Arizona House of Representatives Committee on Commerce — Report of Regular Meeting, February 27, 2024 (Fifty-sixth Legislature, Second Regular Session)

Summary

Minutes of the regular meeting of the Arizona House of Representatives Committee on Commerce, Fifty-sixth Legislature, Second Regular Session, held Tuesday, February 27, 2024 under Chairman Justin Wilmeth. The report records do pass votes of 10-0-0-0 on SB1270, SB1296 and SB1271, and records SB1366, on a regulatory sandbox for blockchain, as held. Attachments include the agenda, the Request to Speak report listing those registered on each bill, with many public comments opposing SB1366, and the attendance record. A House bill analysis of SB 1270 describes letting escrow agents use reciprocal deposits for additional FDIC insurance, and an analysis of SB 1271 describes electronic disclosures for rental-purchase property. The document closes with a roll call vote on SB 1271.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature - Second Regular Session

COMMITTEE ON COMMERCE
Report of Regular Meeting
Tuesday, February 27, 2024
House Hearing Room 3 -- 2:00 P.M. OR UPON RECESS OR ADJOURNMENT OF FLOOR

Convened 3:33 P.M.

Recessed VED

— INUTES RECE!

Reconvened oNIEE CLERK'S OFFICE

Adjourned 3:49 P.M. Q/a) &/ad
Members Present Members Absent

Representative Aguilar

Representative Austin

Representative Carter

Representative Gress

Representative Heap

Representative Hendrix

Representative Lucking

Representative Ortiz

Representative Carbone, Vice-Chairman
Representative Wilmeth, Chairman

Agenda
Original Agenda — Attachment 1

Request to Speak
Report — Attachment 2

Committee Attendance
Report — Attachment 3
Committee Action

Bill Action Vote Attachments
SB1270 DP 10-0-0-0 = 4,5
SB1296 DP 10-0-0-0 = 6,7
SB1271 DP 10-0-0-0 8,9

SB1366 HELD

Auton Huphow

Susan Hughes, Committee Segretary
February 28, 2024

(Original attachments on file in the Office of the Chief Clerk; video archives available at http:/Avww.azleg.gov)

COMMITTEE ON COMMERCE
February 27, 2024
REVISED - 2/21/24 REVISED - 2/21/24 REVISED - 2/21/24

ARIZONA HOUSE OF REPRESENTATIVES

Fifty-sixth Legislature - Second Regular Session

(
REGULAR MEETING AGENDA C ONVENES 3433 om

COMMITTEE ON COMMERCE ADTouR NED ° 4; 490M

DATE Tuesday, February 27, 2024 ROOM HHR3 TIME 2:00 P.M. or upon recess or
adjournment of Floor

Members of the public may access a livestream of the meeting here:
https://www.azleg.gov/videoplayer/?clientID=636 1 162879&eventID=202402 1131

Members:
Representative Aguilar Representative Heap Representative Ortiz
Representative Austin Representative Hendrix Representative Carbone, Vice-Chairman
Representative Carter Representative Lucking Representative Wilmeth, Chairman

Representative Gress

Bills Short Title Strike Everything Title
——— Shepe)
RA;RULES

reciprocal deposits; escrow agents; definitions

t SBi270
OP (Mesnard)
1O‘O«0. CEO, RULES

3 SB127} b p rental-purchase property; electronic disclosures
———_ (Mesnard)

1002.99: RULES

a SB1296 D Pp credit unions; formation; loans; membership
——— (Mesnard: Burch, Wilmeth)

10-O:0.()COM: RULES

Y SB1366 HELD regulatory sandbox; blockchain
(Bolick: Fernandez, Wilmeth)

COM, RULES

ORDER OF BILLS TO BE SET BY THE CHAIRMAN

ve
9221/2024
People with disabilities may request reasonable accommodations such as interpreters, alternative formats, or

assistance with physical accessibility. If you require accommodations, please contact the Chief Clerk's Office at
(602) 926-3032 or through Arizona Relay Service 7-1-1.

