Vermont Legislature SmartTranscripts:

[Michael Marcotte (Chair)]: Good afternoon, everyone. This is the Vermont House Committee on Commerce and Economic Development. Again, it's Friday, 02/16/2026 at 01:10 in the afternoon. And so we're here to take a look at a walk through of h six seventy four, which is an act relating to the creation of the. So today, we have a with us, gonna walk us through the bill. Rick, welcome. Thank you for joining us.

[Rick Siegel (Office of Legislative Counsel)]: Thank you for having me. Rick Siegel, office of the legislative council. So h six seventy four introduced by, looks like most people on this committee. I don't that didn't count, but I see a lot of your names there. This is the work product of the sister state working group that was created in 2024. Some of you were here. Some of you weren't here. That was act one thirty two, which I had pulled up, and I can show you at some point. That bill, as it made its way through the general assembly a couple years ago, was going to create this committee. It was gonna actually, we had the language. It was going to be done. And then there was a decision to turn it into a working group to make sure it was done correctly or as best they can. Right? Plan it out correctly. So the working group and representative vice chair of Branning was on the working group so she can provide any details. But the working group did produce a report a couple months ago that this bill is largely based on 95% of the bill is based on the working group's recommendations. If there's something that the working group did not anticipate in this bill, Hopefully, can hear about it, but my my goal in drafting was to match the working group's recommendations. So this is, again, H six seventy four. We'll start with the bottom of the first page. This is the Vermont sister state program. It's gonna be housed in the agency of commerce and community development. And that agency was you're gonna see here, this agency really has quite the vital role in managing the program along with the committee. Subdivision two, the purpose of the program is to strengthen Vermont's international engagement and to foster mutually beneficial relationships with subnational governments abroad with a goal of promoting cultural exchange, economic development, educational cooperation, and diplomatic collaboration. That's the kinda overarching purpose there. Subsection b program oversight. There's going to be a sister state program committee, which is made up of the following people to oversee the program. The ACCD secretary or designee, a member of the house appointed by the speaker, a member of the senate appointed by the committee on committees. And let me take a step back. A lot of these people were also on the well, a lot of these offices were in the working group as well. So there's gonna be some continuity, you would you would presume. The letter d, the chair of the board of trustees of the Vermont Council of World Affairs or designee, the Vermont Adjutant General or designee, the chair of the board of trustees of the Vermont Arts Council or designee, Three members, one with experience or expertise in cultural exchange or in Peace Corps operations appointed by the governor. One member representing private higher ed appointed by the committee and committees, and one appointing one representing public education higher ed, appointed by the speaker. So that is three, four, five, six, seven, eight, nine members total. Members of the committee shall serve two year terms. However, those three at the end, the three appointed by the governor, the committee on committees, speaker shall initially serve terms of three years each to establish staggered terms. That was recommended in the report. I actually don't know if it's necessary. If you it's up to the committee if you wanna do that. You have you're gonna have some carryover with the secretary being there, the chair of the board of the Vermont Council, and the adjutant general. So it was recommended. I put it in there. But one thing I'm thinking about here is these three members. The governor's appointee, I think, is not gonna be the issue. But the committee on committees, the three year term that's in the middle of a biennium, that could be an issue. Not a huge issue, but just something I was thinking about earlier when I read through it.

[Edye Graning (Vice Chair)]: It's not intended to be someone who's serving in the body.

[Rick Siegel (Office of Legislative Counsel)]: Right. But it's I always think about we're going through a break here, and I don't want that position to be empty for longer than it needs to be. But it's just the first time, the first three years, after that, it's two years.

[Jonathan Cooper (Member)]: May I ask you a clarifying question there? Is it Eric that with that, we're making a decision. This bill makes a decision for a committee on committees that's in that third year, that will be a different committee on committee, comprise a different membership than it does in one biennium, this is gonna span biennium. So is that second committee on committees not getting to make a choice? No. Because the previous one did, and it carries over into a year.

