Chairman, can you hear me okay? Yes, I can. Thank you. Okay. Great Chairman, Crighton Chairman Murphy um John Scanlon Executive Vice President of Massachusetts Bankers Association, appreciate the opportunity to come testify this morning. We're going to be submitting extensive written testimony on more than 20 of the bills before you this morning. So I'll try to keep my comments relatively brief and just touch on a few, a few key issues in a number of bills that are on today's agenda. First, I did want to highlight House 1052 which is a bill filed by Representative Cahill This is a bill, the versions of which we filed in several sessions that makes updates and technical changes of the banking laws. I did want to point out that there are a couple provisions in there that are directly related to the pandemic and kind of some of the pandemic related issues. One in particular would allow the uh thanks to hold a virtual annual meeting.
Uh that was an issue throughout last year that we worked with the division of banks on, but it would be good to have a statutory provision. Um yeah, we we do appreciate all of the work that Chairman Murphy and members of this committee put in last session on the credit union modernization bill, that also included several of our provisions. Uh You know, we were, we were disappointed but not surprised that some of the provisions that ultimately were rejected from that bill were refiled a session, particularly those governing merger and acquisition authority for credit3287 unions as well as public deposits. Again, we will be submitting a very extensive written testimony on all those issues uh In addition are bill um that we have filed in previous sessions by Representative Moran that enhances the corporate governance and mission of the credit union industry, happy to talk with you about that as well as as the legislation progresses through through the process.
Um, I did want to also note and I know there's been a lot of discussion already on the public bank issue and I did, I did just want to kind of reiterate our opposition to all three of the public bank bills that are before the committee this morning. Um you know, we have raised concerns with these over a number of years, as many of, you know, there was a commission to study a state bank here in massachusetts uh several years ago that held extensive hearings throughout the state collected testimony and issued a report that basically found that a state bank would be extremely expensive and put public funds here in massachusetts at risk. Um, we do believe that there are, you know, we're lucky in massachusetts that we have a wide array of existing uh public private and quasi public organizations and initiatives to hopefully provide financing to businesses throughout the commonwealth. And we would just strongly urge the committee to look to those to enhancing those initiatives and providing additional3387 resources before moving forward with any type of public bank legislation. So I see my time is up again, appreciate the opportunity and happy to answer any questions. SHOW NON-ESSENTIAL DIALOGUE
Thank you, john, we appreciate your testimony and for addressing all those bills in just three minutes. We appreciate it. Any questions from members of the committee Representative carats.
[REP KERANS:] Thank you. Mr Chairman. Uh this is quickly um I'm just taking advantage of presence here to get this information, which I kind of thought about off and on through the pandemic. Um what percentage of banks across the various sectors, savings um commercial, what have you uh took P. P. P. Loans? Sorry, maybe pp loans.
[SCANLON:]3447 I don't know exactly at the top of my head representative, but I would say that the vast majority of our members Did make paycheck protection loans during the pandemic. We have about 120 banks Um here in Massachusetts. I would my guess is at least 80, of them. We're engaged in P. P. P lending throughout that throughout that process. SHOW NON-ESSENTIAL DIALOGUE
Thank you.
Thank you Representative. Any other questions from members of the committee
seeing none. Thank3482 you again for your testimony. I'd like to know. Thank you. You're welcome. Like to now welcome a panel led with mayor. Credit Tony uh Alex Morris Mayor. Giannino welcome
Mr Mayor. I believe you're muted.
[JOE CURTONE:] [HR1223] [SB682] [SB665] Um I'm sorry you would think I know how to do this by my apologies and thank you for allowing us myself and Alex Morris to testify. Chairman Crighton and Chairman. Murphy and members of the Joint3524 Committee on Financial services. Thank you for taking me out of order and giving us actually the opportunity to make a statement. I'm here to express my support for the proposal to establish a public bank set forth in H 1223 which was filed by reps Connolly Delgado and Senate Bill 655 filed by Senator Jamie Eldridge and Senate Bill 682 filed by Senator Heinz. This is an important and timely opportunity The Metropolitan Years coalition, which are the 15 communities in the in the court of Metro Boston region, which I chair supports this legislation. And as municipal leaders, we are looking to address many significant challenges facing our communities and to ensure that our public dollars, taxpayer dollars reflect the public needs and values. I hope as we learned many things from the pandemic. We we saw something that was pretty painfully clear that the glaring spotlight on how the whole system is broken the inequities across the spectrum. It laid beer and exploited existing societal inequities as we continue to respond to the impacts of COVID-19 and the work to advance an equitable recovery.
We must be intentional in our efforts to break down barriers and build up, support our small businesses and entrepreneurs boost our local economy and culture and they need access to resources, especially as they work to get back on their feet. And some of them, we made 382 covid relief awards to some of our based small businesses. Totalling over $4 million. This is our own direct funding to businesses and their employees, including 142 awards to women owned businesses and 136 awards to minority and by park on business. I will tell you in3617 many cases, the current bacon system, which I meant to support so many about still some locally operated banks and local banks. They would not even take an opportunity when the city would back stop any loans to as many people. P loans they made to support those businesses. Because in their own words, it wasn't worth the risk. We are proud to support our small businesses and community, but we recognize that it's not enough.
Some of those Covid relief program is just one example of the enormous need that these underserved businesses and residents uh have a have a demand for and have a need and having access for capital. We need fear3651 and sustainable economic growth, which means we need to address structural inequities in our current bacon system to ensure capital and financial assistance available to historically marginalized business owners and residents, including women, people of colour. Indigenous entrepreneurs. A public bank is critical in this effort. Public bank would work in cooperation not in competition with massachusetts committee banks furthermore, public bank can provide loans at lower interest rates as we know in service another way for municipalities to borrow money and then affordable, flexible alternative to the bond market for infrastructure projects.
So as municipalities make investments in areas of energy and greenhouse gas uh and other crucial areas of infrastructure and then to support main street community development institutions and land trust and local ag we need inventive financing now more and now more than ever we need to be creative and we need to be flexible and equipped with the right tools to address unprecedented challenges and we need bold action. So we should see this opportunity to invest in a public bank that will reinvest in our communities and this has worked and does work in their models about it. We know that, so to say, we need to continue to study it, which we continue. We need to measure in its outcomes. The stages put into a study is just going to protect the same system which does not serve and anyway an inequitable way the entire population of our commonwealth. So I strongly encourage the legislature to advance these bills. So thanks again for the opportunity to testify and following3731 Alex morse's testimony. Be happy to answer any questions.
SHOW NON-ESSENTIAL DIALOGUE
Thank you Mr Mayor. I I don't believe that uh Alex is with us today. So when asked the committee if there are any questions for the mayor,
seeing none. Thank you again for your testimony and your work on this issue. Thank you very much to all of you. Welcome. I'd like to now welcome Roger burgling and Allison kroner as part of the panel,
[RODGER BERTLING:] [SB663] [HB1168] Thank you Mr Chairman, Thank you Jared Murphy and Crighton My name is Roger burgling. I'm here to testify in favor of Senate 663 House 1168 The Debt collection Fairness Act. I am the director3776 of the Consumer Protection Clinic at Harvard Law School and I and my students are in court every week representing low and middle income massachusetts. Residents who have been sued by debt buyers and other to try to collect consumer debts. This bill is a very important uh upgrade from what our present situation is for consumers who are being sued for consumer debt. First off, the current statute of limitations on these issues is six years, which is the general contractor statue of limitations in massachusetts for consumer debts. Our clients move around a lot. They don't keep great records long term and there are very hamstrung by only having six years to be able to put up or to have six years to be able to put up a defence. This bill would bring the statue of limitations in line with the 93 a statute of limitations. Secondly, the 12% are interest rate is the highest in the country as was spotlighted earlier.
Every other state that has examined this interest issue has lowered the rate over the last several years. And what that 12% means is that every six years judgment entered against the Massachusetts. Consumer doubles in amount you have to take into account that a lot of our clients didn't know they get sued in the first place or got sued by somebody they didn't know anything about and we're defaulted and the first3853 time they hear about, they hear about this debt is when several years have gone by and someone else has bought the debt and is trying to collect from them by bringing them into court. And by that point in time the judgment has already doubled or sometimes tripled. Uh, and it makes it much harder for them to make any kind of arrangement to pay that debt back. At the time. This bill was that the 12% was put in place. The, The interest rate on mortgages in Massachusetts was roughly 14%. You know, interest rates now are a lot lower than that, but it is time than to think about lowering this interest rate down to the 6% that this bill calls for. Also changing the amount of income that can be garnished is that it would be3892 a huge improvement, particularly in particular in a place like Massachusetts, which is expensive right now. Anyone who earns $34,000 or more is subject to garnishment.
Our bill would raise that number up to about 49,000 and keep in mind that the median income in Massachusetts for a single person is roughly $72,000. We're not protecting rich people here. We are seeking to protect low and middle income, working families in Massachusetts. Um, lastly, I just want to talk about3919 the KPs warrant issue. I think somebody had asked from the committee, how often does this happen? I've gone to small claims court and several times where the entire courtroom is full of people who have been brought into court under KPs warrant or under a threat of a Capias warrant. This happens a lot and it is a huge problem for our clients because they pay bills that they wouldn't otherwise have to pay because they're afraid of being arrested. I see my time is up and I will hand it over to Allison and if you have any questions, please let me know. Thank you. SHOW NON-ESSENTIAL DIALOGUE
Thank you Roger. I don't know if if Allison is not Alison you there.
I don't think she was able to make it so that the committee have any questions for Roger. Uh Representative Karen,
[KERANS:] thank you mr Chairman quickly. Um, how does a consumer no. How do they find their way to you?
[BERTLING:] We get we are located in Jamaica Plain and have been there for a very long period of time and we get a lot of referrals from people in the community. We could referrals from the courts, somebody who showed up and doesn't know what's going on in their case. The courts will refer them to us. We get referrals from the voluntary lawyers project. We have a very strong, voluntary largest project here in massachusetts. We give referrals from other legal services agencies and often word of mouth in the community. So we have no no dearth of clients particularly as we're coming out of the pandemic and I think we're coming out of the pandemic there this issue is incredibly widespread. If you go to court on collection day you will see dozens of people having this issue, having these issues in terms of debt collection. Thank you.
SHOW NON-ESSENTIAL DIALOGUE
Glad you're out there. Thank you. Mr Thank you representative
no more questions. Thank you. Rogers for your testimony. Thank you. Mr Chairman. I'd like to now welcome median Cohen Julia. Gonzalez Daniel cadet. It's part of4040 the panel.
[NADINE COHEN (GLBS):] Good afternoon um chairs, Murphy and Crighton My name is Nadine Cohen and I am the managing attorney of the consumer rights unit at greater boston legal services. I am here today to urge you to4061 report the4062 debt collection fairness act out favorably. I think it's important for the committee to hear directly from the consumers who are most impacted by debt collection cases and I have here today with me two of our clients Julia. Gonzalez and Donya Cadet who have experienced debt collection abuses,4091 wage garnishment, high interest rates and threats of imprisonment. Another client john nelson could not be here due to medical issues and I would like to be able to read his testimony. I would now like to have Julia Gonzalez testify
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Julia. Are you here?
This is going to be challenging. Um
now
we don't see her on the list of folks4130 that are on right now. Was there also a daniel cadet joining us? Yes I believe Miss cadet is here. Can you uh speak up Dania.
Yeah, yeah. Good morning, my name is Daniel cadet.
Good morning the floor is yours? Sena
You can hear you. Can you hear there? Mhm Yes, go ahead, we can hear you. Thank you. Right
you can feel free to testify now Dania.
[DANYA CADET:] Okay my name is Daniel cadet. I'm living on one 69 earlier street in Milton massachusetts. 1 2nd. My phone Lee give me a hard time please taking the time to worry. Yes okay. Yeah my wages Garnish falling adam you know sorry for my english you know before I am a adult debt I didn't know about the harm the initiation him a great you know at that time my languages asian creole. I work as under cesar at Brigham and women's hospital when they were the garnishment. My waist was 900 and weeks. I only bring 500 at home. That time was difficult for me. I can't even sleep at night. I was anxiety. I was depressed. Can you imagine bring $500 a home which is read everything so expensive. You know I never, this is our first time I was in that situation and then I have a debt. I have a daughter you know I recently fine well4262 being directed from my dad. I never opposed happy before the church you know him ham garnish.
I only get 500 a week, nothing of to my puppy my weight or the expensive, you know, this situation was too much for me, but thank God and then this is the case open dismissed by George Queensland center and then they put it back, you know, I didn't even know about it, but thank God for legal services, Nguyen legal services when I find them there was help me for now I could say I feel better. I sleep at night. I am anxiety anymore. I'm not too depressed anymore. This is die. So I have to thank you4312 so much. Please. I hope no one4315 else goes what I go to because that wasn't easy for me. You know, this is only one there, I hope everything changed, you know, because it was too much. They're not even tell me just get the money from my pay stop, you know, that was to difficult for me for now. Since last september I think now I feel different person right now. I wouldn't even think about too much. I sleep at night and then I eat my Israeli goes down, my depressed goes down thank you so much. I hope I want to support that garnish thing. Thank you.
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Thank you Danny. We appreciate your testimony and also sharing your personal stories and I want to just say on behalf of the committee to all the focus on the call right now. We understand how challenging some of these technology issues can be. We appreciate all of your patients and look forward to having you back in the building one day soon. But we appreciate you taking the time and effort to join us here today. Any questions from members of the committee?