Page 1 of 1

_ Attachment |
Information Registered on the Request to Speak System

House Commerce (2/27/2024)

$B1270, reciprocal deposits; escrow agents; definitions

Support:
Jay Kaprosy, Arizona Bankers Association; Lauren King, LAND TITLE ASSOCIATION OF ARIZONA (LTAA)

$B1271, rental-purchase property; electronic disclosures

Support:

Jason Barraza, Associate Director, Progressive Leasing; Jeremy Gerlach, Progressive Leasing

$B1296, credit unions: formation; loans: membership

Support:

Austin De Bey, Gowest Credit Union Associaton; Susie Stevens, Gowest Credit Union Association

$B1366, requlatory sandbox; blockchain

Support:

David Kahn, REPUBLICAN LIBERTY CAUCUS OF ARIZONA; Stephen Shadegg, Americans For Prosperity Arizona; Lady
Surprise, representing self; Diana Hawk, representing self; Theresa Breithaupt, representing self; George Momper,
representing self; David Hubble, representing self

Neutral:
Mitchell Smith, representing self

Oppose:

Mary Ann Graffagnino, representing self; Joan Murphy, representing self; kathleen mayer, representing self; Dave
Long, representing self; Janie Hydrick, representing self; Jeanne Devine, representing self; Steve Ramos,
representing self; Judith Simons, representing self; Mary Pradelt, representing self; Denise Link, PhD, WHNP,
representing self; Janet Larkin, representing self; Steven Linder, representing self; Rebecca Smith Gross,
representing self; marilyn duerbeck, representing self; Henne Queisser, representing self; Maria Salvucci,
representing self; Kevin Brown, representing self; Beverly Janowitz-Price, representing self; Eve Shapiro,
representing self; Kenneth Bierman, representing self; Susan Doherty, representing self; Beatriz Urrea,
representing self; Alisa McMahon, representing self; Michael Fiflis, representing self; Sallie Kladnik, representing
self; Cyndi Tuell, representing self; Dianne Post, representing self; Sherrilynn James, representing self; Kathleen
Pettycrew, representing self; Karen Cusano, representing self; Donita Ramos, representing self; Catherine Sigmon,
representing self; Barbara Fraboni, representing se!f; Darrell Boomgaarden, representing self; Eileen Garces,

