Pub. 13 2016 Issue 4

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G N E W M E X I C O R E A L I Z E D R E A M S Issue 4 • 2016/2017 9 The NMBA is supporting or sponsoring the following legislative initiatives: • Fiduciary Access to Digital Access Act, Revised: A fiduciary is a person appointed to manage the property of another person, subject to strict duties to act in the other person’s best interest. Common types of fiduciaries include executors of a decedent’s estate, trustees, conservators, and agents under a power of attorney. This act extends the traditional power of a fiduciary to manage tangible property to include man- agement of a person’s digital assets. The act allows fi- duciaries to manage digital property such as computer files, web domains and virtual currency; but restricts fiduciary’s access to electronic communications such as email, text messages, and social media accounts un- less the original user consented in a will, trust, power of attorney, or other record. • The Partition of Heir Property Act: The Partition of Heir Property Act helps preserve family wealth passed to the next generation in the form of real property. Affluent families can engage in sophisticated estate planning to ensure generational wealth, but those with smaller estates are more likely to use a simple will or to die intestate. For many lower and middle-income families, the majority of the estate consists of real property. If the landowner dies intes- tate, the real estate passes to the landowner’s heirs as tenants-in-common under state law. Tenants-in-com- mon are vulnerable because any individual tenant can force a partition. Too often, real estate speculators ac- quire a small share of heirs’ property in order to file a partition action and force a sale. Using this tactic, an investor can acquire the entire parcel for a price well below its fair market value and deplete a fami- ly’s inherited wealth in the process. The act provides a series of simple due process protections: notice, ap- praisal, right of first refusal, and if the other co-ten- ants choose not to exercise their right and a sale is re- quired, a commercially reasonable sale supervised by the court to ensure all parties receive their fair share of the proceeds. • Income Taxation of Trusts and Estates (HB 76): The NMBA proposal amends the definition of “net income” for the purpose of the New Mexico Income Tax Act to exclude for estates and trusts, amounts set aside for distribution to a nonresident beneficiary un- der the terms of the governing instrument. • Home Loan Protection Act: The legislation clarifies that a creditor of a home loan that has a legal right to foreclosure may utilize judicial foreclosure procedures provided under a standard mortgage law or nonjudicial foreclosure if the transaction was made under the Deed of Trust Act. Currently, there is a provision on the Home Loan Protection Act (HLPA)which provides that all foreclo- sures must be judicial. The Deed of Trust Act allows for non-judicial foreclosures. Some underwriters have refused to insure title pursuant to a convey- ance of foreclosed property by a trustee pursuant to a trustee’s sale under the Deed of Trust Act because of the statutory conflict between the HLPA and the Deed of Trust Act. Federal Legislation Many in Congress are calling for the repeal of Dodd-Frank. Political insiders argue that the outright repeal is highly un- likely. The Republicans have a comfortable majority in the House, 241-194. In the Senate, however, Republicans hold a narrow margin, 52-46, with two Independents caucusing with the Democrats. Consequently, legislation favorable to banking should move rapidly through the House next Con- gress, but will face stiff resistance in the Senate. It seems clear that the focus in the next Congress will be to revise Dodd-Frank. It is anticipated that the House Finan- cial Services Committee Chair, Jeb Hensarling, will reintro- duce his Financial Choice Act, a 512-page bill providing a comprehensive revision of Dodd-Frank. Likely the greatest roadblock in reforming Dodd-Frank will be the Choice Act’s restructuring of the CFPB as an independent, five-member bipartisan regulatory commission comparable to the FDIC and SEC. An additional proposal will subject the CFPB to the appropriation process. Dodd-Frank stipulated that the Federal Reserve would fund the CFPB without congressio- nal oversight on CFPB spending. Senator Elizabeth Warren will likely lead the opposition to any CFPB restructuring. It is also not clear how the Trump administration will re- act to the banking industry. His banking priorities were not revealed during the campaign. Only time will tell. Other issues before the banking committees include: • Housing/GSE reform • Flood insurance reform • Take away power from the Federal Reserve and allow Congress to audit its decision making • Abolish to CFPB • End “too big to fail” • Temporarily freeze agency rules • Regulatory reform for community banks Other A federal district court judge in Texas has temporarily en- joined the effectiveness of the Department of Labor’s final overtime rule. The Fifth Circuit Court of Appeals has now agreed to hear DOL’s appeal of the injunction on an expe- dited bias. However, the appeal will not be heard before the change in administration. As an aside, President Trump has nominated Andrew Pudzer to be Secretary of the Department of Labor. Pudzer, the CEO of CKE Holdings, the parent company of Carl’s Jr. and Hardee’s, has been an opponent of the overtime rule as well as increases in the minimum wage. n A federal district cour t judge in Texas has temporarily enjoined the effectiveness of the Department of Labor’s final overtime rule. The Fifth Circuit Court of Appeals has now agreed to hear DOL’s appeal of the injunction on an expedited bias. However, the appeal will not be heard before the change in administration.