No, no question. Having seen uh, sorry Mr Chairman, would it be possible for me to at least read the testimony of Mr nelson who couldn't be here because of some medical issues?
[COHEN:] Yes, I just asked you keep it to the three minutes. Yes, I will do that. Uh, my name is John Nelson. I live at 47 Carver Street in Weymouth and I am a constituent of Rep Murphy I am 60 years old and I receive disability benefits. I am supporting the debt collection fairness bill. And I urge you to pass this bill in July 2020. I received a letter from a company I never heard of Judgment acquisitions, unlimited stating I owed over $12,000 on an old debt because of a judgment in Brockton District Court. The letter confused me because I did not recognize anything about the supposed debt of mine and I knew nothing about the Brockton District Court case. The letter also frightened4462 me greatly. It threatened me with civil arrests seizure of my automobile wage attachment. Bank account attachment and property leans. I knew my federal disability benefits were protected from debt collection and I own no property but4483 the other threats uh, extremely worried me because I was concerned my bank account with very limited funds would be seized and I would be unable to pay my rent or other bills.
I was also terrified that my car would be taken without my knowledge during the night. Finally I was worried I would be arrested for this death that I knew nothing about. I had severe insomnia and was unable to sleep as a result of all this anxiety, I then began receiving threatening and harassing phone calls from debt collectors. I explained my situation but they kept calling um, I received another letter again threatening me, I was very lucky to get greater boston legal services and they were able to help me and get the debt dismissed. I strongly urge you to pass the debt collection fairness act and um uh mr chairman if I may submit some of the written testimony from these clients, I have another story from this Gonzalez who was I guess unable technologically to be here and I will also submit testimony on behalf of greater boston legal services. Thank you
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Yes, please submit that testimony. We appreciate your time here today. Thank you welcome tomorrow you didn't from Boncore capital Right, thank you so much.
[SB663] [HB1168] Can everyone hear me Okay yes, Lawn and claire thank you. Wonderful thank you O'Day Chairman Crighton and Murphy Vice Chairman Moore and Ayers and members of the committee. My name is Tamara you can find and I'm testifying on behalf of Boncore capital group regarding Senate bill 663 and House bill 11 68. These bills would make sweeping changes to the collection of delinquent debt and we have far reaching unintended long term consequences to the very consumers this legislation is trying to protect. Now, I want to make clear, first off, our opposition is limited, but it's very significant. We absolutely support the copyist changes. A debtor should never be jailed for owing the financial debt and our company has certainly not sought um any sort of imprisonment for a consumer since, since we came into existence many years ago, I think that it's a rarity in the industry from everything I understand as for reducing the interest rate. We support that as well. Um, and that's something that we are fully on board with. But what I'd really like to clarify today is what previous proponents of the bill is referenced. Some have referenced on wage garnishment. They mentioned that the bill changes the wage garnishment formula, but they haven't gone into the specifics and I'd like to do that a little bit today.
Now massachusetts already has one of these strictest wage garnishment laws in the country With a 15% wage garnishment rate permitted for debtors earning $46,000 or more per year, which is about the median per capita income in the state. Now in the proposed legislation, Massachusetts would effectively ban wage garnishment4692 for anyone earning up to4696 $54,600 in individual not household income regardless of the debtor's need or ability to repay the debt Above $55,000 an individual income. The legislation would allow very small amounts of wages to be garnished for a debtor earning $55,000. It would take a creditor over 38 years to recover a typical $2,000 judgment For a debtor earning $100,000 a year.4724 Again, an individual, not household income, the wage garnishment rate would only be 5%. Now, please keep in mind that while massachusetts already has one of the most progressive wage garnishment laws today,4737 other progressive states that recently overhauled their wage garnishment laws, colorado Washington California and Maryland overhauled their laws to still be less restrictive than the current law. In massachusetts. The National Consumer Law Center even recently gave massachusetts wage garnishment law A B grade.
Only four states received an A grade and those four states outright ban wage garnishment, but in those four states bank levies are rampantly used instead as a way to collect on a court order judgement, whereas in massachusetts, bank levies are highly restrictive and the end result is that uh multiple studies. Um, and we need to talk more4779 about this in our written testimony, demonstrate that legislation restricting creditor's ability to recover an outstanding debt. Ultimately reduce and reduce access to credit. Um, I wanted to touch on the statue of limitations issue too. But I ran out of time. It's addressed thoroughly in our written testimony. Um, and just to quickly conclude, we have no doubt that these bills are very well intended, but the far reaching results would be quite harmful in the end for consumers and creditors alike in the commonwealth. So I asked the committee to please vote no on these proposals. Thank you for your time today. I'd be happy to answer any questions you might have.
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Yeah, thank you for your testimony. Any questions from members of the4822 committee?
Okay, thank you. Thank you. I'd like to welcome Gail Sokoloff. That's fine.
[SB663] [H1168] Thank you. Chair Crighton chair, Murphy and committee members. My name is Gail Sokoloff and I'm the vice president of strategic partnerships at the United Way of massachusetts bay and Merrimack Valley. On behalf of the United Way. I urge you to support to report S 6 63 an 8 11 68. The debt collection fairness act favorably out of committee. I also want to commend representative win and Senator Eldridge for their leadership in filing this important bill. Since the beginning of the COVID-19 crisis. The United the United Way has played a4879 leading role in mobilizing the region's community response to ensure that our most vulnerable neighbors, have the resources they need to whether the economic impact of the pandemic for some, the loss of work and income has pushed them further into a downward cycle of debt and financial instability
Even before the pandemic, the current debt collection system was particularly harmful to individuals. Individuals with low income and communities of colour. Research by the Boston Federal Reserve found that about one in three residents in Springfield had a debt in collections compared to 5% in Newton. Consumer protections like those proposed by the to are a powerful tool to drive an equitable recovery. Importantly, the bill would help advance economic housing and racial justice by empowering residents of colour who are disproportionately impacted by consumer debt and pandemic related hardships to achieve financial security. High interest rates on judgments caused debts to grow exponentially deepening the racial wealth gap and pushing residents further into poverty in order to stem the tide of economic inequality. The Commonwealth must reduce its outdated interest rate from 12% to 6% as proposed by the DCF. A.
In addition, the DCFF proposal to reduce the time a collector can collect on a court judgment from 20 years to a much more reasonable 10 years, is a needed reform in the debt collection system. This reform is critical to ensure that massachusetts residents can move forward and get on a path toward economic stability. We urge you to advance the DCF a favorably out of committee and fight for the speedy passage of this bill, especially during this ongoing crisis. Workers wages should be protected from excessive garnishment and4995 no one should be frightened into making payments due to the threat of arrest. Thank you for your leadership in advancing equitable financial practices. We look forward to working with you5005 to help massachusetts residents whether the longstanding impact of this crisis, SHOW NON-ESSENTIAL DIALOGUE
Yeah, thank you for your testimony. Any questions from members of the committee
5020 seeing5020 none. Thank you again. Now, like to welcome Alison honor to testify.
[SB663] [H1168] Good afternoon Chair Crighton Murphy and committee members. My name is Alison Kroner Baron and I'm the director of boston builds credit on behalf of boston Bills. Credit. We urge you to report S 663 and H 1168 An act relative to fairness and debt collection favorably out of committee, boston builds credit a partnership between the United way of massachusetts bay. The boston mayor's office for financial empowerment and Lisk boston aims to close income and racial wealth gaps by improving financial health among low and moderate income Bostonians. Working with our network of 25 community and employer partners, we provide Boston residents with the tools needed to build a prime credit score. As you are aware, the COVID-19 crisis has exacerbated longstanding inequities in our region. As of December 2021 in five, Massachusetts residents had a debt and collection this rising to 35% in communities of colour.
While some forms of debt, such as mortgage or student loan can help people build wealth. Most types of debt are detrimental to asset building and can exacerbate economic and racial inequality. Financial coaches in our network report that debt is one of the biggest barriers to achieving financial stability. Debt collection has a particularly acute impact on residents and communities of color who have been systematically shut out from capitol lending and financing opportunities. Debt and credit are intrinsically connected, and high debt contributes to a downward cycle of credit access. By reducing the interest rate on judgments and protecting more wages from garnishment. The debt collection fairness Act will reduce the harm caused by current debt collection practices and help protect the financial stability of families. In this volatile time when a debt is sent to collection, it can lower credit score by as much as 100 points as individuals, credit score drops so too does their ability to access a mortgage, a small business loan, an apartment or other basic credit needs.
The score decrease can be costly. Research shows that some with someone with poor credit will incur up to $25,000 in increased interest in fees. Excuse me. $250,000 in increased interest in fees over a life time relative to someone with a prime score. This expense contributes to a person's overall financial5177 health and prevents them from building assets and well throughout a lifetime. As the commonwealth moves towards long term stability and recovery, we need to pass the debt collection fairness act, so debts don't drive families over an economic precipice. Please Advanced S 663 and H 1168, favorably out of committee and fight for the speedy passage of this legislation. Thank you for your time and consideration. Thank you Alison. We appreciate your testimony. Any questions from members of the committee SHOW NON-ESSENTIAL DIALOGUE
seeing none. Thank you again. I'd like to now welcome Khan are shown and molly Goodman. And so nina Finland and Simone. Simone Crawford5225 is part of the families
Khan Are you there? Yes. Would you like me to start? Yes please. The floor is yours.
[HB1099] All right, well thank you so much. The committee, my name is khan are shown and I'm the co founder and executive director of Break Time. Break Time is a boston based nonprofit working to5255 end McGonagle homelessness and I'm here today to speak on the house bill 1099. Um, one of the things that break down does in partnership with another nonprofit that might just collaborative that I'm in a second as we run a match savings program for young people experiencing experiencing homelessness. The way this works is well, young people in our program, Every dollar they save is matched in an individual development account so that they're leaving great time With over $1,000 in savings to put towards housing education and their long term economic security. House bill 1099 ensures that the commonwealth of massachusetts is investing in these types of programs. Um, 90% of the young people we work with at break time identifies bipac and 35% of LGBT plus, these are populations that are disproportionately affected by wealth inequality in populations that we all agree need more investment financially to be uplifted out of economic insecurity.
Uh, match as molly will get on in a bit. Match savings programs have been proven to be incredibly effective in bridging the racial wealth gap because they invest in folks ability to build assets and therefore obtain long term economic security. House Bill 1099 would provide a 4 to 1 match on savings that folks put into an individual development account. Um and this would allow the state to directly invest in the long term economic security of families and young people across the commonwealth on behalf of young adults experiencing homelessness and other young folks in5359 the state. I think it is a crucial importance that we make this investment in our young people because in order to prevent chronic homelessness and chronic economic insecurity, we need to invest early in the lives of these young people. The young adults I work with that great time, do not have family support. Many of them are transitioning out of foster care.
They do not have any sort of financial safety net. Many of them are 18 years old and expected to be able to afford a first months last month and security deposit with absolutely no money to start from. If we invest in match savings programs, we can help these young people get the money they need to reach a degree of economic security and we, as the commonwealth of massachusetts can be their financial safety net because others in their life have failed them. So I highly encourage the committee to report on this bill favorably. Um I'm a resident of Dorchester and I grew up in West brome s um I would be very proud of my state if they were to pass this bill, so thank you so much for your time and I'll pass it over to the next person on the panel. Thank you.
[SB662] [HB1099] I think the next person is probably me. Um My name is molly Goodman and I am the executive director of the minus collaborative. I want to thank chair Murphy chair, Crighton and the committee members for holding this hearing and allowing me to testify.5443 I'm here in support of the Senate bill 662 filed by Senator Jamie Eldridge and House bill 10 99 filed by rep carmen, Gentile and act relative to savings, enabling prosperity. The Midas collaborative is a statewide nonprofit network of community based organizations that are committed to helping low and moderate income families across the commonwealth to invest in their futures by building assets minus number organizations provide financial workshops, Homebuyer and homeowner education courses uh and one on one counselling covering issues such as credit building housing counseling, college financing and foreclosure prevention. Some of our members are had counselling agencies and many members also host sites um tax clinics in the community that assist eligible people to file their personal tax returns for free.
We know that match savings programs such as individual development accounts or ideas can effectively support savings and wealth building5502 for LME households and can help connect unbanked and underbanked people to mainstream financial services minus works with its members to provide incentives and support for participants to secure personal savings and gain the necessary financial skills to invest in first. Holmes small businesses and higher educations acquiring assets enables these households to stabilize their personal finances, contribute to their local economy and it adds the massachusetts tax base. Economic security cannot remain a privilege reserved for the wealthy. All working households should have sufficient income to pay5538 for necessities and still have enough left over to save for difficult times and build assets.
However, this is not the case for thousands of households across massachusetts. Uh even with full time work, low wage jobs rarely provide enough money to maintain economic security for families. Furthermore, overly strict eligibility criteria for public benefit programs can disincentivize savings. These barriers were identified in the report released by the asset Development Commission over a decade ago. Under this legislation that5570 we have nicknamed the Mass Invest Act for every $1 that participants save under the program, they would receive up to $4 from the Commonwealth. As a match, participants can use their savings for wealth building activities like buying a home, pursuing an education, starting a small business or advancing their occupational mobility. This funding can help households recover and rebuild after the historic financial devastation of COVID-19.