[Rick Siegel (Office of Legislative Counsel)]: No. It's just and also there's gonna be another committee on committees appointment earlier in the working group that will follow the biennium time period. This one here, because the first person is gonna be three years, they'll have a mid term appointment, which is not a huge deal. It's just something that

[Jonathan Cooper (Member)]: It's a midterm

[Michael Marcotte (Chair)]: thing.

[Rick Siegel (Office of Legislative Counsel)]: Everybody will have an appointment, at least one appointment for a member. So Thank you. Maybe it's me overthinking, but something if you if you're if you think that's gonna be confusing, we can fix it, but not a huge deal either way. Members may be reappointed. Subdivision three, the committee shall elect a chair and a vice chair from among its members that shall each serve a two year term. Majority shall constitute a quorum. Pretty standard language there. The meetings, all meetings shall be called by the chair. But in the event that the committee does not have a chair, a meeting may be called by the secretary of ACCD or their designee. The committee shall meet at least quarterly for the purpose of evaluating current program agreements, proposing new program agreements, preparing its annual report or discussing any other matter that the committee deems relevant to its work, and to review and score an eligible program application not later than thirty days after the committee receives the application from the agency. This will make more sense here in a second. We're kind of foreshadowing how this is gonna work.

[Unidentified Committee Member]: Rabbit trail, perhaps. But is there a general statutory, allowance that speaks to doing meetings such as this remotely, you know, via Zoom or something? Or does that need to be called out specifically here, or is there a blanket sent to COVID?

[Rick Siegel (Office of Legislative Counsel)]: Allowance as far as payment or how many times you can vote via Zoom.

[Unidentified Committee Member]: Or or just attend by by Zoom and participate.

[Rick Siegel (Office of Legislative Counsel)]: This would not have the same you know, the house and senate each has their own resolution Right. That pertains to this that keeps getting renewed. This that would not cover this, and there isn't the same restriction in place for these types of meetings. So if you wanted to attend via Zoom, I'm not aware of any restriction on this type of committee. It's not a legislative committee. Right? Right. It's made up of some legislators, but it's not a house or senate committee. So there would not be the same restriction on number of times you could vote Okay. Be assumed. I'll double check that, but I'm I've never heard of any.

[Michael Marcotte (Chair)]: Yeah. Thank you. Mhmm. Yeah. Because the restriction is through house rules for legislators. Yeah.

[Rick Siegel (Office of Legislative Counsel)]: Okay. So subsection d. This is think of this as kind of a a road map and almost kind of a order of things how it's how this is gonna work. That's that's how I wrote it because there is this kind of procedural timeline that these this process follows. So this is your program application review and approval procedures. We start with the development of the application process. So the working group suggested the agency of Commerce and ACCD basically develop this process by which an entity can apply and be considered for admission as a part into the program. This process shall include the development of an official application to be in the program, a confidential internal review procedure to be used by the agency to review applicants for sensitive political, legal, ethical, and strategic factors, minimum eligibility requirements to be considered for the program, a fixed scoring system, including a rubric to be uniformly applied by the committee to evaluate all eligible applications, And a memorandum of understanding template to be used and signed by the state and an approved program partner. So, you can be more prescriptive there if you want the agency to consider more things. But this is kind of what the working group suggested the agency do when it comes to developing this application and the review process. Okay, good so far? So agencies initial verification, subdivision two. So at this point, they've developed the application, they've developed this confidential review process, they've developed all these things that they were told to do. When a program application has been received by the agency, the agency shall, before the committee may meet to review it, one, verify that the application meets the program's minimum eligibility requirements. Remember, they have come up with, right? They may stem They could be that Maybe Rep Graning can help me. What would be an example of a minimum requirement that the agency may set?

[Edye Graning (Vice Chair)]: If there are five areas where we'd like to have some kind of positive interaction, education, economic, cultural, whatever you pick, three of the five. You could say something like, there are avenues for partnership, and that means that both sides win. Because it's all about how do we create relationships where both sides benefit. That would be another minimum requirement.

