Dec. 4, 2003 The Senate Finance Committee delayed a long-lingering bill Tuesday that would bring the territory's banking laws up-to-date, passed another bill also long on the table that would regulate the territory's investment, securities and money-laundering laws and voted down a redundant funding measure for the University of the Virgin Islands.
The committee also approved a number of federal grants and agriculture leases.
The Financial Services Act, which would regulate banking in the territory, was postponed for possibly a month since banking and government officers were at odds over a usury provision in the law, the setting of interest rates on mortgage loans.
The legislation to change laws not substantially altered since 1968 has been on the table since the Schneider administration. The bill's sponsor, Sen. Lorraine Berry, was not pleased at another delay. "While we welcome criticism, we need to get this bill enacted," she said, describing its progress as comparable to "molasses."
Cassam Pancham, Virgin Islands Banking Association president, said, "We are all in agreement that the banking laws of the territory are greatly in need of change." There are various provisions that are simply outdated and other changes that are needed to reflect the enormous changes in the banking business, he said.
One of those changes is in the current usury statute. It is "complicated, unworkable and unfair to Virgin Islands consumers," Pancham said. Deverita Sturdivant, director of the government's Division of Banks and Insurance, disagreed. "We cannot support changes in the usury law," she said. "People should have a choice."
Sturdivant said the banks want the usury section eliminated. "We can't let them set a mortgage rate of their own choosing," she said. What the banking association wants, Pancham said, is a variable rate for interest on mortgages and loans.
Currently, if a person buys a house with a several-year mortgage at a fixed rate, that rate never changes, regardless of what the market does. The bankers want to charge a variable rate whatever the market will bear. Sturdivant said the Lt. Governor, under whom she works, says no.
Both sides said they are hopeful of working things out within about a month's time. "We're almost there," Sturdivant said.
"We have a bill that's pretty good, but we want to get a balanced bill," Pancham said.
Sen. Adlah "Foncie" Donastorg, committee chairman, said the Senate will meet in full session Dec. 17. He expressed hope the measure could come to the floor at that time.
The 65-page document would effect several other changes. It would regulate the operation of automatic teller machines in the territory. It would set up a Financial Services Fund, with 25 percent of the ATM fees going into that pot. Recently, new ATMs have appeared on the island. Those in K-Mart and Cost-U-Less charge $2.50 per transaction.
The bill would also allow corporations, partnerships and limited-liability companies to become legal banks, in keeping with current federal changes in banking laws. When Pancham called the laws "antiquated," no one disagreed. Backing Pancham's description of the current laws as "antiquated," a section of the bill amends the Securities Exchange Act of 1934, eliminating the outdated blanket exceptions for banks from the definitions of "broker" and "dealer."
The committee passed the Uniform Securities Act, a three-part bill. The first, as described by attorney Tom Bolt, Virgin Islands Uniform Law Commission chairman, would set up regulations for securities dealers in the territory. He said there is little regulation of these dealers at present.
The second section, the Uniform Money Services Act, would regulate non-bank financial institutions companies that wire money out of the territory, provide foreign-currency exchange and cash paychecks. "Look around Market Square at the non-banks," Bolt said. "They operate with no regulations." He pointed out that the Sept. 11 terrorists' money came through similar institutions because of the lack of regulations.
The third section, the Uniform Prudent Investors Act, would provide oversight for investors who have money in portfolios and mutual funds.
In an ironic twist created by two separate branches of government, UVI inadvertently received double-funding for startup costs of its Research and Technology Park on St. Croix. The university usually finds itself pleading for additional money.
Earlier this year, the Legislature had appropriated $2.5 million to support the park from the Insurance Guaranty Fund, which Gov. Charles W. Turnbull had line-item vetoed, saying he didn't want to "raid the IGF." He sent another bill providing funding from the General Fund, which was tabled Tuesday.
In the meantime, the Legislature had overridden his veto, rendering the governor's current legislation redundant. "Since this has already been dealt with," Donastorg said, "we still have to dispose of this legislation from the committee."
UVI President LaVerne Ragster said, "To the extent that the $2.5 million in funds for support of the park will be released to the university in its entirely as provided for under Act 6585, the university will not be seeking additional funds for the current fiscal year." However, she did recommend to the committee that "double-funding" be made available to the university for support of the regular operations of UVI for the current fiscal year.
Malcolm Kirwan, UVI executive director for the technology park, said now that the university had received $1 million of the $2.5 million appropriation, progress, which had been temporarily stalled, will be moving "full-speed ahead."
The committee approved more than $7.2 million in federal grant applications, mostly from the Environmental Protection Agency to the Department of Planning and Natural Resources.
V.I. Election System, $100,000 for an election assistant for individuals with disabilities;
DPNR, $20,000 for bio-criteria development;
DPNR, $301,483 for beach monitoring;
DPNR, $40,000 for TPDES permit compliance system customization and GIS enabling;
DPNR, $70,000 for a sewage infrastructure research and demonstration project;
DPNR, $2,790,800 for drinking-water capital infrastructure;
DPNR, $79,836 for islands chemical Superfund site;
DPNR, $50,000 for the Underground Storage Tank Trust Fund;
DPNR, $61,500 for nutrient criteria development;
DPNR, $400,000 for water quality management planning;
DPNR, $46,119 for Tutu well field site;
DPNR, $2,889,963 for Fiscal Year 2004 Performance Partnership;
DPNR, $100,000 for a voluntary cleanup program; and
Fishermen's United Service Cooperative of St. Croix, $998,070 (purpose not specified).
The committee also approved government leases to: Henry P. Schuster Jr. (agriculture); Fillmore Haywood and Algernon Baltimore (agriculture); Dorothy Gumbs, deceased (agriculture); Etien O. Frett and Nidia Ocana-Frett (agriculture); V.I. Christian Ministries Inc. (agriculture); Ronald A. Krigger Sr. (agriculture); John Schulterbrandt (agriculture); Sheila Schulterbrandt (agriculture); St. Croix Farmers in Action Inc. (agriculture); Felix Santana, d/b/a Sub Base Wreck Shop; and Matric Enterprises.
Committee members Sens. Roosevelt David, Donastorg, Louis Hill, Shawn-Michael Malone, Norman Jn Baptiste, Luther Rennee and Ronald Russell attended the meeting along with Berry, who is not a committee member.
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