Most importantly, it will help those households build economic stability to feather whether a future financial crisis. Um my parents both moved to Massachusetts from out of state. They were able to purchase a home in Jamaica plain in 1978. That home gave my family economic security and allowed us to put down roots in5615 a thriving Boston neighborhood and the asset allowed my dad to build family development business. He still runs today with my brother. I spent much of my career assisting low and moderate income Bostonians to purchase and keep their homes despite having some of the best first time home buyer programs and loan products in the country. Massachusetts ranks 45th in the country for homeownership amongst households of color, an asset class where most americans hold their wealth. My descendants members have designed and administered successful match savings programs for over 20 years and funding and scaling these programs can help us to close the racial wealth gap. I encourage the committee to report this bill out favorably. It would be happy to provide any additional information you may need in regard to this issue. Thank you for your consideration.
Thank you for your time. I don't know if any of the other folks that were on the panel are now here that would like to testify. Mhm Yes, thank you for your thank you Chairman Crighton Chairman Murphy and members of the joint committee and on financial services. I am Anthony Newfoundland stash program manager and I'm honored to have the opportunity to present this testimony in support of House Bill 1099 and Senate bill 66 to an act relative to savings enabling prosperity filed by Senator Jamie Eldridge, Representative Carmen gentle, I was born and raised in boston and attended college in Norton. I served for many years and organizations in the work throughout the state. It as an adult in mother, I have been displaced from the city of boston because I cannot afford a one bedroom apartment, let alone a two bedroom home for my three year old son and I and communities I grew up in because rents and home prices are soaring. We can5717 greatly increase the chances for first time in first generation homebuyers in massachusetts by passing House bill 1099 and Senate bill 662 to assist participants in being able to receive match5729 savings and will allow larger down payments on their homes or savings for future assets. My organization Maha, the Massachusetts Affordable Housing Alliance has been in existence for over 36 years and in that time we have been laser focused on home ownership. Our mission is to educate and mobilize to increase affordable homeownership opportunities. Break down barriers facing first generation and first time home buyers and close the racial wealth and homeownership gaps. This mission is just as relevant today as it was with the passing of the Fair Housing Act. In 1968 we have 40,000 graduates from our5767 first time Homebuyer and homeownership classes. We have been instrumental in creating both the MHP one mortgage and one plus boston mortgage is in massachusetts to help low to moderate income home buyers secure affordable mortgage projects. Products with interest rate. Buy down these products have been helpful to more than 23001st time home buyers in the state, 60 60% of which are households of color. In 2000 and 19 we started a pilot program called stash saving toward affordable sustainable homeowner shop, a home ownership, a first generation match savings program since january of 2019, we have enrolled a total of 225 participants. This match savings R. D. A. Program has helped 20 participants purchased a home today, 97% of the particles participants are persons of color. As a funded partner of the boston Children's hospital collaboration for community health. We are able to launch this targeted race conscious initiative, massachusetts has one of the worst racial homeownership and wealth gaps in the nation with nearly 70% of white households owning. While just 35% of black latin X and asian household and homeowners. We need to be intentional about closing that gap in stash is playing a key role stash the only first generation homebuyers program in the country based here in the commonwealth of massachusetts has an opportunity to lead the nation in meeting the racial wealth gap by assisting low income families safe and purchased assets were targeting those without the bank of mom and dad. Those who do not have the generational advantage of having parents who own their own home. Once participants have met the program qualification requirements, attend educational seminars, their challenge to save 2000 of their own funds over a 12 month period, which will enable them to be qualified for an additional $2000 match towards the5883 purchase of their first home. We hope to increase the size of the match as we scale the program up beyond the pilot phase and reach more first generation home virus throughout the commonwealth. For these reasons. We urge the committee to favorably report out this important piece of legislation. Thank you for your service to hardworking families across the commonwealth. Yeah, thank you for your testimony and hard work on this issue. Any questions from members of the committee
seeing none. Thank you again to5911 the panel. Next I'd like to welcome dan matt law to testify.
Mhm
Durant are you available?
We're gonna move on to a panel. Um yeah, quite a few folks on this uh the Evan Samuel G brew, Cassidy infant keith, Mahoney Christine descend that of orient here. Anyone for the people want to kick us off please?
Yes, I'll kick us off. Uh Good afternoon. Thank you. Chairs Crighton and Murphy for the opportunity to testify today. Uh it's an honor to testify today in support of S 665 H 112 to 3. An act to establish a public bank in massachusetts on behalf of the boston Dykema project. I'm nina events in a medium is executive director um A Swahili for cooperative work and responsibility. We formed from a drive to respond to boston's notorious racial health and wealth divide by underwriting. Are people strength directly resourcing what we call our economy builders, our small businesses, our artists, our grassroots organizations, why? Uh so we formed in uh we started to form in 2014 uh small businesses, particularly those led by women and people of color or to boston's economy struggled to access the capital. They need to survive and thrive and to compete for both individual and institutional customers. Uh So I want to just highlight some of the need that existed then uh that has been exacerbated since. I do know we know this, but I do think it's beneficial just to highlight the some of the need. So according to the city of Boston 2016, small business6021 plan, small business lending in boston in 2014. Mirror national trends significantly lower than pre recession period with microloans experiencing the largest decline. This lower level of spending was concentrated in a few neighborhoods receiving fewer loans that expected in relation to the number of businesses in those areas. The city of boston identified capital gaps as particularly acute for businesses owned by people of color and women arising from fewer personal and friends and family assets, lack6049 of physical proximity to support organisations and capital providers, smaller or disconnected networks and discrimination by lenders. In the instance that people of color do acquire loans, higher interest rates as well as lower6060 loan amounts or equity investments are likely that decline of traditional lending provided opportunities for alternative and emerging sources of funding to Philips cap. The use of online lending is presumed but unknown and boston leading crowdfunding and had many alternatives and emerging funding sources. Yajima now among that number, Also mirroring a national trend, the use of credit cards with higher interest rates for business financing increased. 30% of Boston businesses use credit cards to finance their businesses. These opportunities brought with them additionally needs for support in addition to capital uh itself. However, even those services were unevenly distributed with very high concentrations of business support organisations uh in a few areas. Uh and in communities of color, there was an average of less than one business support, educate business support organisation per square mile furthermore, fewer than 10% of the explicitly serve women and minority entrepreneurs. Uh So these disparities in the distribution focus in service of the bs does not only impact the availability of capital and support related to capital to businesses owned by people of color and women, but also the availability of other resources and the support that accessing those resources require such as customers, workers, markets and relationships which is critical for small business growth. Uh and establishment,
thank you so much. Perfect timing.
Other folks in the penalty will speak. Great, thank you chairs Crighton and Murphy for the opportunity to testify today and through you, Good afternoon to the honourable members of this committee. My name is Samuel Gabriel and I'm the director of policy and public affairs at the Black Economic Council of massachusetts. I'm testifying today in strong support of age 12 to 3, an act to establish a massachusetts public bank. We are proud members of the massachusetts Public Banking coalition6172 and the Black Mass coalition. Two of our key statewide coalitions that are leading on this work. Beckmann was founded six years ago in response to the Federal Reserve Bank of boston's report the color of wealth in boston. This study found that the median net worth of a black family in Boston is $8. That's not a typo And6190 that of a6191 white family in Boston is $247,500.
Over 700 community leaders and entrepreneurs convened to establish Dykema to address the persistent structural problems that have allowed the racial wealth gap to continue. Our mission is to advance the economic well being of black businesses organizations and people in massachusetts through advocacy, business and leadership development and strategic partnerships. We represent6216 the interests of the 2500 black owned employer firms in massachusetts and the 25,000 black sole proprietors establishing a public bank is a central component to our policy agenda, precisely because lack of access to capital remains one of the most persistent challenges facing black entrepreneurs and black owned businesses. Racial discrimination is still a key determinant in capital access disparities in massachusetts and nationwide, the ongoing structural barriers that the financial industry and government have created over the centuries continue to prohibit black people and other people of color from accessing capital and obtaining favourable banking products. This redlining continues to have a devastating impact and well beyond entrepreneurship. Our members from boston to Great Barrington continue to share with us just how difficult it is for them to obtain financing. While there are many interventions to address the racial capital access gap. And while we have worked with private banks and C. D. FFS to meet some of these needs, we strongly believe that a public bank would be a key vehicle to substantially expand opportunities for capital. Were thrilled to share with you as you will hear today and receive in subsequent written communications that public banking has received the support of Treasurer Goldberg, M. A. P. C. The Environmental League of Massachusetts, the boston Foundation, the Metro Mayors coalition and many others6301 if we are truly committed to racial equity, particularly in this moment of covid 19 political unrest and financial uncertainty for small businesses. We must pause and listen to entrepreneurs of color here what they need and act on their wishes and equitable recovery for our commonwealth must include the creation of a public bank. We must envision a new normal together on behalf of our members. I respectfully ask that you report at 665 H 1233 favorably out of this committee as swiftly as possible. Thank you for your consideration.
Thank cereal.
Other folks in the panel feel free to speak up when you want. Yes. Hi um good afternoon. Thank you.6347 Chairs Crighton and Murphy for the opportunity to testify today. My name is6352 Kathy infant and I managed the Black Mass coalition and I'm here to testify today in strong support of an act to establish the massachusetts public bank. The Black Mass coalition is a statewide coalition made up of over 15 black and indigenous led organizations that was convened last year directly following the murder of George Floyd and as a response to the subsequent calls for tangible actions and um commitments in honor6376 of the Black Lives Matter movement. Our collective work centres on advocacy and accountability around a set of 20 racial equity and justice oriented targets. One of those targets is for the state government calling for the establishment of a public6390 bank because we see it as a vehicle and addressing economic inequality by creating a structural solution to addressing the racial wealth gap. Published this year. The color of the capital gap report from boston indicators using data from the Federal Reserve small business credit survey makes clear the inequities and access to capital for small business owners and communities of color in particular, and I'd like to share some of those data points. Um Number one entrepreneurs are of color are less likely than white entrepreneurs to receive external financing, even when controlling for risk. Second s. seven loans, which are intended6425 to fill gaps in access to capital, do not appear to effectively reach black and Latin x firms. And finally, only one out of 10 small business loans go to racially diverse neighborhoods, even though nearly 20% of Massachusetts entrepreneurs are people of color. Um Black brown, immigrant, indigenous and women owned enterprises throughout the commonwealth face high hurdles to garner the6447 financing that they need to survive and grow in better times. They were faced with discriminatory practices and skepticism in covid times 40% of our small businesses have gone under. And from a more personal perspective in my hometown of Lawrence, I worked closely with our city council as a former school board member and have seen firsthand the city struggle with supporting small businesses and operating with scarce resources um are being declined, declined by local institutions who might not have the capacity to help public banking is really a part of the solution to these issues. It is a6480 form of reparative justice as it can benefit local communities because it isn't driven by the need to seek higher profit for shareholders. Our communities6488 can no longer afford to repeat the aforementioned um narratives and it's time that we change this narrative by establishing a public bank by the people and for the people. I respectfully ask that you support S 6655 H 12 23 favorably out to this committee as swiftly as possible. Thank you for your consideration and time, thank you. Cassidy6508 appreciate your time
for the folks in the panel. Thank you. Good afternoon Chair Crighton chair. Murphy Members of the committee, I'm keith Mahoney Vice president of Communications and Public affairs at the boston Foundation and I'm happy to represent the Foundation and our support for an act establishing a massachusetts public bank as Cassidy Just highlighted this spring, the boston indicators. The research team housed at the Foundation released a report in conjunction with the coalition for an equitable economy to trace how systemic racism has held back greater boston's entrepreneurs of color. This report. The color of the capital gap traced the historic lack of capital access from black latin X and api business owners. The result of a wide range of factors that have limited wealth accumulation by people of color and their exclusion from public and private business support programs. The report showed that there was nearly a half billion dollar shortfall of capital needed by entrepreneurs of color in massachusetts. It is this lack of capital, not a lack of good ideas, hard work and dedication that is perpetuating our commonwealth wealth gap. This is not a problem of previous generations or for history books. This is a problem facing entrepreneurs of color every single day establishing a public bank in massachusetts will start to remove these barriers and be a step towards closing that wealth gap. The conversation on the colour of capital6603 report ended with four recommendations to increase access to small business loans, increase access to equity grants and alternative financing structures, regulate the small business financing sector and increase the representation of people of color in capital allocation roles. The establishment of a massachusetts public bank will increase access to capital and representation in our commonwealth. So I urge this committee to report the legislation out favorably. Thank you for your time.
Thank you for your testimony.
All the members on the panel.
I'm Christine design leo got Lee Professor of law at Harvard Law School where I teach courses about the monetary system. Thank you for the opportunity to speak. I'd like to support the public bank bill with three points. Uh the first point, as many people have made clear we have a structural problem getting money out to an array of deserving borrowers, those borrowers just don't fit the profile, that commercial banks look for. They may not have sufficient collateral to offer. They may have no credit histories often because they are entrepreneurs of color who have been shorted by the racial wealth gap. They may have collateral, but they are too small to be cost6682 effective for many banks to support a variety of other borrowers don't fit the profile for other reasons. Our cities and towns land trusts, small farms are difficult lift for banks by themselves. Second point, public banking is a structural solution to that structural problem. The reason it combines the potency of banking with the reach of the public. On potency, banking brings powerful capacity to a lender. Banks can lend low because they provide the money supply. In modern societies, the deposits they hold, tie them into a network of existing wealth that allows6721 them to create money through extending new credit banks can take a6725 some with capital and lend a two time to 8 to 10 times as much Working within6730 the networks of6731 credit they create. It's a powerful business model. A public bank could use the same powerful business model. The public could also lend as a bank, thus take a sum of capital and lend a two time 10 times as much that's potent. But while a public bank could use the6748 potency of banking,6749 it would also lend differently. It would lend with the reach that is public not restricted by the priorities that constrain commercial banks, The public bank legislation directs lending to just those borrowers falling through the cracks today. In addition, the bill states public priorities for financing, including borrowers from underserved communities, Cities and towns and other deserving entities. My last point, the proposed bank is extremely feasible and entirely accountable. The bank proposes a relative. The bill proposes a relatively small bank. The bank would be capitalized by $200 million dollar investment by the state. This is a pilot program, not a high risk endeavor. As for deposits, no new money is needed. The state would transfer a portion of existing revenues about 1.4 billion currently held in MGT accounts, mainly out of state to the bank. While small, the bank could make a significant impact assuming a very cautious practice. It could lend almost a billion and a half in loans. Finally, the bank would be accountable. The legislation is structured around strong governance provisions that provide for public input and expert direction to wrap back to the beginning. Our communities have6822 been haunted by a structural problem. The public bank would innovate a principled solution. One that demonstrates the state's resolved to go to the structural level to fix the problem. Thank you. Thank you very much testimony. I believe we have one more member of this panel to speak.