Attachment A
representing self; Elizabeth Schauer, representing self; Elizabeth Goff, representing self; Gail Kamaras,
representing seif; Charlie Silver, representing self; Ruth Lambert, representing self; Barbara Oliver, representing
self; Barbara Hutchinson, representing self; Becky Sayler, representing self; Susan Morris, representing self; Brent
Gibbs, representing self; Sally Harvey, representing self; Julie Golding, representing self; Christine Keitges,
representing self; Tim Blumentritt, representing self; Lawrence Peters, representing self; Linda Edwards,
representing self; Kathy Fraser, representing self; Mary Martiniak, representing self; Murdock Holloway,
representing self; Carlton Jennings, representing self; Jennifer Jones, representing self; Ellen M. Ferreira,
representing self; Janet Johnson, representing self; Peggy Yeargain-Williams, representing self; Kathy Pyner,
representing self; Duane Ediger, representing self; Liana Moran, representing self; Jim Moran, representing self;
Ron Brinkman, representing self; Cynthia Wagner, representing self; Sherry Massie, representing self; Nancy
Santori, representing self; Robert Larson, representing self; Barbara Larson, representing self; Diane Lings,
representing self; Lori Taniguchi, representing self; Kathleen Woessner, representing self; Jennifer Dawson,
representing self; Robert Fisher, representing self; Eric Kadel, representing self; Margaret Bruns, representing self;
Gary Townsend, representing self; Nora Plonsky, representing self; Paula Kaper, representing self; Sheila Green,
representing self; ALICE BUCK, representing self; Marilyn Murov, representing self; Claire Bickel, representing self;
Joseph Bihms LD29, representing self; Nelson Morgan, representing self; Marilyn Coyle, representing self; Lora Lida
Walradt, representing self; David Patchen, representing self; Matthew Nelson, representing self; Aaron Essif,
representing self; William S. James, representing self; J Nicholas Prestera, representing self; Linda Ekstrum,
representing self; Dorothy Reed-inman, representing self; Carol Waymire, representing self; Rebecca Haynes,
representing self; Lisa Maczura, representing self; Joseph Alexander, representing self; George Ehrlich,
representing self; Margaret Tinsley, representing self; Sharon Ehrlich, representing self; Patricia Edelen,
representing self; Connie Cockrell, representing self; Charlotte Lis, representing self; Stephen Coyle, representing
self; Jerrold Borchardt, representing self; Dana Garcia, representing self; Karolyn Switzer, representing self; Anne
Leota Hart, representing self; Kathleen Sauer, representing self; Margaret Adams , representing self; Eric Harris,
representing self; Valerie Policastro Edie, representing self; Kathleen Butler, representing self; Penny Boone,
representing self; Linda Block, representing self; Ailison Jackson, representing self; Kathleen Dubbs, representing
self; Michael Levine, representing self; Margaret Lacey, representing self; Gary Rulapaugh, representing self;
leadawn anderton, representing self; Rebecca Shook, representing self; William Yohey, representing self; LINDA
GANTVERG, representing self; Larry Scoufos, representing self; Theresa Ryan, representing self; Marcia Tingley,
representing self; Carly Mahlmeister, representing self; Mariette Francis, representing self; Jeannette Scoufos,
representing self; Libby Stortz, representing self; Roxanna Kearns, representing self; Rivko Knox, representing self;
Carol Garnett, representing self; jeff green, representing self; Norman Fuchs, representing self; Mary-Jeanne
Fincher, representing self; JOHN FIENE, representing self; Christopher Cerrato, representing self; CAROL R
BLACKMAN, representing seif; Jacqueline deSa, representing self; Crystal Bazarnic, representing self; Barbara
Reuter, representing self; William Bowlus-Root, representing self; Jan Perozeni Corbus, representing self; Sandra
Adier, representing self; Denise Hudson, representing self; Jill Anderson, representing self; Diane Klock,
representing self; Elizabeth Greer, representing self; Bonnie Oakes, representing self; Nancy Hancock, representing
self; Nancee K Wood, representing self; Paisley Rossetti, representing self; Evan Deaubl, representing self; Barbara
Jones, representing self; GARY LEW OLIVER, representing self; Alicia Messing, representing self; Mariann Leahy,
representing self; Mike Kunnecke, representing self; Valarie Bryant, representing self; Mary Marshall, representing
self; Kirstin Woodburne, representing self; Kathleen Schanus-Gohl, representing self; Linda Guarino, representing
self; Jo Ann Caruthers, representing self; Frank Harris, representing self; Shelley Stephenson, representing self;
Nadya Laliberte, representing self; Kathy Boltz, representing self; Patricia Brunner, representing self; Cynthia
Paster, representing self; Barbara Lynn Carpenter, representing self; Joyce Howard, representing self; Charlene
Hoffman, representing self; Dieter Knecht, representing self; Caroline Anderson, representing self; Frederick James,
representing self; Steve Gorman-Hackstadt, representing self; Lisa Koenig, representing self; STACEY NORDWALL,
representing self; Michael Pyska, representing self; Dee Maitland, representing self; Nancy Lecrone Nonini,
representing self; Peggy Church, representing self; Kathryn Dorn, representing self; Alice Patricia Price,
representing self; Nick Debus, AZ ATTORNEY GENERAL'S OFFICE; Srinivas Manne, representing self; Leslie Stallcop,
representing self; Gail Prestera, representing self; Nancy Wood, representing self; Kathryn Anderson, representing
self; Aaron Torrance, representing self; Christian Trujillo Cruz, representing self; Jeanne Hardie, representing seif;
Katharine Donahue, representing self; Sharon Arnst, representing self; Pamela Chittenden, representing self; Pat
Jayson, representing self; Dana Jolly, representing self; Claudia Miller, representing self; Elissa Karn, representing
self; Lois Hansen, representing self; Patricia Moran, representing self; Stevan Mrdalj, representing self; Nevena
Mrdalj, representing self; Salie Travis, representing self; Lyla Yango, representing self; Nancy Pemberton,
representing self; Barbara Rodman, representing self