[Rick Siegel (Office of Legislative Counsel)]: This is why I demanded you be here for this testimony. To conduct a confidential internal review of the applicant. So, is, and more about this in a couple, I think, subdivision c here. This is your kind of more sensitive geopolitical analysis of a city, a county, some area that's not a national, right, entity. And some of that information, some of that review, you don't wanna be public about what the agency determines or how they determine that. More about that in a second. Subdivision B, not later than ten days after this completion of this review, the agency shall send the committee a copy of the application along with a summary of the agency's analysis. So the agency may say this applicant did not meet the minimum eligibility or they did not pass the confidential internal review of the requirement that we have set out. Subdivision C, the confidential internal review process along with any and all documents reviewed during that process shall be exempt from public inspection and copying. Again, this is sensitive stuff, and you want that analysis to be done assuming it's gonna be free from public inspection, Public Records Act. Three, committee review and recommendation. The committee, upon receiving an application that has received preliminary approval from the agency, shall meet to review the application not later than thirty days after receipt of the application. So remember, the committee must meet quarterly. Right? That's one of the requirements. They can meet more than quarterly, but they must meet not later than thirty days after the agency says, we have this applicant that has passed our initial review. So the committee shall not later than thirty days after completing its review, submit its final recommendation to the governor along with a copy of the application. The final recommendation can be two things. Either the committee recommends the application be approved or the committee recommends the application be disapproved. They don't make the final decision. The governor does. But those are the two recommendations they send to the governor is either thumbs up or thumbs down. Questions about that so far? Okay. So Subdivision 4, the governor's review. The governor shall have the sole authority to issue final approval or disapproval of a sister state program application that the committee recommends be recommended be approved. The governor shall not review or approve of a program application that the committee recommended be disapproved. So the governor cannot go against a recommendation of disapproval if the committee I'll get to this in a second. The governor can say no to one that's been recommended to be approved, but the governor cannot say yes to one that's been disapproved or recommended to be disapproved. What's that? The governor shall send written notice of the governor's decision to the agency not later than ten days after the governor's decision. If the governor disapproves a a program application, the governor's notice shall include a written explanation as to why the governor did not follow the recommendation of the committee. Upon the agency's receipt of the governor's decision, the agency shall notify the applicant of the governor's decision not later than thirty days after the agency receives notice of the governor's decision. If it is approved by the governor, the agency shall finalize a memorandum of understanding between the state and the sister state program applicant. So that's kind of the timeline, the path. Are there any questions about that path or anything missing?

[Edye Graning (Vice Chair)]: Just one of the things that we're talking about is if the application should the governor even receive all of the applications? Shouldn't the governor only get the ones that were approved by the committee? Isn't that how we wrote it?

[Rick Siegel (Office of Legislative Counsel)]: So you're suggesting the bill

[Edye Graning (Vice Chair)]: We only send to the governor.

[Rick Siegel (Office of Legislative Counsel)]: That's recommended to be approved?

[Edye Graning (Vice Chair)]: That are recommended to be approved.

[Rick Siegel (Office of Legislative Counsel)]: So the current weight, so on the top of the page there, Submission B, the committee shall submit its final recommendation to the governor along with a copy. So right now, as it's written, the governor would get either either one, if it's recommended approved or recommended not approved.

[Edye Graning (Vice Chair)]: Yeah, I thought that the committee recommendation was that only the approvals go to the governor.

[Rick Siegel (Office of Legislative Counsel)]: I may have gotten it wrong

[Michael Marcotte (Chair)]: for granted.

[Edye Graning (Vice Chair)]: May not have explained it well.

[Unidentified Committee Member]: Mean, you're that makes more sense

[Unidentified Committee Member]: to me.