Hello. Um Thank you. Chair Crighton6847 chairs. Crighton Murphy members of the committee. I appreciate the opportunity to testify in favor of the public banking bill. Um I'm Nadav Orien peer, Associate professor of law at the University of colorado, where I teach banking and6863 public purpose finance. Previously worked as a business economist at the Federal Reserve Bank of Chicago and also a former resident of massachusetts. Um I have been involved in the extensive research effort taken by the Public Banking Coalition and would like to6877 report some of its highlights. Number one, the public Bank offers a low cost way to address the well documented credit needs of underserved communities, With only 200 million in appropriated funds. The state would facilitate nearly 1.6 billion in lending. Our calculations show that the cost involved to the state budget will be very small, less than 17 million annually and that it will be easily offset by new tax revenue from economic activity that the bank itself would facilitate. Um second point that6909 suggests that the public bank will enjoy significant cost savings compared to private Massachusetts banks in the range of 2-3% of assets annually. The largest driver of these cost savings is that the public bank would only have to serve a single depositor that is the massachusetts6925 treasurer and work through intermediaries for its lending. The public bank will be able to use these savings to reduce lending rates to borrowers and build loss reserves. This would allow the public bank to support borrowers that cannot be served profitably by private commercial banks today. Third finding there is no considerable overlap between the role of the public bank would play in the existing network of quasi publics, no existing credit program in massachusetts has both the mission and the scale of the public bank. Some credit programs have the mission but not to scale others have the scale, but they have a different mission. Neither has both. We've also surveyed recent initiatives in the government and the Governor's covid economic Recovery Plan and the federal Arpa. Um These are steps in the right direction, but they do not substitute the need for public bank. Indeed, the public think will make these initiatives far more effective. Lastly, we have studied the 2011 public bank bill and find that the president bill is a very different proposition6985 in terms of its purpose, its size in its cost. Um I would therefore encourage committee members to to approach the new deal with with entirely fresh eyes uh to some a great deal of research and attention has gone into crafting the bill. This is most and foremost to the credit of the many community members and stakeholders who participated in the process. Will be glad to further share the details of our research work in written testimony. Um and for these reasons, I would I would support a favorable report of the bill. Thank you very much. Thank you very much for your testimony. I think that's it for the panel. Mhm. I am not mistaken. Uh any questions for the panel from members of the committee. I'm on the panel. Okay, sorry about that. Please state your name and uh feel free to testify. Okay. Uh Richard crush nick uh retired from uh the boston neighborhood development department uh doing uh workouts of community development projects and managing the city's7054 Lawn portfolio for many years. Uh I wanted to just highlight one little aspect of the bill to explain how it supports existing financial institutions in the state uh since it's written right into the bill that the bill will not compete with existing massachusetts based financial institutions that includes the quasi public uh a case in point. Uh Mass Capital Corporation, Mass Growth Capital Corporation. Now, Mass Growth Capital has Lawn portfolio for small businesses, the most underrepresented, underserved business community in lending. Uh it has a lawn portfolio, about $33 million. Now, the public bank with a portfolio of around $1.5 billion can easily afford to support the Mass Growth Capital Corporation to expand its operations. I can do this by participation loans to individual borrowers for the larger loans that Mass Growth capital makes you can also7135 do this by a very low interest program related investment loan to Mass Growth capital. So that mass Growth Capital could expand considerably its own lending and it possibly by sharing risk, could even amplify mass growth capital ability to serve very small businesses which of course is the greatest need. The bank could similarly support mass development which has a loan portfolio basically exactly the same size as s growth capitals. And it can support mass development in exactly the same way that it could support mass growth capital. Uh, even it could support the quasi public involved in a housing development, but only in since again, it's not competing with existing lenders in the state. It could support a given housing development, a large housing development and where the quasi public that are already lending ready to lend to that development along with commercial banks, uh, where the existing lenders to that development, if7215 there still is a gap remaining, they could invite the public bank to fill that gap. There are many ways that the public bank could strengthen amplify uh, and serve the existing network of7233 quasi public in the state. Thank you. Thank you, Richard, any questions from the committee
seeing none. Thank you very much. We now have another panel. Michael SWAc, gerardo espinosa, bob Van meter, Douglas Cliggott. Michael, joseph Harry Newman.
Fantastic. Could you all7262 hear me? Okay, is that panel ready to testify?
Michael Swac was the first member of the panel to sign up. Michael you on.
You see him on
No Gerardo espinosa you on? Yes, I am drought. I don't know if you have an order of which you all want to testify. But Michael signed up first and then you signed up for other members of your piano on right now bob van meter, Douglas, Cliggott, Michael, joseph E and Perry Newman, Harriet harman is here then. Okay. It's here. Okay for anybody in the panel that wants to kick it off. Please feel free if you can stick to the three minutes just so we can get to, everybody can be great.
Uh, Mike Michael, are you in the, at the panel now?
So let me go ahead then. They Good afternoon chairman and members of the committee. My name is Herard espinosa7330 and I serve as executive director of the local enterprise assistance fund. The acronym for our organization is Live Live is a community development financial institution and C D FFS like live were created with a mandate to serve vulnerable populations. I think a fair amount of the testimony so far has been at the macro level. I wanted to now chief a little bit to the micro level7361 based on the work that we do on a day to day basis to give you uh, specific illustrations on why we believe the public bank will serve the needs of uh, massachusetts. Let me start with part of our work is with entrepreneurs7377 in communities of color through this work. We met about four or five years ago and entrepreneur7384 that is from Jamaica at the time he was leasing space, commercial kitchen space. Uh, the commonwealth kitchen. He had a couple of food tracks and we initially started working with him, supporting him with technical assistance for his business. That was followed on by a small loan of $30,000.
Then as they've been was expanding, he wanted his only space. Uh we provided financing of $250,
So he could get his first store opened in Jamaica plain. Uh Later on there was an opportunity to acquire another operation in the Allston Brighton neighborhood which he has done. So at the moment he has the food tracks the to the to restaurants. And when we started he employed 20 persons. Now he employed to employed to persons. Now he employs 20 persons and he has been invited by a prominent developer to open a new store in the support complex. Right? So that is an illustration of the type of businesses I think that can benefit from the public bank and more resources to more resources to the C. D. F. I. And I mentioned this because this is a good illustration of afraid that someone in the CDF industry likes to say the expression is we love to lose clients again. I repeat it. We love to lose clients. And why is that? Because when we lose clients are like for instance this business I just referred to now they are ready to go to a bank for a loan and to keep growing and so on. Right? So that is the role that we are C. D. E. F. I. S do and how we could benefit as well from working with the public bank. Thank you. Thank you. Thank you. So I would like to testify next. Uh
this is bob van meter. I'd like to sure bob, go ahead. Thank you. Okay, thank you. Chair Crighton and Chair Murphy and members of the committee for the opportunity to speak on this important legislation, Senate 665 House 12 to 3. I'm a member of the advisory committee for the massachusetts public bank effort and have a More than 30 years of experience and community development here7544 in Massachusetts. I served as executive director of the Austin Brighton Committee Development Corporation for 15 years and for 10 years I lead Lisk Boston, the Boston Program of the Local Initiative Support Corporation, one of the nation's largest community development lenders and investors. I'm currently a consultant and adjunct faculty member at boston College. I've worked with the state's quasi public7568 lenders during my career as a borrower and as a collaborating lender. Similarly, I've worked with the other development lenders uh known as Committee Development Financial Institutions or C. D. F. I. S. These institutions, both the quasi public lenders and the C. D. F. I. S. Do an excellent job working together to share risk and to advance key community projects but cannot for a variety of reasons meet all the needs for flexible community driven investment when the recession of the foreclosure crisis struck the country in 2000 and eight, the CDF es who rely on large credit facilities from commercial banks were impacted. The terms of our credit facilities tightened. It was harder for CFCs to take the risks that need to be taken to advance economic and housing development and disadvantaged communities. The public bank would be less vulnerable to the pressure that CDF es face from large commercial banks. Yeah. At list. We were also deeply involved in lending to minority businesses and supporting minority entrepreneurship. Several times we had opportunities to invest in or lend to promising businesses and we're unable to provide capital because the businesses did not meet the underwriting criteria, criteria that we had as a lender. Mass growth capital is doing a good job but can't meet all of the needs either. The public bank will meet needs that current quasi publics and and C D F I E s are not able to meet. It will collaborate with those lenders by participating in loans and providing lower interest funds that can bring down the total cost to borrowers. A program that's been mentioned in some discussions with the administration is the cap program, capital access program. It's certainly meeting some needs, but it is invisible to many businesses and people in the development field and not accountable to the public. The way the public bank will be. Mhm. As many other folks testifying have said we have a racial wealth gap. Homeownership gap and the gap in the ability of minority businesses to grow and simply survive the challenges the pandemic has caused. The public bank will have a broader scope of action, more flexible underwriting guidelines and a larger amount of funds will bring significant boost efforts to grow black owned and other minority business ventures. Thank you for the opportunity to testify. I respectfully ask a favorable report on this legislation. Thank you bob.
I would like to testify. Next
Douglas Michael Perry.
Now this is Perry Newman. May I go ahead? Sure. Great Carey Sure. Thank you so much for the opportunity. It's7736 nice to see some of my current and former colleagues on the panel today. I'm going to be very very brief I think. Uh what I have to say follows very nicely what Geraldo said and what bob said, I'm the Ceo of Dorchester Bay Economic Development Corporation here in Obama's corner. We are a C. D. C. Community Development Corporation were also a C. D. F. I. Which bob described a moment ago as to Geraldo and we're also an sp a micro lender. Um Most of our borrowers well over 90% of our persons of color and for women. Um the average size of our loan is roughly $14,000 when we've made7774 loans as small as $2500 and many loans over the years. Well over $200,000 but for organizations like ours, small C. D. F. I. S. That are active where the rubber meets the road, so to speak,7785 access to capital that we ourselves can then lend to the community is a challenge just as access to capital is for the ultimate borrowers in the community. We access our funds to lend either from the Treasury through CDF I funds or from the S. P. A. Through grants for this purpose. Very low interest loans or from philanthropy. A public bank would enable us to have another source of capital that we can then deploy in the community directly. This is, this could be a real boon for organizations like ours that worked very hard to obtain the capital, which we are then duty bound to re lend. Um low cost capital for an organization like Dorchester based neighborhood loan program. Could be a real game changer for the communities to which we lend. And the very small businesses that are just starting um, and are unable to access capital elsewhere. As Elugardo said it's great to lose borrowers if you're in the7845 CDF I business, the type of capital that we extend as high risk because many of these borrowers of course could not go to the commercial bank to get that capital. So providing us with capital. Organizations like Dorchester Bay and other CDF is with capital through a public bank. Could be a real game changer for those of us who are very active in the community and who seek to7866 make the kind of change that others who have spoken before me have done so eloquently to define the need. Thank you so much and I really urge strongly with the greatest respect your passage of a favorable report of this bill. Thank you. Thank you very much.