All Comments:

Mary Ann Graffagnino, Self: Please...no more deregulating a playground for the mega-rich; Joan Murphy, Self:
Another give-away to the rich - what about the largest segment of your constituents? No giveaways for them,
right?; kathleen mayer, Self: horrible idea to unleash unregulated crytocurrency on Arizonans; Denise Link, PhD,
WHNP, Self: experimental financial investing schemes need more monitoring, not less; Beatriz Urrea, Self: This
would essentially deregulate a volatile playground for the mega-rich.; Alisa McMahon, Self: Special interest
legislation that would be contrary to the public interest.; Michael Fiflis, Self: This bill is special interest legislation,
lowering the regulation of biockchain technology, including licensure, for no reason.; Gail Kamaras, Self: Insanel;
Lawrence Peters, Self: Blockchain software is publicly available & not fully secured. Bad actors might exploit a
software flaw before it is noticed & fixed. In 2017, hackers found coding flaw in Ethereum’s blockchain platform,
using it to siphon away millions of dollars; Linda Edwards, Self: Want my tax dollars out of volatile markets.; Ellen
M. Ferreira, Self: This would deregulate financial products that SHOULD be regulated]; Cynthia Wagner, Self: This
would essentially deregulate a volatile playground for the mega-rich. NO NO NO NO; Nancy Santori, Self: The state
should have nothing to do with blockchain.; Jennifer Dawson, Self: Do your research. Crypto is dangerous
gambling for the mega-rich {or stupid). Consider the massive CRASH of FTX. Read the book "TRADERS IN THE
DARK" about tracking drug trafficking through the blockchain. Stay away from cryptol!; Gary Townsend, Self: This
would essentially deregulate a volatile playground for the mega-rich.; Joseph Bihms LD29, Self: Oppose. The bill
risks financial instability by deregulating crypto within Arizona's sandbox, favoring wealthy investors over
consumer protection.; Nelson Morgan, Self: While biockchain itself is a neutral technical approach, its dominant
usage is for crypto, which is hugely volatile and susceptible to Ponzi-like scams.; Lora Lida Walradt, Self: Bill will
further enrich the wealthy, & the legislator who sponsored this, while harming the general public & working class
people.; Rebecca Haynes, Self: This would essentially dereguiate a volatile playground for the mega-rich.; Lisa
Maczura, Self: No thanks to monopoly money.; Margaret Tinsley, Self: | don't know whether this is just designed to
help rich people, or to encourage fraud by not licensing these products. Please vote no.; Patricia Edelen, Self: This
deregulation is just begging for abuse by those who have money.; Connie Cockrell, Self: Would deregulate a
necessary fiscal situation.; Karolyn Switzer, Self: Cryptocurrency (and by extension, blockchain) needs to be closely
regulated. Both offer too many opportunities for manipulating our financial system.; Anne Leota Hart, Self: Why is
there interest in some of our Republican legislators in cryptocurrency? Can they explain the strange alliance
between this and MAGA extremists?; Penny Boone, Self: NO! Cryptocurrencies are scams. NO; Michael Levine,
Self: Please do not add blockchain to Arizona's "regulatory sandbox"; LINDA GANTVERG, Self: Haven't we had
plenty of evidence - enough to show us -cryptocurrency is too new and unregulated to be tested with AZ's money];
Marcia Tingley, Self: This bill would deregulate a highly speculative and environmentally destructive environment.;
Rivko Knox, Self: Will deregulate a what some call 'a playground for the very rich.’ Bad idea!!!; Carol Garnett, Self:
Anything related to cryptocurrency is risky and should be avoided.; JOHN FIENE, Self: Value of cryptocurrency is
based to the last investor/fool. This bill essentially deregulates this volatile folly for the mega-rich. LD1 voter;
Barbara Reuter, Self: Accessing Financial Programs without a license? PLEASE..,.; Elizabeth Greer, Self: financial
products and services should be under the regulatory authority of the state. Blockchain is extremely risky, and
should be regulated.; Bonnie Oakes, Self: Blockchain would essentially deregulate a volatile playground for the
super weaithy.; Alicia Messing, Self: Who does this bill support? The mega-rich or the everyday citizen of Arizona?;
Dee Maitland, Self: Too dangerous to play with tax funds; Kathryn Dorn, Self: Please don't let crypto bros treat our
state's economy as their sandbox! (You're all aware of the assorted recent crypto scandals and market crashes,
right? Can we please not actively invite those disasters into our state's economy?); Katharine Donahue, Self: Do
Not do things you probably don't really understand. If you do then it requires more explanation to voters.; Pat
Jayson, Self: | doubt that Ms. Bolick even understands block chain, let alone crypto currencies.; Lois Hansen, Self: i
feel that cryptocurrency needs regulation and this bill would allow deregulation. Many people have lost money in
this market already, lets not be foolish by allowing this; Lyla Yango, Self: Don't deregulate volatile industries for the
mega-rich.
ARIZONA STATE LEGISLATURE