[Rick Siegel (Office of Legislative Counsel)]: Yeah. The governor's not notified that the that the committee

[Edye Graning (Vice Chair)]: Which applications the committee even reviewed only gets the ones that

[Michael Marcotte (Chair)]: were approved. Yeah. That makes sense.

[Edye Graning (Vice Chair)]: Yeah.

[Michael Marcotte (Chair)]: As long as it doesn't have the ability to override disapproval then. Then why? The Senate. Right.

[Jonathan Cooper (Member)]: But he had the ability to be interested in it, like, oh, it falls short, but I like some of these things. And I'm curious the governor is curious about trying to get it across there.

[Edye Graning (Vice Chair)]: Yeah, mean, there's nothing in this, we haven't gotten there yet, that says that you can't apply more than once. So if you get information that is you're missing these areas, you could always-

[Jonathan Cooper (Member)]: Not yet. So

[Edye Graning (Vice Chair)]: if there's somebody in government that feels like a program should get approved, they should be working with that program to meet the criteria, because there's criteria. If you don't have criteria, what's the point of having that formal program? Cool. I

[Unidentified Committee Member]: think Edye may just have answered my question, but if it's is there any kind of appeals process in the assault, the denial in the review process by the committee? And it sounds to me like it is, improving your game and just simply reapplying. Yeah.

[Edye Graning (Vice Chair)]: So in the procedures, because the task force worked on not only the thought of what the other patient but also the procedure for how this would work. In the procedures, there was that discussion of what kind of feedback anybody who doesn't get approved should get in order to help them understand where they fell short. So that would be something that the the task force? Is it the committee? Committee? Commission? What is it called?

[Rick Siegel (Office of Legislative Counsel)]: The committee. It's a committee.

[Edye Graning (Vice Chair)]: The committee. The sister state committee would come up with some guidelines.

[Rick Siegel (Office of Legislative Counsel)]: And it's yes. So it's a permanent committee. Right? Some of us think this is in statute. This is not a temporary program. This is a permanent program that would be indefinitely operating. You could put a sunset on it if you want, but that's the idea is that it's a permanent part of state government. Shall I continue? So that's is the committee on board? I should fix the Okay. Right. We'll do that. Skipping down to page seven, law subsection e, reporting. The committee shall submit an annual report on or before January 15 of each year to this committee and the Senate Economic Development Committee that includes the following. An executive summary of key developments and outcomes of the program, a description of committee activities, including a summary of attendance and decisions at its meetings, updates on the program, including evaluation of sister state applications, new partners, significant developments, metrics of success and challenges, recommendations for new sister state agreements, along with the rationale for the recommendations and how they align with Vermont's strategic interest and capacity, a description of stakeholder engagement with the program, a financial overview, including a summary of funding sources and expenditures, and an outlook for the program, which includes strategic objectives, potential new agreements, and growth opportunities for the next year.

[Michael Marcotte (Chair)]: Or can you go back? Understanding for recommendations for new system state agreements. Isn't that what the committee does?

[Edye Graning (Vice Chair)]: Yep. So it would be updating in the report, it would list what the agreements were for the year. That's what it's supposed to be.

[Michael Marcotte (Chair)]: That's not a recommendation?

[Edye Graning (Vice Chair)]: Well, it's what was recommended to the governor, I guess. But, yeah, maybe it should be written.

[Rick Siegel (Office of Legislative Counsel)]: So the way I read this, I think it's the way the chair reads it, is that this would be the agency saying that maybe an agreement with Tokyo or some other entity would be ideal. You'd be making recommendations for

[Michael Marcotte (Chair)]: Oh, it's not the committee? Is this the report from the committee?

[Rick Siegel (Office of Legislative Counsel)]: From the agency. I'm sorry. It's I'm sorry. It's through the committee. I'm sorry. Make sure I get that correct. It is the committee. Festive's annual report.

[Edye Graning (Vice Chair)]: So it should be a list of the new sister state agreements and the rationale for why they received their why they were recommended. So these are the programs that we have had, the new programs that The new sister states we now have and why we chose them.