Is Micah or Douglas on uh, doug Cliggott is here. Okay. Um, thank you chairs, Crighton and Murphy for giving me the opportunity to speak. My name is doug click it. For the last 10 years I've been teaching economics out of UMass in Amherst, uh, for about 25 years before that I was working in banking and finance and like my previous speakers, I'm here today to speak in enthusiastic support for the creation of a public bank. Small businesses founded by hardworking, ambitious people are well established path for creating jobs and well in the commonwealth and in America's whole but more is needed than a good idea and an excellent work ethic. The founders of small businesses need funding. They need the initial capital. Many business founders rely on savings accumulated over the years from well paying jobs. Others rely on their parents or family members to gather their initial capital that initial funding can then be7961 leveraged with bank loans to really build their businesses without the accumulated family savings to invest in an idea. Bank loan officers often can't provide7973 access to funding for the business concept, no matter how appealing or high quality it may be, The risk profile of new business is simply too great for a typical bank to lend money to help it grow. So this tried and true american mosaic, an idea coupled with hard work and a modest amount of capital is then scaled up by bank lending. It's not open to all ambitious people living in our country or in the commonwealth. What's often mission is the initial capital. That's where the public bank comes in. A public bank could step in and provide this missing piece. A public bank could provide long term, low cost lending to entrepreneurs that have8018 a great idea and excellent work ethic. But as luck would have, it happened to be born into a family with little or no accumulated savings, funding of the great idea from the public bank with and lower the risk profile of the overall business and make it8036 more appealing for traditional banks and other investors to step up and add capital. This would be a win win for all involved for the entrepreneur, their future employees and customers in the commonwealth of massachusetts. Um, public lending is not a new idea. There's many examples of it. Um, but I think the key here is they think how many bright ideas might be out there in massachusetts now, they really need that initial funding for the existing financial infrastructure to step up and make it go. Uh thank you for listening and I hope you forward this bill with a very favourable opinion. Thanks. thank you. Thank you. Doug Micah joseph p on the line. Yes. Hi, good afternoon. Uh
thank you. Yeah, thank you. Chairs Crighton and Murphy for the opportunity to testify today. My name is Michael joseph and I'm the executive director at the Cooperative Fund of New England, known as CF any. I'm testifying today in strong support of S 665 H 12 23. An act to establish a massachusetts Public bank. Stephanie is a 46 year old regional CDF based in Massachusetts that finances and provides technical support to cooperative businesses across the region. We managed a growing $26 million $13
million Commonwealth
co operatives are businesses democratically governed by their8143 primary stakeholders who are their workers, their customers and or their suppliers. The co operatives aggregate the economic power of regular people to meet their needs, just like credit unions who build the economic power of low and moderate income households to access quality financial services. Other types of co operatives allow communities from Dorchester to Greenfield to develop their own grocery stores. Workers from Lawrence to Holyoke to share ownership and control of their workplace and tenants from Cambridge to Worcester and beyond to own their own housing cooperative businesses face significant hurdles to access and credit for a few reasons. The first is that8188 the sbs widely popular loan guarantee program requires that borrowers provide personal guarantees, a demand that doesn't work for a cooperative shared ownership model. Additionally, communities use co operatives to create shared economic opportunity when individual opportunity is largely lacking. That means that co op members generally can't self finance their businesses and can't rely on friends and family networks to assemble critical launch capital for these reasons and more Cf any and many of the other CFCs that you've heard in the panel today provide critical capital and development services within the commonwealth. By creating a public bank. The legislature will create critical support for CFCs which in turn then support bipod communities, women entrepreneurs and others historically excluded from economic opportunity. So I respectfully ask that you favorably report S665 age 1223 out of this committee and thank you for your consideration.
Thank you very much. Mhm Michael Sweet on the line or not? Yes, I am on the line. Okay, feel free to testify. Mhm. Okay, thank you very much. Thank you. Chairs Crighton and Murphy for the opportunity to testify today. I appreciate it. My name is Michael Swac. I'm the director of the Center for Impact Finance and teach at the business and public policy schools at the University of New Hampshire and I am a resident of Lexington massachusetts. Uh, in speaking about the public bank today, I am in favour it's a question I've looked at very carefully over the last six months or so and asked myself three questions. One do we really need a public bank? There are a lot of8304 banks in the state right now. Can the bank sustain itself and even grow that is a sustainable business model and can the risk be managed effectively? I feel for myself, I have answered these three questions and that it makes sense to uh support a public bank. Uh three things I've looked at our first of all, what's the demand and in fact there is a very large demand in massachusetts for these types of funds that isn't provided by the range of banks right now. In fact, banks would be helpful in actually leveraging the public bank had leverage more money. We looked at a number of the CDFS that Mika Joseph E just spoke of and found that they had on average a deployment rate of 86%. What that means is these institutions that make a talked about these CDF I certified institutions that now manage over $2.2 billion are 86% deployed. That means they're finding8365 they're part of an ecosystem that's finding uh borrowers who have a need for capital that's not well served by other institutions right now and these institutions by design, serve underserved people in their communities there. In fact required to on the basis of their certification. Second, this is a sustainable business model. If you actually look at the numbers and crunch them. Uh this can be sustainable on its operations. It would have a very good efficiency ratio, meaning that it could use its funds well. Uh and in addition to lending to this rich set of intermediaries of C. D. F.8402 I. S could work collaboratively with banks throughout the state. Finally, we believe that the uh the bank can manage risk successfully in part because by lending to these intermediaries, these intermediaries have a successful track record of managing risk is evidenced by very low losses over a long period of time. Additionally, they have very high amounts of capital meaning strong balance sheets that protect them8430 from any losses because of these three things because they can we can have uh it can demand, it can provide capital that's needed and it can manage risk effectively. Uh I support8443 uh the passage and asked respectfully that you report favorably out of this committee. Thank you very much for your consideration.
Thank you for your testimony. Uh Any other members of this panel is there is that rest8458 us?
All right. Any questions from members of the committee?
Just a quick one. and they do so as the chair,
The current bill before the committee, you know, how does it differ from the policies that were examined back in the 2011 Commission as curious what what differences if any, there are some of the previous policies that have been before the commission.
Uh could I respond to that? Could I respond? This is richard crush nick.
Uh That was just one or8501 2 line proposal for a public bank. It didn't specify or really flesh out anything at all about how it would work. Howitt function. Uh you know, it was just an opener. So
I mean there's no way to compare. It basically outlined nothing specifically. Whereas now we have a, you know, extraordinarily detailed bill that addresses, we hope all of the primary issues involved. If I may also jump in and add to richards important point. Um there are there are three court issues in which the current bill is different. Um the first one is purpose the purpose of the 2011 bill, right in the aftermath of the 2009 financial crisis, we'll try to provide macroeconomic stabilisation for uh for massachusetts. And that is why the Bank of North Dakota was subject to a study by the boston Fed etcetera. Um That is absolutely not the current purpose of the bill. The current purpose of this bill is as I have just uh all of um um as the testimonies that have just been provided is to promote access to credit in underserved communities. Um that second point, which is the size of the bank. If you want a public bank to do macroeconomic stabilisation. We need a very large bank and that was the case in 2011. So a bank that was supposed to have 30, 30 billion in assets in one of the largest banks in Massachusetts. Um this Is8606 as professor dozen noted a pilot program, it's much smaller. So the total size of the bank would be 1.6 billion. So about about 1/30 of uh of the 2011 bank, the capital is only 200 million. Um The third point is the cost and the logistical aspect of the bank. So one of the key considerations in rejecting uh 2011 initiative that would have required a wholesale transfer of cash management from the existing commercial banking system by the massachusetts Treasurer. Um And um and legislators were concerned that this would involve considerable difficulties. Um In sharp contrast, This bill only involves the transfer of8655 $1.4
billion, not $308658 billion. Um and these are funds8661 that are not so called fast money is using for payroll etc for ongoing day to day transactions. These are funds that are currently invested um in a money market cash portfolio, M. M. D. T. Um And earning a very very low return. We've looked at the numbers just just under 1% annually since 2013. Um In other words, this would this would involve no uh no uh no transfer of funds from existing massachusetts. Commercial banks or or complications to the treasurer. Thank you.
Thank you appreciate the answer to my question. Um with everything to stand up for your testimony, I'd like to now welcome up panel with dancy Ryan ruth, Kaplan, Jackson, renshaw, john smith and Andy Pollock.
Thank you. Um this is nancy brian, I am appreciative of your patients but you can8725 see what a broad coalition we have built. I'm proud to sign the co chair of the mass bank public Banking Coalition. I'm going to talk about women's needs for credit for 25 years. I was executive director of the city of Cambridge Women's Commission and was a founder 23 years ago of the massachusetts Commission on Women. I'm addressing you today regarding the need for women owned businesses, particularly small and newer ones and the gap in their our access to affordable credit. We have many stories from small massachusetts, women owned business across the state to share with you and we will. But today I just want to8763 paint the larger picture because our proposed public bank is a structural solution to a structural problem that is not new radically exposed during the covid pandemic8773 women have been forced out of the workforce in8776 massive numbers by Covid And one creative response to that lack of income has been individual and groups of women starting small enterprises. But here's a snapshot of the current situation for women-owned businesses, 80% of women-owned businesses have limited or no access to credit One out of every $23 in community bank loans go to women owned businesses in Boston. Even among small business administration loans, women received 2.5 times fewer funds than those received by um male owned businesses. An Urban Institute study shows that only 4.4% of all funds lent to small businesses went to. Those owned by women. Women-owned businesses tend to be younger, have less of a track record to prove credit worthiness, 64%
of new women owned businesses were started by women of color in the last year, a recent boston Globe study story illuminated the extra barriers to success these these owners experience given the racial wealth gap and access to capital and credit overall women businesses, women business owners received fewer and smaller loans for higher rates. Credit scores an annual revenue play a huge role in accessing loans, thwarting attempts8860 to grow and build out their startups. My last point is that women play outsize roles in the creation of cooperatives which have been addressed already, workplace co operatives, food sourcing co operatives and housing as non traditional forms of enterprises. They faced serious barriers to accessing credit. Our proposed public bank addresses specifically these and other economic inequities and could play a role in closing some8886 of these gaps. So I urge you to report this out with an enthusiastic favorable and thank you so much for your attention.
Thank you. I'm sorry,
uh, all the members of the panel would like to speak.
I'm happy to, I'm happy to go next. Um, I'm ruth Kaplan and I'm very pleased to report that the Sierra Club has endorsed this bill and I expect others will as well, because it's significant to our environmental future in both what it will fund and what it does not fund first. What it will fund the expansion and development of public and private measures to mitigate the grave dangers that climate change poses to the public and to promote substantial reductions in greenhouse gas emissions. This is a critical concern to the environmental movement. This isn't just about8948 tree huggers, it's about the future of every person on our state, our Children, our Children's Children. It's about the rising waters that threaten our neighborhoods, our businesses, it's about the increasing unpredictability of precipitation, too little too much as temperatures rise in atmospheric circulation becomes more chaotic and it's about jobs, jobs making8971 our homes and businesses more energy8973 efficient jobs, putting solar on rooftops, jobs, transforming our electric grid to solar and wind farms off our coasts, jobs, making our coastline less vulnerable to rising sea levels, jobs, making our local food supply, withstand the changing climate and less dependent on a chaotic global food chain jobs, building resilient infrastructure across the8997 state and it's about environmental justice. We applaud the bills commitment to address the9003 historic and current economic inequalities experienced by the state's communities of color and it's about making our communities, all our communities resilient by providing affordable financing to our municipalities, which now rely primarily on the bond market financing for affordable housing for local infrastructure, for protection of the local natural environment. Second, what it will not fund
no pipelines, no energy transfer stations, no fossil fuel power plants. We raise up the work of green routes, Chelsea for their organizing to stop fossil9045 fuel infrastructure and to create a green resilient infrastructure in their communities. And we hear the voices of the Sunrise movement, voices of our young people demanding a future without climate chaos. Just9059 this past sunday young people were engaging in a hunger strike in9063 front of the U. S. Capitol. We can't wait to act until our young people are so desperate that they go on a hunger strike on Beacon Hill, creating the massachusetts Public Bank is one positive step the9077 legislature can take to give us hope for the future our future. Our Children can embrace thanks for this opportunity to testify on behalf of our environmental concerns.
Thank you for your testimony.
Welcome. The next member of the panel.
Hi, good afternoon. My name is john smith and I'm the executive director of the Douglas Street neighborhood initiative. I want to thank the chairs Crighton and Murphy And the members of the committee for the opportunity to testify today uh in support of9112 this act established in massachusetts Public Bank. Uh Yes, and it is a nonprofit community based planning organization founded in 1984 as the direct result of residents from Roxbury and Dorchester coalescing around community revitalization, unique in this effort was9129 the acquisition of vacant land through the power of eminent domain and the creation of a community land trust which owns in perpetuity, some redeveloped land and projects in the Roxbury area recognized, nationally recognized for its track record in neighborhood revitalization effort. And his comprehensive Reports to Community and Economic Development Organization organization is focused primarily on development without displacement. And what we have seen recently in light of the covid pandemic is that neighborhoods that experience economic equities have been left behind due to issues not of their own. Making these neighborhoods sit with9166 systems created by policies and reflecting structural racism that act as barriers rather than enable us to economic opportunity. We work through our land trust and community organizing efforts to address these systemic problems that drive differences in economic opportunity within these segregated neighborhoods. Specifically, we address the need to develop, acquire and preserving affordable housing and create intentional labor job markets. Job pipelines for people of color from those neighborhoods and these problems are already9198 pronounced, but they have been exacerbated by covid 19 making this public bank timelier than ever. History shows us that community Land Trust, which we run have many benefits that include helping neighborhoods resist gentrification, giving more families the opportunity to own homes and co ops um and giving members community members a meaningful voice in community development decisions, every affordable housing project is funded with significant government investment and when affordability restrictions expire, the owner of9232 the building gets to cash out in the CLT model. Tax dollars applied to the initial home construction are preserved for subsequent homeowners. This means public investments have a longer and larger impact in the CLT. These could include buying existing and available housing units to preserve permanently affordable housing as part of a land trust housing and worker cooperatives and land trusts.9256 Food crops are not well served by traditional banks and needs a public bank that works through intermediaries like CFCs which provides9264 technical assistance. We need innovative financing models, especially for businesses and by park communities and for these reasons and all the other reasons articulated by other panel members. I urge the committee respectfully to favorably report out in this bill. Thank you so much for your hard work on behalf of the people of the commonwealth of massachusetts.
Thank you, john we appreciate your testimony.
one more member of the panel that haven't spoken yet. Mr chair, this is Sam Galabru. We're done with the panels. Jackson and Andy will submit written testimony. Thank you Sam we appreciate it. Any questions from members of the committee.
Seeing none. Thank you again to the piano for your testimony. I'd like to now welcome Gerald Epstein.