Fifty-sixth Legislature - Second Regular Session

COMMITTEE ATTENDANCE RECORD

COMMITTEE ON

COMMERCE

CHAIRMAN: Justin Wilmeth

VICE-CHAIRMAN: Michael Carbone

DATE 02/27/24 /24 /24 [24 124

CONVENED 3/33, m m m m m

RECESSED

RECONVENED

ADJOURNED 34 gp
MEMBERS
Aguilar v
Austin v
Carter vA
Gress vO
Heap J
Hendrix “
Lucking Y
Ortiz wv
Carbone, Vice-Chairman v
Wilmeth, Chairman v

V Present --- Absent exc Excused

Attachment 3
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature

Second Regular Session

Senate: FICO DP 5-0-2-0 | 3% Read 27-0-3-0

SB 1270: reciprocal deposits; escrow agents; definitions
Sponsor: Senator Mesnard, LD 13
Committee on Commerce

Overview
Allows an escrow agent to use a system of reciprocal deposits to provide additional insurance
with the Federal Deposit Insurance Corporation (FDIC).

History
An escrow agent is any person engaged in the business of accepting escrows. An escrow is a

type of financial instrument, typically an account, held by an escrow agent used to facilitate
a transaction between parties. Statute requires an escrow agent to deposit and maintain ail
escrow funds in a financial institution that does business in Arizona. An escrow agent must
keep all escrow monies separate from monies belonging to the agent and to clearly designate
escrow monies as escrow accounts or another appropriate label upon deposit (A.R.S §§ 6-801

and 6-834).

The FDIC insures deposit accounts up to $250,000. Reciprocal deposit networks interchange
deposited funds that exceed the FDIC limit between insured financial institutions within the
network and allow depositors to receive insurance coverage for the entire amount of deposits.
Following a deposit exceeding the insurance limit from a depositor, the financial institution
uses the network to simultaneously place the uninsured portion with other insured financial
institutions and receive equal amounts of insured deposits in return (FDIC).

