As previously reported here, here and numerous other places, this year’s “technical corrections” bill at the General Assembly was and is an especially egregious example of secret legislative sausage making at its worst. The bill is chock-full of substantive (i.e. a lot more than “technical”) changes to the law – many of which were never even the subject of separate legislation – much less public hearings or debate.
A classic example is buried on page 20 of the 58-page, 94-section special interest Christmas Tree. The official explanation from legislative staff and even the explanation from some legislators in committee and on the floor suggested the provision added needed protections or in some manner merely “clarifies” an “ambiguity” in the state’s anti-predatory lending law by specifying that first loans on manufactured homes are also covered.
Sounds innocuous and maybe even okay, right?
Here’s the problem (and the reason why baloney like this shouldn’t get mislabeled as “technical” and then passed in the wee hours of the legislative session when no one is even paying attention):
The manufactured housing industry asked for the change so that lenders would be able to charge an upfront “origination” fee when they sell a manufactured home by itself – i.e. in situations in which no land is involved in the transaction. Currently, under the law in question, a lender can charge such a fee but only where the manufactured home is sold attached to real estate. With this last minute “technical correction,” the barn door is now open to the assessment of such a fee with all manufactured home sales – even though there was never a bill on the subject or a genuine public discussion at the General Assembly on the merits (and problems) of such an idea This is obviously a big deal that will cost the state’s consumers millions of dollars in the years to come.
The bottom line: It’s not surprising that an industry long known for selling marginal products with the deceptive tactics perfected in the used car business would support squeezing yet another fee from what are typically unsophisticated, lower income consumers. And sadly, it’s even less surprising that the folks currently running the General Assembly would blithely label the legalization of such a rip-off as a “technical correction.”
FYI – the Governor has until next Tuesday to sign the bill and has given no indication that he will do otherwise.