Date: 02/22/2006

Final
BILL SUMMARY for HB06-1202

HOUSE COMMITTEE ON BUSINESS AFFAIRS AND LABOR

Votes: View--> Action Taken:
Moved a conceptual amendment that would add to the
Moved to refer HB 06-1202, as amended, to the Comm		PASS
PASS



11:12 AM -- House Bill 06-1202

Representative T. Carroll, prime sponsor, presented House Bill 1202. He stated that the bill would preclude the imposition of fiduciary duties and obligations on a financial institution or its officers, directors, shareholders, employees, or agents with respect to a depositor, borrower, guarantor, or surety unless the financial institution has expressly agreed to such duties and obligations in writing. Representative T. Carroll was asked to explain what a fiduciary duty is.

11:15 AM

There was discussion about whether allowing banks to get rid of fiduciary duties in writing would allow them to destroy fiduciary duties that already exist through other case law.

11:23 AM -- Barbara Walker, representing the Independent Bankers of Colorado, testified in support of the bill. She stated that the bill is an extension of the statute of frauds. She explained that historically attorneys have added to their list of claims against financial institutions, and that there was a fiduciary duty between the consumer and the lender. She stated that the appellate courts have not ever upheld that there was a fiduciary duty so the bill limits frivolous lawsuits. Ms. Walker was asked when a lender would create a fiduciary duty under the bill. She responded that there is no fiduciary duty so they would not. Representative T. Carroll explained the four situations where a fiduciary duty would exist.

11:36 AM -- David Emerick, representing HSBC, testified in support of the bill. He talked about a conceptual amendment that would include in the definition of financial institution operating affiliates and subsidiaries of those financial institutions.

11:38 AM -- Pete Kirchof, representing the Colorado Credit Union League, testified in support of the bill. He stated that there is uncertainty in the law today and the intent of the bill is to clarify that uncertainty. He responded to a question about when a fiduciary duty would exist.

11:42 AM

Representative M. Carroll expressed her concerns with the bill and stated that she feels it should be clarified in law whether financial institutions should be clarified in law whether financial institutions do or do not have a fiduciary duty in these circumstances. Representative T. Carroll explained that there is no control over the person by a financial institution, only a money and therefore a fiduciary duty does not exist.
BILL:HB06-1202
TIME: 11:47:57 AM
MOVED:Penry
MOTION:Moved a conceptual amendment that would add to the definition of financial institution, or an operating subsidiary or affiliate of such bank, savings and loan association, or credit union. The motion passed on a 10-3 vote.
SECONDED:Knoedler
VOTE
Balmer
Yes
Borodkin
Yes
Butcher
No
Carroll M.
No
Coleman
Yes
Knoedler
Yes
Liston
Yes
McCluskey
Yes
Paccione
Yes
Penry
Yes
Welker
Yes
Cerbo
No
Marshall
Yes
Not Final YES: 10 NO: 3 EXC: 0 ABS: 0 FINAL ACTION: PASS


BILL:HB06-1202
TIME: 11:52:46 AM
MOVED:Coleman
MOTION:Moved to refer HB 06-1202, as amended, to the Committee of the Whole. There was additional committee discussion about the bill as amended. The motion passed 12-1.
SECONDED:Balmer
VOTE
Balmer
Yes
Borodkin
Yes
Butcher
Yes
Carroll M.
No
Coleman
Yes
Knoedler
Yes
Liston
Yes
McCluskey
Yes
Paccione
Yes
Penry
Yes
Welker
Yes
Cerbo
Yes
Marshall
Yes
Final YES: 12 NO: 1 EXC: 0 ABS: 0 FINAL ACTION: PASS




12:01 PM

The committee adjourned.