[Rick Siegel (Office of Legislative Counsel)]: So I think three may get to that, right? Updates on the program, including evaluation of sister state applications, new partners. I could be more detailed on that, but that's

[Edye Graning (Vice Chair)]: But maybe we don't need

[Michael Marcotte (Chair)]: to follow. You may want the names of the new sister state agreements that have been signed, and you may want to know the ones that were rejected. Right? And the reasons for the rejection you've seen.

[Jonathan Cooper (Member)]: The report has stuff that the governor

[Edye Graning (Vice Chair)]: That's all in free? Yeah.

[Jonathan Cooper (Member)]: The governor would learn about mean, because we're not sending an application or any evaluation to the governor, except for the Approved ones. Approved ones. And the governor can catch up on disapproved ones or anything in the report. Correct.

[Michael Marcotte (Chair)]: Or she does have people that are on the committee. His agency.

[Unidentified Committee Member]: So

[Jonathan Cooper (Member)]: I was wondering if that's is that weird that employees at the agency administration would be provided with information that they cannot share with the Governor.

[Michael Marcotte (Chair)]: I think they can share it with them. That's just enough. Formally presenting applications for approval or disapproval because it's only approved once it can go to it. I appreciate it.

[Unidentified Committee Member]: Thank you.

[Edye Graning (Vice Chair)]: So I'm wondering if we should strike four because it seems pretty similar to seven.

[Rick Siegel (Office of Legislative Counsel)]: Seven.

[Michael Marcotte (Chair)]: For real.

[Edye Graning (Vice Chair)]: As long as we're making the changes, we might as well make changes.

[Rick Siegel (Office of Legislative Counsel)]: So striking four.

[Edye Graning (Vice Chair)]: Does it three covers evaluation of who the new partners are, what the significant developments were, evaluating all the applications. Again,

[Rick Siegel (Office of Legislative Counsel)]: we need to upgrade in here. Because

[Michael Marcotte (Chair)]: we could have really plugged it apart.

[Rick Siegel (Office of Legislative Counsel)]: What were they thinking? Well, this is what we do.

[Edye Graning (Vice Chair)]: Stakeholders are So stakeholders are local entities that are partnering with these sister states to up So there's no money in this bill. And part of that

[Rick Siegel (Office of Legislative Counsel)]: Or DMs.

[Edye Graning (Vice Chair)]: Or DMs. There's no money to fund this bill. So the thought is that, and time you have, and I'm sorry, I'm jumping out of turn here, but every time you have a sister state, you have different kinds of get togethers and gatherings and bringing Words are so hard today. Bringing the public to these kinds of events and getting And so you need local stakeholders to champion those programs. And so that's part of the application process. Who is your local group that's going to be championing this? That's how it works well in other states. That was part of the learning that Tim mentioned when we talked about who we interviewed and what worked in other states and what didn't work.

[Jonathan Cooper (Member)]: At some point, are definitions advisable? Or is that something that is tight enough that we don't need to say, here's what a stakeholder is, here's what a state is. We're talking about different countries with different municipal or political subdivisions of their states. Do we need to define those things at all, or is it okay to to

[Rick Siegel (Office of Legislative Counsel)]: Which specific terms are

[Jonathan Cooper (Member)]: you talking to? Stakeholder is one of them.

[Rick Siegel (Office of Legislative Counsel)]: We're talking about reporting here. State. You think know, of this is we're talking about reporting. So this is what you're gonna get in your annual report. This is a pretty common phrase in in statute, and I rarely see it maybe ever defined.

[Jonathan Cooper (Member)]: I wonder if it's So I think it's use its sort of vague. Right.

[Rick Siegel (Office of Legislative Counsel)]: Yeah. I think that's probably so I I don't think it needs personally, don't think it needs to be defined. But of course, you can always define something to be specific to what you want it

[Unidentified Committee Member]: to say.

[Jonathan Cooper (Member)]: It hasn't been elsewhere, and nothing's on fire because of it's not defined.