Provisions

1. Authorizes an escrow agent to use a system of reciprocal deposits to provide access to
additional insurance with the FDIC for monies deposited with the escrow agent, if the
eligible depository:

a) arranges for the deposit of the monies in one or more federally insured banks, savings
banks or savings and loan associations, regardless of location, for the escrow agent's
account; and

b) receives an amount of federally insured deposits from customers of other financial
institutions equal to or greater than the amount of the monies initially deposited by
the escrow agent. (Sec 1)

2. Defines eligible depository and reciprocal deposit. (Sec. 1)
3. Makes technical changes. (Sec 1)

DO Prop 105 (45 votes) [J Prop 108 (40 votes) C Emergency (40 votes) D Fiscal Note

SB 1270
Initials PB Page 1 Commerce

Attachment. {
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature - Second Regular Session

ROLL CALL VOTE

COMMITTEE ON Commerce BILL NO. SB 1270

DATE February 27, 2024 MOTION: DP
PASS AYE NAY PRESENT | ABSENT

Aguilar “

Austin Val

Carter ~

Gress v

Heap Vv

Hendrix Y

Lucking Y

Ortiz VA

Carbone, Vice-Chairman 4

Wilmeth, Chairman V

lo | O | © Oo

APPROVED: COMMITTEE SECRETARY,

EL CARBONE, Vice-Chairman

ATTACHMENT. P )
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature

Second Regular Session
FICO DP 6-0-1-0|3" Read 28-0-2-0

SB 1296: credit unions; formation; loans; membership
Sponsor: Senator Mesnard, LD 13
Committee on Commerce

Overview
Makes various changes to credit union statutes relating to formation, powers, membership,
accounts and loans.

History
The Department of Insurance and Financial Institutions (DIFD has statutory authority over

state-charter banks and state-chartered credit unions. A credit union is a cooperative
nonprofit association that is incorporated for the purposes of encouraging thrift among its
members and creating a source of credit and other financial services at fair and reasonable
cost. Seven or more adults residing in Arizona who have a common bond of interest or
association may apply to the Deputy Director of the Financial Institutions Division of DIFI
(Deputy Director) for permission to organize a credit union. The incorporators must prepare,
adopt and execute a certificate of organization and bylaws as outlined. The incorporators may
not transact any business in the credit union's name until the certificate has been issued by
the Arizona Corporation Commission and the application and bylaws have been approved by
the Deputy Director (A.R.S. §§ 6-501 and 6-506).

A credit union's membership consists of the incorporators and other persons who are within
the field of membership as prescribed in the bylaws. Each member may own only one
membership share. Persons in the field of membership of a credit union may include: 1) an
organization comprised primarily of persons eligible for membership; 2) a corporation with a
majority of stockholders eligible for membership; and 3) an organization whose principal
function is providing services to persons eligible for membership. A credit union may accept,
as a member, any other credit union organized under law (A.R.S. §§ 6-521 and 6-522),

A credit union board of directors (Board) has the authority and responsibility for directing
the business affairs, monies and records of the credit union. Board directors may vote by
telephone conference if all present directors can speak to and be heard by the other directors
during the telephone conference. A Board must meet at least 10 times during each calendar
year in 10 different months (A.R.S, § 6-531).

Provisions

Credit Unions
1. Modifies a credit union's general powers by:
a) specifying that a credit union may purchase all or a portion of assets and assume all
or a portion of liabilities of a credit union chartered under any state, a federal credit
union or a bank or an out-of-state bank; and

0 Prop 105 (45 votes) £1 Prop 108 (40 votes) © Emergency (40 votes) [ Fiscal Note

SB 1296
Initials PB Page 1 Commerce

Attachment_——
10.

il.

12,

13.

14,

15.

