An Update from the State House
Senate Judiciary Committee Passes Anti MERS Bill
On Tuesday, the Senate Judiciary Committee passed S.2543 SubA, An Act Relating to Property – Form and Effect of Conveyances. This legislation would require that all transfers of a mortgage interest on residential property be recorded in the town or city where the property is located. The stated intent of the bill is to provide a clean chain of title for consumers to track the owner of their mortgage loans, but it does so by discontinuing the practice of recording mortgages in the name of a party other than the holder of the note secured by the mortgage. This act would also require mortgage assignments be recorded within a certain time or render the mortgage void, but not nullify the underlying indebtedness. S.2543 basically targets MERS (Mortgage Electronic Registration Systems). As mortgages are sold on the secondary market or as servicers of loans change, many large lenders use MERS to track the changes electronically. It’s simple to use and is efficient for the industry. Anyone can go to the MERS site on the computer, enter an address and find out who holds the mortgage. The Rhode Island Supreme Court, in the most recent decision Bucci v. Lehman Brothers Bank FSB, upheld MERS as a nominee. As noted in the case, MERS doesn’t conduct foreclosures any longer. The Court made clear MERS’ importance in housing financing today. The only state that has passed a bill requiring the recording of assignments of mortgages (but not notes) is Kentucky in 2006; no other state has done so. If passed, companies in the mortgage business fear lenders in the secondary market will not buy Rhode Island mortgages, therefore drying up access to capital for residential property. S.2543 Sub A has not yet been placed on the Senate calendar for a vote. If you have an interest in this legislation, please contact your Senator now!
Senate Judiciary Committee Passes Patent Troll Legislation
S.2542, An Act Relating to Commercial Law – General Regulatory Provisions, also passed the Senate Judiciary Committee Tuesday. The bill seeks to address the use frivolous patent infringement claims to scare companies into paying licensing fees for products when such fees are not actually appropriate. This practice has been particularly harmful to non profit organizations that lack the financial resources to defend themselves in court. S.2542 requires the following information to be included in a demand letter claiming infringement: patent number, name and address of the patent owner(s) or assignee(s), and factual allegations concerning the specific areas in which the target’s product, services or technology infringe the patent. This information is critical to be able to assess whether the claim of infringement is real or if it is a scam. S.2542 has not been placed on the Senate calendar yet.
House Labor Committee Discusses Deductions of Employees’ Wages
Another employee wage bill was heard in the House Labor Committee las Thursday. This time, however, the bill seeks to codify what is already existing federal law. H.7254, An Act Relating to Labor and Labor Relations – Payment of Wages – Unauthorized Deductions, states, “No employer shall deduct or withhold from the payment of wages owed to an employee for the performance of work or other reason set forth in this chapter, any monies not authorized by federal or state law or by court order, without first getting written approval from the employee.” Violations of this law would entitle the employee to treble damages (three times the amount that was withheld from the employee without employee authorization). Employers should be complying with this proposal today. For example, if you are withholding health insurance premium co-pays from employees, the company should have an employee’s signature on a document authorizing the withholding. H.7254 was held for further study, meaning it could be voted on at any point prior to the end of the legislative session.
Below is a list of new legislation that was filed this week. The list contains bill numbers, links to the legislation, and summary explanations.
House Bill No. 8100, AN ACT RELATING TO ALCOHOLIC BEVERAGES - MANUFACTURING AND WHOLESALE LICENSES (Permits holders of a manufacture's license to sell at retail alcoholic beverages manufactured by them known for on-site and off-site consumption and also authorizes the holder to sell up to four (4) growlers per visitor per day.)
House Bill No. 8114, AN ACT RELATING TO STATE AFFAIRS AND GOVERNMENT (Reduces the period from thirty (30) days to six (6) days in regard to the exclusion from the definition of occupancy for any home, condominium or other residential dwelling rented.)