[Rick Siegel (Office of Legislative Counsel)]: I can't say it's no in these screenplays, but I I don't yeah. Yeah. Term yeah. Common term used. Okay. Any other questions about the reporting?

[Michael Marcotte (Chair)]: No. Alright. I'm gonna add the names of approved and and any

[Rick Siegel (Office of Legislative Counsel)]: That's in that's in seven. Right? Or

[Michael Marcotte (Chair)]: in Three.

[Rick Siegel (Office of Legislative Counsel)]: Three. A combination of three and seven, think, gets you where you wanna be. Do you want specifically have included projected? I think I think three evaluation of sister state applications. But I can say you know, the bill can say specifically, including rejected applicants, but

[Michael Marcotte (Chair)]: Well, I think, you know, you wanna I don't think you need to know the names of the ones that were rejected. If you get the report and you wanna ask, you can. But you can ask how many, you know, how many were rejected, how many were approved, how many were rejected, and then when you look at when you if this committee takes a look at the report, then they can ask those questions of, well, who were they? Yeah. The

[Rick Siegel (Office of Legislative Counsel)]: compensation reimbursement, this is your standard per diem language. You should know this by now. If not, I can I can walk through it? But Subdivision 3, the money will become come from ACCD. So you may wanna make sure they're okay with that. Per diems do cost money. There's not a huge amount of money, but they do cost money. Okay. Section two is a repeal. You may remember last year, this committee s one twenty two, I think it was. Forget the act number. I remember the bill number. Oh, 65. It's right in front of me. It's Friday. That was the economic development bill, which included the Vermont Island Trade Commission. This bill would repeal the Vermont Island Trade Commission, and the other two sections are the kinda incidental to the Vermont Ireland Trade Commission, the employment deadline, and then the repeal of the repeal. So it removes the Vermont Ireland Trade Commission is what the section does. And then the effective date is on passage.

[Edye Graning (Vice Chair)]: And just to be clear, that's because our relationship with Ireland or any part of Ireland should be done through this sister state program in a different way. The whole point is to set up a comprehensive way for us to have partnerships with other countries or parts of other countries and not to have too many different avenues for that.

[Jonathan Cooper (Member)]: Is there another Remember, during last year, looked at a body that I think included the chair of this committee that hadn't that we formed in 2014 and hadn't met. Is that this one?

[Michael Marcotte (Chair)]: The international

[Rick Siegel (Office of Legislative Counsel)]: trade commission. Is

[Jonathan Cooper (Member)]: is anyone did anyone contemplate eliminating that as well?

[Rick Siegel (Office of Legislative Counsel)]: Eliminating? That's not in the bill. It can be an amendment to the bill.

[Jonathan Cooper (Member)]: I was wondering if that was if that had

[Edye Graning (Vice Chair)]: if the idea of Streamlining.

[Jonathan Cooper (Member)]: Streamlining had also reached that, and maybe it's more of a question for someone who was on the committee then for the legislative I

[Michael Marcotte (Chair)]: think it's difficult. Although governor hasn't appointed anybody to that commission, We're talking about international trade and this is more of a organization. Think, even though it's not working right now, it doesn't mean it can't in the future if you have a government that wants, and if you have people that want to do it.

[Jonathan Cooper (Member)]: I I forgot. It's international trade. It's it's not the same thing. So but in in much more a way that the Ireland Vermont Trade Commission is more like what we're talking about here.

[Michael Marcotte (Chair)]: Yeah. I think the trade for Ohio, trade is, I mean, it's nowhere, but I

[Jonathan Cooper (Member)]: just wanted to double check, thanks.

[Michael Marcotte (Chair)]: I think that the Vermont, Ireland commission is more suited to be under the Cisco state. Any other questions for Rick?

[Rick Siegel (Office of Legislative Counsel)]: The bill would take effect, let's say this, on passage. And that's to avoid because the trade commission takes effect 07/01/2026. So that was to avoid.