16.

b) removing the ability to hold membership in the Arizona Credit Union League or in
organizations that are specifically controlled by or that foster the interest of credit
unions. (Sec 5)

Allows the Board to vote by electronic meeting if all the directors participating can speak
and be heard during the electronic meeting. (Sec. 9)

Changes the Board meeting requirements to at least once every two months, rather than
at least 10 times during each calendar year in 10 difference months. (Sec. 9)

Allows the Deputy Director to direct the Board to meet more frequently to address specific
matter. (Sec. 9)

Removes the requirement for the Board to borrow or lend money to carry on the credit
union's functions. (Sec. 10)

Requires share accounts to be subscribed to and paid for in a manner prescribed by the
Board, rather than the bylaws. (Sec 12)

Removes language relating to allowing a credit union to have automated teller machines
at locations other than the credit union's place of business. (Sec 3)

Adds assisting members to manage and control their financial resources to improve their
social and economic conditions as a purpose of credit unions. Sec 1)

Repeals statute specifying that the fiscal year of each credit union ends on December 31.
(Sec 4)

Credit Union; Membership
Restates the field of membership to include:
a) an organization comprised primarily of individuals who are eligible for membership;
b) an organization for which a majority of owners, by number, are individuals who are
eligible for membership; and
c) an organization that is located within the credit union's membership area, if
applicable. (Sec. 6)

Allows a credit union to deny membership based on policies established by the Board.
(Sec 7)

Permits a person who is denied membership to appeal the denial for the Board within 30
days after the denial. (Sec. 7)

Allows the Board's management, if given the authority by the Board, to expel a member.
(Sec. 8)

Removes language relating to providing a person who is being considered for expulsion a
written notice of the potential expulsion. (Sec. 8)

Requires a person who has been expelled to be informed of the reasons for the expulsion
and be allowed to seek reconsideration by submitting a written request to the Board
within 30 days after the notice of expulsion is issued. (Sec 8)

Credit Union; Suspensions and Removals
Changes the requirements and procedures, unless the bylaws provide otherwise, for
suspending or removing a director, officer or member of a committee as follows:
a) lowers the voting threshold to suspend a director, officer or member of a committee
from two-thirds to a majority vote of the entire membership;

SB 1296

Initials PB Page 2 Commerce
b) clarifies a special meeting to consider a suspension must be requested within 10 days
after the date the director, officer or committee member was notified of the
suspension;

c) changes the maximum number of days to which a special meeting to consider a
suspension must be called from 21 days to 30 days after receiving the request for a
meeting; and

d) clarifies if a hearing has not been requested within the 10-day period, the suspension
is deemed a removal from office. (Sec. 11)

Credit Union; Loans
17. Allows a credit union to make loans to credit union members for purposes and conditions
prescribed by the Board, rather than the bylaws. (Sec 14)

18, Specifies prepayment penalties may be charged on loans that are not made for personal,
family or household purposes, rather than on member business loans. (Sec. 14)

19. Reduces, from 10% to 5%, the minimum interest rate of a loan's outstanding principal
balance that is retained by a credit union. (Sec 15)

20. Restates that any loan that results in an official becoming a direct obligor, endorser,
cosigner or guarantor in an aggregate amount of more than 1% of the credit union's net
worth, rather than in the aggregate amount of $20,000 or more, must be approved by the
Board. (sec. 16)

21. Instructs a credit union to provide the Deputy Director a list of each official's credit
obligations whose aggregate obligations to the credit union are more than $50,000 or 1%
of the credit union's net worth, whichever is less. (Sec 16)

Miscellaneous
22. Makes technical changes. (Sec 1-3, 5-16)

SB 1296
Initials PB Page 3 Commerce
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature - Second Regular Session

ROLL CALL VOTE

COMMITTEE ON Commerce BILL NO. SB 1296

DATE February 27, 2024 MOTION: { ) f

NAY PRESENT | ABSENT

>
x
m

PASS

Aguilar

Austin

Carter

Gress

Heap

Hendrix

Lucking

Ortiz

Carbone, Vice-Chairman

Wilmeth, Chairman

Oo NISISTSTESNSS SN SIRI.