Yes, I'm here. Can you uh I thank you for for inviting me. I am uh Gerald Epstein, I live in North Hampton, Mass. And I'm a professor of economics at the University of massachusetts. Amherst and I wanted to uh speak in favour of the massachusetts Public Bank Act. S 665 H 1223. Um I'm speaking in favour of on the basis of two aspects 1. Uh as an economist, I've studied public banking and public financial institutions around the world and um in studying these, I found that well structured, well managed institutions can make a big difference for local economic development, reduction of inequality enhancement of opportunity uh9381 for all workers and people there. But the second is I'm speaking as a resident of Western massachusetts and as a resident of Western massachusetts, I I see that9395 in my own community in Springfield and polio, um in the Hill towns around around9402 the Pioneer Valley, there's a great need for financing for food co operatives for small businesses for all kinds of economic activity that help women people of color and marginalized members of our society. Uh There's a great need out here in9425 Western massachusetts and I think the public bank could make a big difference in providing credit through C. D. F. S. And other organizations to co operatives like the Wellspring cooperative in in uh in Springfield. Um Food co operatives in our area, small businesses in Worcester and Holyoke. Um So I uh um as a as a member of the western massachusetts community, I am very much in favor of this public banking initiative. So I very much hope that your committee will evaluate very positively this this bill and thank you very much for allowing me to speak. Thank you. Do appreciate your testimony. Any questions from members of the committee
seeing none. Thank you again,9478 I'd like to now welcome barry Levine. That's about
yeah. Mhm. Uh huh hopefully varies with us. Dawn Duncan. Mhm
Hello, can you hear me? Yes we can. Thank you. Floor is yours. Thank you. Hello, thank you for the opportunity to testify today. My name's Dawn Duncan. I am a homeowner in Lynn massachusetts and the secretary of the board of the Mass alliance predatory lending A. K A Maple. I'm here to speak in support of H 10 73 the Resolution Trust fund act and H 11 44 and act to facilitate alternatives to foreclosure. I support these bills based on my experience as a homeowner who has been in a state of ongoing limbo regarding a 2000 and seven refinanced mortgage 10 years as well as a member of Lynn United for change who helped with the implementation of a9539 highly successful foreclosure mediation program in Lynn that had a nearly 100% success rate. These bills complement each other, particularly due to the transparency requirement of proving who actually owns the mortgage. One would think This is a basic piece of information and it wouldn't be that difficult to know. However, from my own shocking9559 experience, it is not in my particular situation. I was offered and accepted a permanent loan modification for Bank of America in December 2010 and I paid the mortgage payment every month. However, the bank inexplicably stopped accepting my payments in September of 2011 And attempted to foreclose on my home in July9578 of 2012 as an attorney, I hired to help me with part of my case reviewing the situation less winter said they didn't really default you. They defaulted themselves. Even he could not make sense of why a bank would stop accepting payments with no reason. What's even more troubling is that Bank of America, the entity that I have been paying and which eventually refused to accept my mortgage payments did not actually owned the mortgage. The fact that I only truly understood many years later, Looking back from where I sit today, it's clear that both of these bills could have been helpful in a situation such as mine, a resolution trust fund for me to make payments into during a period of time when the mortgage, he has due to accounting system problems, incompetence or other reasons mismanaged the mortgage so terribly would have helped me protect myself as a homeowner and could have resolved my situation much more quickly. Similarly, a mediation program, I would have force the mortgage e to find the paperwork pertaining to my mortgage, sit down with me and solve the missing paperwork issue instead of being allowed to move forward with an illegal foreclosure that I was only able to stop by9643 filing for bankruptcy days before a scheduled auction in my home. The theme of these two bills to me is transparency, simply transparency of information who actually owns the mortgage, actual records of transactions, accounting9655 and payment. It sounds so basic, doesn't it? I also know as a member of Lynn United for change who participated in much of the door knocking for homeowners and Lynn who qualified for the mediation program before it was stopped suddenly that it works. Every person that I met that attempted Mediation succeeded in working out an arrangement that work for both parties. Every single one please pass these bills so that others don't have to spend 10 plus years in limbo like I am thousands of others have had to do. Thank you very much for your time and the opportunity to speak today. Thank you john we really appreciate your testimony and your hard work on this important issue. Any questions from members of the committee
seeing none. Thank you again. Don, thank you. Next like to welcome rob Maclean. Thank
you. Chairman, Crighton and chairman Murphy and members of the committee. My name is Ron Maclean. I represent the association that represents creditors in the state of massachusetts and I want to thank you for your time this afternoon. My comments to be brief. We submitted extensive written testimony. The association believes the best financial institution charter for the working families of the commonwealth is the local cooperative, not for profit credit union charter. The dual chartering system for christians must include a healthy, flexible and visionary state charter to serve the working families of the commonwealth into the future and it must keep pace the federal charter. A clear statutory chartering gap exists in the state as there is no authority at present for a state reunion to be the survivor of a merger or conversion transaction with the bank. Furthermore, state corrections do not possess9762 a direct purchase of assets or assumption of liabilities authorities. Senate 6567735
and House 11 oh eight seek to cure this problem by providing similar parody at the state level mutual institutions, a full complement of transaction opportunities are available equally for both local credit unions and banks. If an acquisition takes place, it benefits the credit union, its members bank's shareholders, bank customers and communities, communities benefit from the transaction because Kerans past earnings to consumers in the form of lower loan rates, higher savings yields and fewer and lower fees. Additionally, creditors preserve access to financial services for the bank customers who become credited members, local economies benefit by keeping the institutions assets in the state rather than out of state. The result is a true local community institution. Finally, let's give banks the choice on this issue and have them decide for themselves if a transaction with the Kerans union is the best path forward. House 12 13 the association strongly supports the adoption of state legislation that authorizes state and municipal officials9839 and agencies including school districts to deposit funds into credit unions and creditors to extend public funds subject to the statutory limit benefits include economic empowerment choice. Local communities should have a choice of institution deposit public money into and not artificially restricted by statute. Local public officials often point to the convenience of access and familiarity with Kerans at the reasons why they seek the ability to deposit funds into credit names. Lastly, every dollar saved counts, especially with local communities facing tight budgets and fiscal cycles. Before I conclude my testimony, I ask the chair to respond to a comment or question earlier in the hearing, I'll be very brief. Yeah. Well, hearing an objection, I do want to respond to the comment question about TPP loans. I'm very proud to share that during the pandemic credit unions helped9895 save over 50,000 jobs in the commonwealth and the average P. P. P. Lo. And by correcting9900 it was $50,000 which is half the national average meeting that Canadians in the state really met the needs of the smallest of small businesses
that concludes9910 my testimony and thank you for your time. Thank you so much for your testimony. Any questions from members of the committee.
Seeing none. Thank you again rob. Yeah. Next I'd like to welcome Sarah Mckee. Mhm
Sorry you. Good afternoon. Can you hear me please? Yes we can. Sarah, thank you. Thank you. Senate chair Crighton House chair, Murphy and distinguished members of the Joint Committee on Financial Services. Thank you for the opportunity to speak with you today in support of H1073
An act to establish a resolution trust fund and to say a few words in support of H 1144 An act to facilitate alternatives to foreclosure. My name is Sarah Mckee. For more than 40 years, I have been a member in good standing of the District of Columbia Bar. I am a former federal prosecutor and passed General counsel of Interpol for the United States.
After retiring and returning to massachusetts, I served in 2013 as governor, developed Patrick's appointee for law to the legislature's registry of deeds reform Commission. This led to9999 my volunteer work with the massachusetts alliance against predatory lending, which Don10005 Duncan witnessed. Dawn Duncan mentioned recently and to my10009 being here today looking at the10012 evidence in many cases of foreclosure,10014 on massachusetts families. Holmes I saw that this10019 evidence showed that the bank or securitized trust or other entity that10025 had foreclosed non judicially on the home did not actually own the mortgage. The four closing10033 entity had10034 been collecting mortgage payments at least until the family10037 could make, make them no longer. But the evidence10040 showed that it did not own the10042 mortgage10042 and in many10043 cases That no one did. I think you are probably all familiar with the sorts of corruption of legal titles that can happen with securitized trust and other practices.
Massachusetts has legislation. We have laws that allow the commonwealth to take10064 over unclaimed stocks, bonds and similar assets.10067 We have a statute that allows the10070 commonwealth to take over the estate10072 of10073 a person who dies without a will and without a surviving spouse or other family member. But we have10080 no statute that allows the judge a judge to transfer to the commonwealth, a mortgage loan that does not have an owner. For10090 instance, during the10092 mortgage crisis, many10093 financial firms that owned mortgage loans went out of business without making provision for a new owner. And that is the10102 reason for this resolution10103 Trust bill,10104 When a judge, for instance, in a post foreclosure lawsuit for possession of foreclosed home sees10113 evidence showing10114 that before closing entity did not own the10117 mortgage loan. This bill will allow the judge10120 to transfer the mortgage loan to the commonwealth via the Community Economic Development Assistance Corporation known as Sadak CED,10131
the Legislature and Representative10135 Mill Kings10136 initiative Created Sadok more than10139 40 years ago as a public private partnership to help finance affordable housing and related endeavors10146 on the evidence. I have seen10149 practically all mortgage loans that are in10152 foreclosure will illegally predatory from the10155 start if a judge did not write down10158 such a mortgage to non predatory terms. The resolution Trust bill would allow Sadek to ask the Department of the Treasury what non predatory terms would be. See, Decker could write down the mortgage10172 accordingly. Many families dealing with foreclosure could afford their homes if their mortgages were no longer10181 predatory when the10184 resolution trust fund10185 has accumulated specified amounts of amounts of income from transferred mortgages. C deck would do what it does very10193 well assess applications10195 for the use of those funds to help finance housing10199 related projects in areas hard hit by home foreclosures.
The Thai in of the Resolution Trust Bill was H 1144. The pre foreclosure mediation bill.10212 Is this a bank as as john Duncan suggested. A bank trust or other entity that wanted to10222 foreclose, would10223 have to bring evidence showing that it10226 owns the mortgage loan. This would include the borrowers original wet10231 ink mortgage note in its current condition show that10236 the bank or other entity is really the creditor that owns the borrower's10240 debt. If10242 this evidence showed that the would be foreclosing entity did not own the mortgage loan. However, a trained mediator could transfer it to the Deep resolution trust. Excuse me, Sarah, I'm sorry to interrupt. We're just trying to stay pretty strict with the10258 three minute time limit. I don't know if you could wrap up your testimony in concluding ascension to to Yes, I will submit written10265 testimony and urge you strongly to report H 1073 favorably out of committee. Thank you. Thank10272 you. Sorry to cut10273 you off. We just have a long list of folks10275 still way to testify? We appreciate your testimony.10277 Any questions10278 from members of the committee? Ashe Seeing none. Thank you10283 again. Sarah, thank you. I'd like10286 to now welcome Angela Crane to testify.
Angela. You available?
All right. I'm gonna move on to Christopher Jackson. Mhm. Mhm.
Yes. Hello. Thank10312 you10313 Christopher. The floor is yours. Thank you. I am calling on behalf of S 665
deport themselves vouching departed stand here in the commonwealth of massachusetts from what I have read at the moment. There's10331 only once did one thing in the United States, the Bank of10336 not the court which10337 provides loans north of consumers businesses in the agricultural sector. The long term of a similar hit on profit bank10345 to be essential for the economic,10347 the commonwealth, especially During the 4th quarter 19. But then10353 you have why? Because10356 with10357 the small and medium enterprises back into the10360 economy there you can be in the best10363 interest of both the pockets and by the sentence, the internet. It's similar endeavour10369 just10370 like what is still at the quarter I've been successful to implement. Therefore, I am happy to be appealing this committee will support excuse me, Christopher speaking up. I'm having a little hard time hearing you. Can you hear me now? Can you hear me now?10389 It's much better. Thank you.10391 Do you want me to start from10394 the beginning because I'm almost done. I think we got we got most of it so we can10398 continue from there. Okay, so I10400 was about to see inclusive. I'm10403 more heartedly appealing to the need to support Bill S- 65.
10414 I'm10414 gon so does that conclude your testimony? Christopher? Yes, that's complete with my testimony. Thank you If you could submit that uh10423 in writing as10424 well but we definitely your10425 time and thank10428 you for the opportunity. Thanks for the opportunity.10430 Absolutely.10431 Thank you. Any questions from members10434 of the committee.
Mhm. Thank10439 you again Christopher. We10440 appreciate it. Thank you. Next I'd like to welcome Susan paul.
Uh we're gonna move on to alarm Biele says she
10464 And10464 next we have a panel I believe or
I'm not quite certain about the panel. It is a10471 panel with Alton10472 King Junior to start us off.10476 Yeah.10477 Hello, can you hear me? I can. And I'll just ask10481 in the interest of time that10482 after Alton speaks10484 other members of the panel as you as you.10487 I want to10488 join. Please just speak, speak up and10490 we'll ask questions after the panel has10492 concluded his testimony.
