The Legislature wrapped up their 2008 year with an all night session that provided a remedial bill to clear up some discrepancies in the new MBT/FIT tax bill. A handful of legislators will return on December 30 for the formality of final adjournment. The MBA worked closely with legislators and the administration on the following legislation.

The change to the MBT/FIT relates to a disconnect with the statute and the forms developed by Treasury. It exposed the banking industry to over taxation. Bankers and tax professionals on the MBA Tax Committee took immediate attention and traveled to Lansing to support the MBA advocacy team who remained at the Capitol all night to see that bankers’ interests were protected. The remedial bill, passed in the last minutes of session, awaits the Governor’s signature. This provides Treasury the confidence to resolve the matter.

Bills allowing bank trust departments opportunities to provide services for managing cemetery trusts were passed during the late night session. The MBA supported this legislation which will improve handling of these trust monies and provide greater protection to the public.

Two bills making products such as those offered through the CDARS program available to public sector deposits were signed into law by the Governor.

Allowed in Michigan as an insurance product for nonpublic sector deposits, the legislation confirms the use of products like CDARS to insure public funds deposited in Michigan banks. The products allow banks to provide customers with the opportunity to secure large deposits (from $10,000 to $50,000,000) in FDIC insurance coverage at a single bank by exchanging identical deposit amounts among banks.

The mortgage foreclosure bills died this session. They will be re-introduced with priority next year. Although they are much improved, the MBA still opposes them.

The U.S. Department of the Treasury’s Go Direct campaign is announcing a new recognition program for financial institutions that go the extra mile in promoting direct deposit to senior citizens, people with disabilities, veterans and other members who receive federal benefits. The six-month Go Direct Community Ambassadors Program launches in January and is aimed at community- and medium-sized financial institutions. The program is simple to implement and provides banks with a flexible way to demonstrate their commitment to the community’s financial health while gaining recognition from Treasury’s Go Direct campaign. All banks are invited to register online at http://www.godirect.org/by January 31, 2009.

Thirty-six percent of consumers think the banking industry should be regulated more, up from 20 percent a year ago, according to a recent Harris Poll. The survey also found that the percentage of consumers who think banks are "generally honest and trustworthy" dropped from 30 percent in 2007 to 21 percent this year. But consumers still trust banks more than most other industries, with banks ranking third behind hospitals (31 percent) and supermarkets (30 percent).

The survey results indicate the atmosphere banks will face in Congress next year, as pressure mounts for policymakers to overhaul financial industry regulation. Regulation is needed for the nonbanks that caused the subprime crisis, not traditional banks that never made toxic subprime loans. Bankers can help make this case with policymakers by participating in the ABA Government Relations Summit, March 30-April 1 in Washington, D.C. The summit is open to all bankers, and there is no registration fee. Register

The MBA has been tracking Senate Bill 834 which recently passed and was signed by the Governor on December 17. The bill provides for a financial literacy course as a permissible mathematics course under Michigan merit standard for high school graduation. This is a positive step for the financial industry and financial literacy education.