O|}| O10

uu Hutu

APPR : COMMITTEE SECRETARY

JUSTIN WILMETH, Chairman
I@HAEL CARBONE, Vice-Chairman

7

ATTACHMENT.
ARIZONA HOUSE OF REPRESENTATIVES

Fifty-sixth Legislature
Second Regular Session
Senate: FICO DP 6-0-1-0 | 3° Read 27-0-3-0

SB 1271: rental-purchase property; electronic disclosures
Sponsor: Senator Mesnard, LD 18
Committee on Commerce

Overview
Provides for certain information to be electronically disclosed for property that is displayed
or offered online for rental-purchase.

History
A rental-purchase agreement is an agreement allowing an individual to use personal property

for personal, family or household purposes, for an initial period of four months or less, that
is automatically renewable with each payment after the initial period and that allows the
consumer to become the owner of the property but that does not obligate or require the
consumer to continue leasing or using the property beyond the initial period (A.R.S. § 44-

6801).

Prior to the consummation of the rental-purchase agreement, the lessor must disclose
specified information to the consumer (A.R.S. §§ 44-6803 and 44-6804).

Advertisements for rental-purchase agreements that specify an amount for the periodic
payment and include the right to acquire ownership of the item must disclose: 1) that the
transaction advertised is a rental purchase agreement; 2) the total number and total amount
of periodic payments necessary to acquire ownership of the item; and 3) that the consumer
acquires no ownership rights unless the total amount necessary to acquire ownership is paid.

Items that are displayed or offered under a rental-purchase agreement must bear a tag that
clearly and conspicuously indicates in Arabic numerals that are readable and understandable
by visual inspection: 1) the cash price of the item; 2) the amount of the periodic payment; 3)
the total number and total amount of periodic payments necessary to acquire ownership; and

4) the cost of rental (A.R.S. § 44-6810).

Provisions

1. Stipulates, for rental-purchase property that is displayed or offered online and a
consumer is able to enter into a rental-purchase agreement for the property online or
remotely through electronic commerce, a lessor may electronically disclose the following
information:
a) the cash price of the item;
b) the amount of the periodic payment;
c) the total number and total amount of periodic payments necessary to acquire

ownership; and

d) the cost of the rental. (Sec. 2)

(] Prop 105 (45 votes) [1] Prop 108 (40 votes) © Emergency (40 votes) O Fiscal Note

SB 1271
Initials PB Page 1 Commerce

Attachment. g
2. Stipulates, for offering personal property for rental-purchase that is not owned by the
lessor when it is displayed or offered for rental-purchase, the lessor must electronically
disclose the following information:

a) the cash price of the item;

b) the amount of the periodic payment;

c) the total number and total amount of periodic payments necessary to acquire
ownership; and

d) the cost of the rental. (Sec. 2)

3. Requires the electronically disclosed information to be:
a) clearly and conspicuously indicated in Arabic numerals that are legible by visual
inspection; and
b) disclosed to the lessee before any of the statutorily prescribed general disclosures.
(Sec. 2)

4, Clarifies the items that are required to bear a tag indicating specified information are
relating to items of rental-purchase property. (Sec. 2)

5. Defines rental-purchase property as personal property owned by the lessor when
physically displayed and offered for rental-purchase to the consumer and before the
rental-purchase agreement is executed. (Sec 1)

6. Makes technical changes. (Sec 1)

SB 1271
Initials PB Page 2 Commerce
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature - Second Regular Session

ROLL CALL VOTE

COMMITTEE ON Commerce BILL NO. SB 1271
DATE February 27, 2024 MOTION: | DFE,
PASS AYE NAY PRESENT | ABSENT
Aguilar V
Austin ra
Carter VY
Gress v
Heap VA
Hendrix Vv
Lucking 4
Ortiz V
Carbone, Vice-Chairman VA
Wilmeth, Chairman if
lO © OQ 6)
APPRO COMMITTEE SECRETARY

JUSTIN WILMETH, Chairman
MI@HAEL CARBONE, Vice-Chairman

ATTACHMENT |

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