Hello, my name is
all right. Hello,10499 my name10500 is Alton King of10501 Longmeadow, Mass. I'm here to speak in support of Bill H 10 7310506 and H 11 40 for for housing is the basis of american society. This simple need and human rights drives10516 emotions behaviour and financial security. I speak about this important. The importance of these bills from a personal experience10525 in10526 2000 and six based on a 50% over inflated10531 appraisal of our home,10533 we obtained.10534 What we would learn was that illegal predatory loan, The first mortgage had monthly payments which escalated from $3,200
10546 to10546 $13,400
in less than five years. This made10552 it extremely predatory10554 as the payments became unaffordable.10557 Despite an illegal modification, foreclosure procedures were initiated in 2017, I am confident that the two proposed bills would have prevented this illegal foreclosure proceeding because, among other things, they would have ensured one proper notification10578 of the foreclosure process to detailed accountability and established10585 guidelines for lending institutions to help owners10589 homeowners10590 in modifying their loans to more affordable payments based on property10596 value and10597 available income. Three, an impartial moderator would have ascertained true ownership of the10605 documents for oversight of10608 the proper notification to be recorded in the registry of deeds instead10613 of an10614 illegal entity being given ownership of homes. All the major players benefit in a win win10622 situation. The10623 banks would be in10624 courage to maintain and produce proper records. Honan homeowners will maintain family and financial security, build collateral and and stabilize their investment in the community's the courts would become less burden. As objective moderators will council consumers in a streamline process10651 towards alternative and affordable solutions to losing their property to foreclosure. The state will keep more money here as property taxes will be generated and local banks will increase business as most10668 foreclosures are owned by a few large lenders who are currently10673 registered out of state when when Hawaii10677 instituted a similar procedure.10679 These positive, the10681 effects were10682 seen within a10683 few months given proof that this is needed, worthwhile and beneficial to many sectors10689 of the10690 society. I thank the committee for allowing me time to speak in behalf of these bills.10697 I'm. Mhm. Yes,10702 thank you and welcome all10704 the members of the panel to speak. Hi, my name is Gary Yard. Okay. I'm10711 in support of H 1073 and age 11 44. Uh These two bills are10720 for mediation10722 and10723 resolution of creation. I was forced. I was illegally tricked to
10731 to10731 sign a document10732 called the mortgage and that did10735 not access my10736 mortgage. And also I didn't know10739 that medication electronic registration system called Murphy was involved. And as part of the that I did not know.10749 Uh I was told10753 that my the mortgage electronic registration system were illegal and that was part of the facts of the case that is still on going on on10765 the court. Um Also the document called the securitized trust not in existence.10774 That's one of the documents that they10777 relied banks rely on uh foreclosed the10781 house and to claim that they owned the the note to the house. Um the value of my house10791 were were10792 spiked um higher than the real value of the House. Uh so it became Pretoria besides other violations that the bank had done. Um
mediation will help other people um to uh to make sure that we will get justice10815 and also a fair uh hearing Political has a 90% success rate. Also the town of Lynn over 97% rate. Um so if they
legislation and other people would hope to pass this bill, it will be invaluable10840 for a lot10841 of homeowners um and to start the illegal10844 foreclosures and all of the legal mortgages that10850 have been going through. Um Also10854 in my case10855 they10856
it was stopped for almost10860 a year. Do because they the court did not10866 notice that10868 the the existence of illegal um Moore G. Or lenders,10873 sorry, and they did not know what to do10877 about that. If the if these two bills were available back then they probably would send it out to um to make10887 a different decision10888 in favor of a Moore fair. Um
10895 Help10895 for all of us. Thank you for the10898 committee for hear10900 me out. And so let's Day Thank you. Thank you. I10905 appreciate your testimony.
10909 Good10909 afternoon. My name is10910 thomas suchodolski of Amherst massachusetts. I would like10913 to thank for the10914 opportunity to speak today in support of bills H one oh 73 and10918 H 1144, my wife and10921 I fell victims to predatory practices of out of state financial institutions10925 that participated10926 in a scheme to originate our predatory mortgage loan, Securitized it later to concoct10932 a predatory loan modification and ultimately, to foreclose10935 on our property. We were offered a predatory mortgage loan. Real loan to value ratio was estimated at one10942 of five within a few days of the closing. The mortgage was sold10946 for securitization. It should never have been securitized because it exceeded10951 90% loan to value threshold allowed by the10954 pooling and servicing agreement. Pooling and servicing10957 agreement document was never properly executed, undermining the legal existence of the entity that claims to10964 own my mortgage, collect the mortgage payments and bring10967 the legal actions such as foreclosure. The auctioneer who run the auction10972 of our property kept mispronouncing the name of the for closing10975 entity. Deutsche10976 Bank, calling it a dutch bank. How appropriate the10980 world. Duchin french is wash and10982 Deutsche Bank accordingly. To numerous public media reports, has10986 been involved in10987 money laundering schemes around the world.10989 Uh They were four10992 attempted mortgage assignments by this entity of our mortgage. They were signed by robo. Signers investigated by FBI. First three assignments were void for11002 various reasons. So11003 Deutsche Bank attempted to correct them by11005 a confirmatory assignment, which legally could not correct the previous void assignment As to11012 the alleged possession of the11014 wet ink note which11015 we asked to see the obstacles11017 were incredible. First, the11019 servicer11019 tried to11020 extort $500 for the privilege of viewing the note. We had to travel across the country to view the wet ink note that the services location there we were presented with11031 a pristine document alleged original wet11034 ink note, No creases, no faults, no staple11037 holes. The four loose pages11039 have never been11040 bound together or handled by human hand in there. 15 years of alleged existence. When we11047 asked the view the note again,11048 for some reason, we were shown a different version of the11051 note document that appeared to be older since it had some signs of where So an important11057 question remains. How could there be more than one or11060 more original wet ink notes? Now Deutsche Bank, this foreign financial institution of dubious reputation, attempts to reap11068 benefits of selling11069 our property and robbed the state of massachusetts of its ability to grow the tax base and to stabilize the eroding home11076 ownership and affordable housing communities. In closing. I want to speak for several seconds11081 to the need for the foreclosure mediation based on my example, we applied for a loan modification three times denied, two11089 times Paid thousands of dollars in a so11092 called trial modification11093 fees. 3rd application was finally11096 accepted, but when the offer came down, it11099 was take it or leave it with no possibility11101 to discuss or negotiate the terms it was predatory. Again. The entire past year amount was capitalist,11108 no principal reduction and there was a huge balloon payment at11112 the end. Thank you for your attention and11116 please report these bills favorably out of this committee. Thank11119 you so much. Thank11121 you. Tommy appreciate your testimony.11122
Hello. My name is Marnique Rivera. I live in Pittsfield, mass. I'm11130 in our end of 26 years.11132 I'm a single mom of two11134 Children. eight and 13. I've been trying to fight for11137 my home for the past 5.511138 years after11139 purported foreclosure of a loan that never existed, they have demolished our lives which I will11144 continue to fight for11145 as long as I am breathing. I'm in support of bills H 1011148 73 and H 11 4411150 on june 29 2000 and five11153 I signed what I was11154 told was a legal mortgage with a company11156 that it now turns11157 out has never11158 legally existed. The only other party which11161 again I never was told11162 about in the mortgage was the mortgage electronic registration11165 system, which is and which is only an um11168 an agent for the party that you are assigning the mortgage with and the party11172 that I signed with the mortgage with11174 does not exist. So why am I speaking11176 in support of the11177 resolution,11177 Trust fund and pre foreclosure mediation.11179 It's because without a mortgage11181 contract because it was signed with11183 no one. They11184 went through all of11185 the appearances of a11186 foreclosure by sale five years ago and I've been fighting11189 ever since. If there have11191 been pre foreclosure mediation, they would11194 have had to show up, they would have had to prove that they were the mortgage e to a mortgage that does not legally exist. They would have had to show up in with the note11202 which I11203 still don't have not seen the original of. They Give me this11206 eligible unreadable copy to try to verify that it is still the legal11210 original note with11211 my signature on it.11212 I have a right to11213 the original wet ink.11214 Know all of this mediation would bring out into the open, the appraisal was illegally overinflated. So the mortgage was well over 100% of the real value11223 of the property. Mediation would11225 have allow me to raise11226 all of these issues and hopefully solve11228 them even11229 now, almost six years into a lawsuit a year ago under11232 Covid they offered me to do a loan modification. Apparently it came back11236 with me being approved. However, the11238 lawyer has literally never been willing to show11241 it to me so that we could negotiate a settlement again. Mediation would force this situation separately11247 given that11249 they don't own the11251 mortgage11251 since nobody11252 apparently owns this mortgage. A process that would transfer it to the state would again force the principle to be written down to11258 the real value of the11259 house11259 with affordable11260 payments. I11261 could afford it. In fact, I11263 actually had the 43,000 that I needed to stop at11266 the purported auction when the purported auction happened11269 without my ever having11271 had notice of11272 it. But when I contacted to terrorist the servicing company, they had said they couldn't accept11279 any payment that there was nothing they could11281 do to help me. Also,11282 the law firm handling the purported oxen11284 said that they also could not do anything every step along the way. Intervention and transparency11289 would have made a difference for these reasons I am in11292 support of both bills. Thank you11294 for hearing me. Thank you. Appreciate11297 your testimony.
11304 Talk11304 to anyone on the panel11305 to Yes. Um
Good afternoon everyone. Can you hear me? Yes,11315 we can. Thank you. Thank you.11317 My name11318 is Maggie Philippe. I have been a homeowner in Brockton for 32 years. I am11323 the informal coordinator for a small group of homeowners called the Broth and foreclosure fighters who11329 are also supported by the mass alliance against predatory lending. I am testifying today in strong support of Bill H 10 73. An act to11338 establish resolution trust fund and also11341 supporting Bill H 11 40 for an active facilitate11345 alternatives to foreclosure.
I am11349 fighting against wells Fargo who claimed to own the mortgage of my home, relied on an illegally11355 fabricated in blank assignment of mortgage11358 to wrongfully foreclosed on my home into recently attempt to evict my family which now11364 includes my three week old granddaughter. On all evidence shows11368 that they could not possibly own11370 my mortgage. The resolution trust fund bill is lucrative. And even though it's late in the game11377 for me, it11378 doesn't need to11379 be for the millions of homeowners slated11381 to lose their homes and the upcoming delusion of foreclosures. I had a severe car accident in 2015, it11390 was denied a modification five11392 times while I recuperated11394 from my11395 injuries, which of course led to foreclosure. I desperately needed11400 one. My mortgage was from option one who11403 has sued and11404 determined to have given thousands of predatory loans such as mine, which were typically racially discriminatory, which also11411 rumors of foreclosure unenforceable. If the11415 resolution trust fund11416 was available to me, then it would be clear that was filed. Those securitized11420 trust don't legally11422 exist based on Securities and Exchange Commission. A11426 legal trust is11427 not allowed to take those kinds of mortgages. Even if11430 it did exist. My case is similar to the most famous SJC's11434 decision by bayonets at mediation. The bank would be11439 required to show up women enforceable mortgage which they have had11444 to prove was11445 gotten through legal assignment11446 and prove themselves in existing legal entity. And have to show the original note. We would also11452 address the racial discrimination in the origination of my loan and mediation. My predatory mortgage that was priced beyond the real value of the property would be rewritten.11462 My11463 mortgage will be back11464 to real value with an interest rate11466 I could afford, I would get a refund of my11469 hard earned money from the sham securitized trust and my mortgage would11473 be fixed. Please save the tens of thousands of families who will unfortunately come behind me From in Germany and justice that many families like myself my currently going through. I urge you all to take a closer look and help pass bills H11490 1073 at age 1140 for11493 the people of Massachusetts need the protection of these11497 bills. Thank you for having me today. Thank11501 you Maggie. We appreciate your testimony. Any uh, other11505 members of the panel, please feel11506 free to step forward and speak11507
11510 for.11510
I believe you're muted.11515
Yeah. J I believe you're muted if you're trying to speak okay, but
thank you for11530 allowing me to appear before you today. My name is jay lively11533 from Plymouth massachusetts in february of last year. My house was supposedly11538 auctioned oft prior to the auction. My efforts to modify my mortgage11543 were11544 approved and then withdrawn11545 by the servicer. I had11547 no recourse as11548 there was neither accountability nor oversight such as11551 might be afforded to homeowners11552 and house Bill 1140 for which you are considering. Presently11558 the Circuit11559 Court of Appeals is considering a nine a petition that I filed in june this year challenging11564 the standing of the parties claiming11566 ownership to my mortgage11567 briefly. The facts are, these in october 2006 I signed what I11573 was11573 told was a mortgage with Fremont investment and loan.11576 three months11577 subsequently went bankrupt in 2008 In11580 February of 2007 securitized11582 trust. I oppose pilot founding documents with the11586 sec. The documents creating the securitized trust are known as pooling and servicing agreement. PsA. This 2007 documents has filed with11597 the sec remains un executed under massachusetts law for various reasons, including signature11603 lines for the parties11604 to the agreement include no original nor electronic11607 signatures. The signatory fields future, no location nor11612 actual date by11613 each and no notary signatures11615 exist in11616 the execution section of the PSA.
11620 Even11620 if the securitized trust had been11622 legally executed the closing date for11624 the mortgage To be admitted in the securitized trust was in November 2006. Finally the loan to ratio loan to value ratio of my mortgage identified, disqualified11635 it from the securitized trust me the trust owned criteria
and February 2012 Merge11644 allegedly assign the mortgage11646 to the securitized trust. How11648 could fremont authorized murders to11650 assign my home, my11652 loan Two securitized trust. If three month had been out of business since11656 2008.
Um, and there are11661 also problems with the11662 assignment, doesn't have a corporate seal has enlisted consideration. It fails to name the and include the name and address of the mortgage broker and it was11674 not registered the day it was executed
11678 the11678 book11679 big Sure if I Michael Lewis and Michael moore's film11682 capitalism, a love story, help me11684 understand what happened to me and many other massachusetts and U. S. Homeowners, predatory loans are made11690 securitized and sold to investors. The banks selling these11694 securities were so confident11695 that the securities were going to fail that they took out insurance policies on11699 set securities down goes A. I. G. So not only these11705 securitized trusts get paid on the11707 fall to the predatory loans via egg, but almost always took possession11711 of the house is that they did not legally own and turn around and sell these properties to. My hope is that H1073
may help house may help thousands of homeowners who are11723 who currently do11724 not understand that their11725 mortgages have been hijacked11726 by securitized trusts. Thank11728 you. Thank you jay. We11731 appreciate your testimony.
