Want Subprime Loan? Must Get Counseling, Legislation Says.

By Annapolis Digest
Wednesday, April 2, 2008

The House of Delegates began debate yesterday on a bill to require people seeking subprime mortgages to meet with consumer counselors before signing on to risky loans.

The legislation would mandate that consumers seeking subprime loans meet with independent financial counselors in the government or at nonprofit organizations to ensure they understand the terms of the loans. Proponents say the bill will prevent people from getting loans they do not understand, a factor in the tide of foreclosures.

"These advisers are not there to give financial advice," said Del. Brian J. Feldman (D-Montgomery). They would just explain the terms of the loans.

Opponents said they fear the government is overstepping its bounds in requiring credit counseling.

"The intentions are good, but I am questioning whether this is one more big piece of government intervention that's not really going to work," said Del. Susan W. Krebs (R-Carroll).

The House could vote on the measure today. The legislation, by Del. Stephen W. Lafferty (D-Baltimore County), is among several bills this session designed to slow the rate of foreclosures in the state. Most of the bills were introduced by the O'Malley administration.

-- Philip Rucker

'Tech Tax' Vote Postponed

A Maryland Senate committee postponed action yesterday on a plan to repeal the state's computer services tax to get a better sense of whether members of the full chamber are willing to offset part of the lost revenue with a surcharge on the income of millionaires.

Sen. Ulysses Currie, chairman of the Budget and Taxation Committee, said he hopes his panel will take action today. Currie (D-Prince George's) said this week that he has the votes on his committee to pass a plan by Gov. Martin O'Malley that would impose a millionaires tax, in addition to requiring cuts in transportation funding and state agencies, to compensate for the $200 million a year in revenue lost from repealing the "tech tax."

Yesterday, senators on the panel were trying to gauge support for that approach among others in the chamber and the House of Delegates.

Senate President Thomas V. Mike Miller Jr. (D-Calvert) said in a statement:

"The primary issues seem to be whether to tax income over a million dollars at a higher rate for three years, as we did with the early 1990s crisis, or to reduce the amount of new funding available for transportation projects. . . . Our mission is to find a broad consensus within the legislature to accomplish the goal of repealing the computer services tax."

-- John Wagner

Senate DNA Bill Advances

A proposal to expand Maryland's DNA database to include samples from people charged with violent crimes is one step closer to reaching Gov. Martin O'Malley's desk.

The House of Delegates voted 130 to 7 yesterday to pass the Senate's version of the DNA legislation. But because the House amended the bill, the Senate must agree to the changes before the legislation is sent to the governor.

The vote on the Senate bill was largely procedural because the House passed its version last month.

The DNA bill has been a top priority this year for O'Malley (D). But the legislation is significantly different from his original proposal, which was amended because of opposition from members of the Legislative Black Caucus.

Some lawmakers, including many in the caucus, were concerned about taking DNA samples from people before they are convicted of crimes. In reaching a compromise with the caucus, O'Malley and legislative leaders agreed to automatically throw out DNA samples of people cleared of charges.

-- Philip Rucker

Gansler vs. 'Alcopops' Bill

Attorney General Douglas F. Gansler (D) is fighting legislation pending in the House of Delegates that would classify "alcopops," popular among young drinkers, as beer for sales distribution and tax purposes.

He and others involved in the Maryland Partnership Against Alcopops yesterday criticized the bill to reclassify the sugary drinks, which the industry calls "flavored beer."

The drinks contain distilled spirits, and their sale is limited to liquor stores. They are taxed at a higher rate than beer. But a legislative push by the liquor industry has succeeded in a majority of states reclassifying the beverage as beer, which can be sold in convenience stores.

After a floor debate, the Senate passed a bill this month to reclassify the drinks.

-- Lisa Rein