[Michael Marcotte (Chair)]: Say 06/30/2026. Good. You could.

[Rick Siegel (Office of Legislative Counsel)]: You wanna be cute? You could do

[Michael Marcotte (Chair)]: I mean, if it doesn't get to the governor in a dawn time, it could be after. Yep. You

[Rick Siegel (Office of Legislative Counsel)]: can amend that too. You can have it say June 30 or whatever day you want.

[Michael Marcotte (Chair)]: Could change the effective date of the RM Trade Commission. Could as well. Oh man,

[Unidentified Committee Member]: those are good all right here.

[Rick Siegel (Office of Legislative Counsel)]: I can take a little bit of that headache, but let's not

[Michael Marcotte (Chair)]: Thank you, Rick. Yeah, you're welcome.

[Rick Siegel (Office of Legislative Counsel)]: I got.

[Michael Marcotte (Chair)]: See you next week. No. Thank you for coming in in such a long we appreciate it. Helps us fill a little gap and also those two reports that we've got that you sent us yesterday, something that we're interested in. Appreciate your time.

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: Absolutely. Joe Valenti, director of policy, Department of Financial Regulation. And I think we have had DFR in committee every day this week, so I don't know what the prize is for that.

[Michael Marcotte (Chair)]: But

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: happy to be here. I before getting into the substance of the two reports, I thought I would talk a little bit about the process because that was the same for both. And part of why that's important is, as you know, we have been pretty busy over the last year, and Commissioner Samsung started in April. I started a week after him in April. And so, you know, this was really the first this along with the franchisor report we talked about last week. This is really the first time that we were involved in doing studies. And so we've tried to have an approach that is inclusive, that is efficient, that gets you the answers that you need. And if there are ways we can do that differently, I think any questions or feedback on that would be helpful. So for both of these studies that were in Act 23 last year, we were given a task, we were given a list of stakeholders. And in each case, we held two stakeholder calls on each of the two topics, one on suspicious transaction holds, the other on protections for victims of coerced debt. And there was a fair amount of overlap between the two. So we really do thank the stakeholders for taking the time. I think in October, we had the second round of calls. We had both in the span of the same week. And so we know that it does take time on people's schedules to participate. But we aim to be inclusive. We wanted to hear all of the views and perspectives that were shared and to really have the stakeholders help direct the discussion for us. The suspicious transaction hold report. Also the statutory language also had an interim status report requirement. So we did submit a brief status report on that back in November, and we had circulated that to stakeholders to make sure we were all more or less on the same page. And then we did circulate the final drafts to stakeholders. Those are in pretty narrow windows, just given the timing that we were dealing with around the holidays and preparing the housekeeping bill and preparing for session and all of that. We did limit discussion to stakeholders with the exception that were given to us, with the exception of people who had special expertise who the stakeholders thought would be useful. So in the case of suspicious transaction holds, we did have a speaker on our second call from adult protective services For coerced debt, we had speakers from the National Consumer Law Center who had studied this issue extensively. We see it as, you know, in the reports we've sort of generated, I would say, ingredients or recipes, if you will. You know, they while one report was more controversial than the other, I think both of them still left some wiggle room and some tough decisions and weighing of pros and cons. And I think that's really an area where we expect the committee to review the evidence and and make those decisions. We don't wanna put our thumb on the scale sort of too forcefully in any particular way. We of course, we had broad consensus on suspicious transaction holds. We did not have consensus on coerced debt. Before I get into the details of those reports, any questions or thoughts in terms of process? Okay. I'll do suspicious transaction holds first. Like I said, this is an area where we had relatively broad consensus. I know this was something that was brought to the committee last year. So suspicious transaction holds in practice. What happens in many states? There are 26 states that have some form of a law around suspicious transaction holds. There's also there is also language for these are for transactions of banks and credit unions. There are also requirements in securities and the Vermont securities regulations and also at FINRA where someone is looking to make a transaction. Let's say it is a, you know, a large cash withdrawal, and the bank or credit union or the know, broker dealer or whomever the individual is interacting with has the ability to pause that transaction for a