All the members that could have handled it11740 would like to speak. Mhm. Hi, my name is Grace Ross and I'm sorry, I was having problems getting11748 myself a muted and and visible. Um I'm the coordinator of the mass Alliance against predatory lending. I speak in support of the same two bills that the rest of the panel has been speaking on11760 and thank you very much chairs and11762 committee for11763 hearing me and what a blessing. Uh, Senator Crighton to have you chairing this committee this year11770 with these critical bills11771 before you. Um,11773 the foreclosures unfortunately are ramping up very quickly as the covid moratoriums are um, you know,11784 lifting and um The11787 pipeline of foreclosures is quite horrifying. Um there's some 4000 that are, are in some11797 stage of being scheduled. We're told there's another 26,00011800 people who are in11802 the foreclosure pipeline directly in another 100,000 who had forbearance is households in massachusetts uh during the 1st 15 years of11811 the crisis, uh massachusetts experienced about 100,000 foreclosures11816 um and that11818 you will remember was a tsunami effect and we are queued up for another possible round. Um The two bills11826 that were fighting for11827 would make a dramatic difference um for all of those homeowners. Um I don't know if11833 folks testified before,11834 but um pre foreclosure mediation has existed in Connecticut with a success rate of over 90%11841 of taking people out of the foreclosure pipeline.11844 Um Lynn massachusetts, uh the only city in massachusetts as a nonjudicial foreclosure state11851 to have had11852 mediation for a period of time before the uh and and11857 Senator Crighton can take credit um uh before was shut down because of a decision from the SJC that Actually may or may not have have had to stop it, but 97%11868 of homeowners were getting um affordable uh uh loan modifications out of a mutual agreement process um f h a underwritten mortgages actually require face to face negotiation. This bill is better because it11888 would provide a neutral mediator, But the reason has had that policy in11893 place for more than 30 years is it is the most proven effective11896 way11897 to resolve a foreclosure situation was a face to face negotiation11903 and we had the benefit of a neutral mediator and several11907 other proven um, uh, elements for a successful mediation program. As for the resolution trust11914 bill, um,11915 it will be a game changer. Um, it's hard for those who are not in the weeds to believe11921 what we see every day.11923 But I've11924 seen hundreds of founding documents for the supposed securitized11928 trusts. They claim to own 30% of mortgages in Massachusetts. And yet11934 I've never seen a founding document that actually founded the securitized trust, the Ibanez case. The famous case from11942 the SJC actually created a standard of11945 what what they considered not fully executed and11949 I've never seen a pooling and servicing agreements, execution pages that um, surpass what the SJC11956 said was11957 inadequate, So 30% are in that position.11960 And then there's11961 a ton of people with Fannie and Freddie Mae-backed mortgages actually owned mortgages. Fannie and Freddie required their services not to admit in the public record that these are Fannie11972 or Freddie loans and yet Fannie and Freddie loans have a 25% success rate.11978 I mean that's11979 33%,
Um, success11983 rate on affordable loan11985 modifications. Everybody else only has a 25% success rate. So if mediation flushes out Fannie and Freddie, it'll uptake people's success, even without the benefits of mediation and the Resolution11998 Trust Fund11999 is going to force all of the folks hiding and allowing12003 for um unjust enrichment and illegal um predatory loan collection and12009 foreclosures um to have to come out of the woodwork or else the state is going to be able to12015 intervene and finally settle the market um create a reliable revenue stream, create a predictable payment12023 schedule for people and actually make loans that are the ones being foreclosed right12028 now. Still from the bubble12029 years that12030 are predatory under massachusetts law have probably always12033 been illegal, many of them discriminatory12035 and12036 this bill would set all of that two12038 writes the12039 combination is12040 a winner combination and we really hope that the committee will report them12044 out favorably. Um and if you can help us by naming anybody else who's on this panel, uh, that hasn't spoken now, we appreciate that. So um is12054 Charles, caracas caracas, they're just about,
he is on Charles, are you able12066 to get it to work?
Um we12072 can hear you Charles. Okay,
about now. The we can hear you. The floor is yours Charles.
Mhm. Okay. Uh Mhm. Uh mr Chair committee members, I thank you very much12089 for hearing12090 my testimony today. Um
I am Charles paris Kasai live in holbrook massachusetts. I am a former teacher, our teacher in the mass public school systems for over 20 years. And my situation is I am in support of House bill number 114412113 primarily And also greatly12117 supports house
Bill 1073. Uh My situation12123 is this um
my uh my mother uh took a12129 series of loans but12130 the one I am home12131 loans, mortgages12132 but the one12133 I am dealing with now She12135 got in 2006
When she was12139 82 years old. Mhm. Uh she had a stroke and she passed away 201212145 and uh12147 I being the personal representative of her12150 estate uh petition or actually sent the servicer at that12156 time In 2013 all the required documents and they approved me12162 to receive12163 all documentation that my mom would have12167 gone. That changed in 2015 for12171 one reason or another where the uh the successor servicer asked12177 me to repeat the process of12179 mailing in all documentation12180 which I did and all uh successive uh services and any agency involved with this12191 uh predatory12192 loan made the same request, I had to repeat12196 and keep12197 sending in the documents12198 and each time they raised the bar12201 And currently or I should say the last notes I got in uh December in January of 2022021.
They asked12214 for a copy12215 of my mother's will, the property deed and even a photo I.12220 D. Of myself.12221 Mhm. I strongly feel That uh these house bills 1144 and 1073
12234 would12234 not only help myself12235 hopefully, but people that follow me, uh12239 not to go12240 through this uh stall tactic of these services and these agencies raising the bar and stalling until the inevitable the foreclosure and the sale of our in my case my childhood home uh and a great part of my life and hot. I thank you very much for letting me uh present my case and thank you again.
Thank you12272 for12272 your testimony. I believe12273 that it for people on this panel that are on the12276 line if I'm wrong, please uh speak up now.
I'm sorry sir. Uh Sir,12286 I'm I'm pedalling a sinus infection in my my hearing is compromised.12291 Could you repeat12292 it please? Yeah, sorry about that. I was just saying to the to the panel. I believe that I've we've heard from every member of the panel that12299 is on this call. So with that I'm going12301 to ask any questions from12303 members of the committee.
I do not see any. So I thank the panel for your testimony and12311 for your hard work on this issue. I'd like to now welcome David Read testified.
12322 Yeah.12322 Chair Murphy Chair Crighton and members12326 of the Joint Committee on Financial Services. Uh I'm12329 here to testify today on Senate Bill 663 and House Bill 1168. The debt collection fairness Act. My name is12338 David Reed. I'm general12339 counsel at the receivables Management12341 Association International where the nonprofit trade association that represents banks, credit unions, uh collection agencies, debt buying companies and collection12353 law firms. Uh we are currently opposed to Senate Bill 663. Um but the good news is12362 that there is far more that we agree with uh folks on this bill12369 then we disagree on.12370 Um We agree with12373 the reduction of the post judgement interest rate.12376 We agreed to the12377 elimination of the copious warrants. We12380 agreed to the reduction of the12382 statute12382 of limitations. We agree to prohibiting reviving of out of state debt. We agree to prohibiting suits on out of state12391 debt. Um and we also agree12393 to reducing the period for action on a12396 judgment um from 22,12398 10 years. Um there really is only one major substantive area that we are in disagreement on and a couple12406 of minor issues. Um but the one uh major substantive issue that we have not found common12413 ground yet um with the advocates12415 on this bill is in relation to garnishment, but we are very hopeful that with some12422 additional conversations that are taking place, that we can find common ground on the issue of garnishment. And I look forward to a12430 point in the not hopefully not too distance future that I can testify in support of SB 663 and HB 1168. Um uh As I said, we do look12443 forward to the continuing uh conversations uh and I12447 personally want to thank uh Chairman Murphy for his assistance in getting the12454 negotiations going on this bill. Uh this bill was introduced in 2014 and12459 it wasn't until last12460 year with chair Murphy's12463 assistance that we really12465 got the negotiations started. Um and12468 uh it took us quite like quite a ways as you can see with the items that we already agree with.12475 So uh that's uh that's all I have12479 for for12480 today's testimony. I'd be happy to answer any questions. Should you have any thank you. Thank you David12486 testimony. Any questions12488 from the committee.
Seeing none. Thank12493 you again, I'd12494 like to not welcome uh Barrett to apologize for the mis pronunciation of your name.
Um So jean do brother johnny their hear me, Yep.12512 The 40. Thank you. Yeah, thank you. Chairs Crighton and12517 Murphy for the opportunity12518 to testify today. I am jean Barrett a member of the tunica biloxi tribe in Louisiana and a resident of Jamaica plain. I serve as a member of the executive committee of black12529 mask coalition and as president of the12532 north12532 american indian center of boston or niqab12534 nay Cobb is12536 uh massachusetts oldest urban indian center. We sit on the massachusetts environmental justice table12543 and we are a member12544 of the mass renews alliance steering committee. I'm12547 testifying today in strong support of S12550 665 H 12 to 3 enacted to establish12555 a massachusetts public bank. I asked the12558 joint committee, vote the bill out favorably out of committee. This bill is important to indigenous peoples who are residents of the commonwealth and as members of their own nations, because12568 it promises to quote address the historic and current economic inequities experienced by the state's communities of color but their neighborhoods and their enterprises through affordable financing specifically, Niqab12581 strongly encourages12582 the appointment of indigenous peoples to the board of directors and the board12586 of advisors. We offer this12588 recommendation due to the stated priorities of the public banks such as environmentally conscious financing, Climate change amelioration, Environmental justice, sustainable agriculture and Food Security. Further, Nabokov continues its over 50 year history of providing cultural and social services to the new England native american community by operating an employment and training department, particularly serving low income workers. There is no environmental justice without indigenous peoples. While our community members continue12619 to be disproportionately impacted by12621 economic inequities exacerbated by12624 the COVID-19 pandemic. The consensus12626 around divestment12627 from fossil fuels12628 is clear. This demand is12630 directed towards the world's 60 largest banks whip afford $3.812635 trillion 2015.12636
Strong indigenous participation in the board of directors and the on board of advisors will ensure the goals of the public bank and improve government to government relationships with indigenous nations with whom12649 the commonwealth has historic and current obligations. Thank you for your time12653 and I asked the joint12654 committee of both these bills out favorably,
thank you,12658 jean,12658 Luc appreciate your testimony.12659 Any questions from members of the12661 committee.
So you know, thank12665 you again. I'd like to now welcome12667 Debbie Souza to testify. Thank you so12671 much. Chairman12672 Crighton Chairman Murphy Members of the joint committee. My name is Debbie Souza and I represent12677 the massachusetts mortgage bankers association.12679 I12680 appreciate the12681 opportunity to provide you with both written and oral testimony. There12685 are seven bills12686 of interest before the committee today impacting the mortgage industry. Five of these bills, the MMB a strongly opposes House 10 35 House 10 7312697 House 10 77 Senate 6 30 And Senate 703. All of these bills are refiled from previous sessions. Many have been left over from the subprime financial crisis. Um since that time there's been numerous federal and state laws enacted um including new protections because12719 of the pandemic. Um12721 I know people have referenced the tsunami that's um going to be happening12726 because of12727 people exiting the covid um12730 for variances. But massachusetts will soon um have 178 million and half funds to hopefully assist those consumers that our current12741 coming out of for parents. Um there are two bills that we strongly Support12746 house 1142 and house12749 1146 um in regards to 1142, we strongly support this. Um um we have the highest licensing fee in the country for mortgage loan originators. This legislation would lower the annual licence fee12764 from 500 to 300,12766 but only for those mortgage12768 loan originators working for companies. Their headquarters in Massachusetts based upon annual reports provided by the division of banks. We know that 90% of those licensed12780 Afrin companies12781 headquartered outside of massachusetts. We strongly support lowering12786 this annual licensing fee,12788 but just from mortgage loan originators that are working for12792 for massachusetts companies. The second bill is House 11 46. Uh, you have already heard earlier in the beginning of this hearing, compelling12803 reasons why seniors need to be allowed the option of video or telephone telephone conferencing, uh, for a reverse mortgage counseling. There's capacity issues, there's convenience, language barriers, quality of education.12818 We respectfully Remind the committee that a study was filed with the House and12823 Senate on this very subject in 2015 and the12827 conclusion was that it would be appropriate to allow12830 a teleconference option. We Strongly support house 114612835 and request that this12836 bill be expedited12837 and reported12838 favorably out of committee to permanently allow video12842 telephone conferencing. If the mmb a12846 can be of assistance12847 to any bill before your committee. Please let us know and thank you for12852 this opportunity. Wow. Perfect timing. Debbie, thank you12857 so12857 much. Thank you Members of the committee,
seeing none. Thank you Debbie, thank you. We have gone12868 through a list of those12869 who have signed up to testify today. I would open it up to12874 anybody who was on the12875 line. It has not has not testified, but it12878 wishes to do so. Now.12879
You can speak up12882 or use the raise hand function.
All right. Uh, seeing none, I will entertain a motion to12894 adjourn this hearing, so moves here a12898 second over there and the committee12900 hearing is adjourned. Thank you everybody.
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