Oklahoma Bankers Association We make bankers better!
We have finally reached the first deadline at the state legislature and it couldn’t have come fast enough.
We started off this session tracking 314 bills and, after the deadline, we are now tracking 70 bills. We will spend the next couple of weeks hearing bills on the floor in the house of origin.
While the first couple of weeks have flown by, it was a very successful first couple of weeks. Bills we were opposed to didn’t get moved for one reason or another. There were three bills that occupied most of our time these first few weeks and every one of them is right where we want them, at least for now.
I also want to give more information that you probably want or feel you need, but there is a good chance we will be reaching out to you at some point to contact your legislators and we want to make sure you have everything you need.
HB 2745 – Oklahoma Rural Lending Act
What does the Oklahoma Rural Lending Act actually do?
The ORLA will lower the cost of credit by removing the taxation on interest earned from ag real estate loans, rural home loans and operating loans in rural communities with a population of 5,000 or fewer.
The ORLA will benefit farmers, ranchers and rural homeowners that do business with their local community bank. Other lenders, including the Farm Credit System, already have this exact same tax benefit. The ORLA simply levels the playing field so farmers, ranchers and rural homeowners that choose to utilize their hometown bank can receive the lowest possible interest rates.
Why is the Oklahoma Rural Lending Act needed?
Inflation is contributing to a rise in input costs and higher interest rates, which is driving ag producers to rely more heavily on credit to finance their operations.
This is making it increasingly difficult for agricultural producers to acquire low-cost credit which is critically important to the long-term sustainability of every ag operation.
Rapidly rising home mortgage interest rates are making home ownership in rural Oklahoma less affordable. Many potential rural homeowners now struggle to qualify for a home loan or they simply can’t afford an inflated mortgage loan payment.
How does the Oklahoma Rural Lending Act solve this?
If adopted, banks across Oklahoma will be able to lower interest rates to ag producers and rural home owners.
Oklahoma banks want to be as competitive as possible so they can offer the most competitive (low-cost) rates to their ag and rural borrowers.
If a bank doesn’t pass along these tax savings by lowering interest rates, they won’t be competitive and will lose market share.
The ORLA will help sustain the long-term presence of rural community banks by making them more competitive.
Sustaining local access to credit is important for the long-term stability of every rural Oklahoma community.
The ORLA will help deter bank consolidation and maintain the local investment and leadership community banks provide in rural towns across Oklahoma.
SB 988
This bill transfers EFS filings from the Secretary of State to the Oklahoma County Clerk’s office.
Why the change?
Desire of the industry (agriculture community and bankers) to have access to real-time data when it comes to EFS (effective finance statement / agriculture liens). Currently there is a 30-day report you can sign up to receive.
Government efficiency – shorter delays for industry partners to receive data
Streamline the process for the customer/client. One location for filings.
Why Oklahoma County Clerk’s office?
OKCC office is already the central filing system for all UCC filings statewide. In 2001, UCC filings moved from the 77 individual counties to OKCC. They had a system and staff ready to take on the additional filings.
Just as in 2001, OKCC office is equipped and prepared to take on the additional workload of the EFS filings.
Q&A:
1. What will happen with all the existing filings? They will be transferred over from the SOS office to OKCC. How long will the SOS have to maintain a separate system for looking up previously filed liens? This is currently being discussed between the SOS office and OKCC. The plan is for there not to be two systems running at the same time. The active liens will be transferred first.
2. Any concern on moving over/transition time and there being discrepancy with order of priority on liens? No. UCC and ESF will both be filed as soon as they are submitted to the OKCC’s office. There will be two different documents, but to the same office. Postings can be finalized 24 – 28 hours (business hours).
3. Will the EFS fees change to be the same as the UCC fees? No, EFS will be the same as they are currently. The only thing that changes is where the EFS is filed.
4. How will the banks and customers become aware of this change? The Oklahoma Bankers Association plans to do webinars and other training for the banks. The Agriculture industry will communicate with their members.
5. Does it matter who is elected to the Clerk’s office? No, one of the main functions of the OKCC’s office is filing and preserving property documents.
Should this bill become law, we don’t know for sure when it will go into effect. As part of the process to move EFS filings from the secretary of state to the Oklahoma County clerk, the clerk must be certified by the USDA.
We have no clue how long it will take to become certified. The bill won’t go into effect until 180 days after the clerk’s office has received certification from USDA.
Even though we will be working on these two bills for weeks, there are still a lot of other bills alive that could have an impact on the banking community.
We’ll keep you posted as we move along.
If you want an up-to-the-minute update on all of our legislation, you should come to one of our upcoming Bankers’ Night Out events. You can find the full schedule on the front page at www.oba.com.