period of time and enable the transaction to be investigated, to see if it's legitimate, and also really to give the the person looking to make that transaction a bit of a cooling off period. We know a lot of these transactions are the result of fraud or scams where someone is told that they need to transmit money or buy gift cards or buy crypto or do something urgently. And removing that sense of urgency is really important to safeguard their money because while we do have protections, for example, for credit and debit card purchases, a lot of times when these transactions are done, they're final. And it is very difficult for the individual to get their money back. And if you are at a bank or credit union and you see this happen regularly, you'd like to be able to intervene. Just to give a sense of scale, the FBI puts out an annual report on cybercrime and fraud, the I c three report. In 2024, they found that there were 937 complaints to the FBI by Vermonters around cyber fraud, over $11,000,000 in losses. There are some studies that say that these numbers are vastly unreported because there are people who do not go to law enforcement. One of the things that has has come up in research is people will, even if they may not go to law enforcement, they may go to their financial institution, that that is a trusted place for them to work through the issue. Of those nine hundred thirty seven complaints, two hundred forty three were from Vermonters aged 60 or older. So that's roughly a quarter. It's hard to make conclusions on that because people aren't required to give their age when making a complaint. And there are valid reasons why people may choose not to do that. So we don't know how many were actually coming from older Vermonters, but older older Vermonters, 60 plus, reported over $4,000,000 in losses. So about a roughly a quarter of the total, but over a third of the losses. What we've seen here in other states is that financial institutions have a role to play. They're trusted. They're on the front lines. They're able to interact with a customer when one of these situations comes up. And what the while the group did not agree on every single component, I think there was a broad consensus. And our recommendation is that banks and credit unions should have the general discretion to place a pause on a potentially suspicious transaction, and they should have some degree of liability of liability protection associated with that. That is I think the liability question is subjective. I think that's one of the things that this committee would need to to figure out in the scope of of a bill, and that's something that different states have taken different approaches on. In terms of some of the specific questions that were in the statute, which financial institutions? There are states that go beyond banks and credit unions and will include include money transmitters, include nonbank lenders. Some of them Virginia's does cover insurance. We did not do a thorough scan on insurance, but that's often a category that's not covered. We see banks and credit unions, though, really as a starting point for this. In terms of who would be potentially subject to a transaction hold, one thing that came up immediately in our stakeholder discussions, and this is an outlier relative to the laws that are in place in other states. But I think is is really important to note is that these transactions can happen, can affect someone at any age. And if you look at the FBI numbers, right, assuming that if everybody did report their age, you know, if you have about a quarter from age 60, that would mean three quarters were 60. And if you look at the FBI reports, there were many categories of of cyber fraud where people incurred losses through these transactions, where the majority of the people filing complaints were were 60, sometimes even 50. And many of the state laws that are currently in place, the protection only kicks in at age 60 or 62 or 65 unless the person is disabled or has an infirmity or or something like that. And so we really do see the importance of having something that's broad based in terms of age and not overly specific in terms of what makes a transaction suspicious. Scams and fraud evolve frequently. There are some characteristics, some signs that a bank or credit union employee may be able to distinguish, but there's no sort of single pattern. And even if there were, it could, you know, it could change over time. In terms of who else would need to be notified, there was a back and forth on our conversation about the use of trusted contacts. So this is a very common practice in other state laws. We also see it in securities where the account holder can name somebody else. It can be a family member, a friend, a neighbor who should be contacted in the future if there's a problem with the account. And the idea there is in one of these scenarios, someone walks in, says they want to withdraw $10,000. There's a hold placed on the account. The bank or credit union notifies the trusted contact, and that trusted contact can then either they may be able to validate it and say, you know, this is actually this is legitimate. They may also be able to, you know, interact with the person who is trying to make the transaction and say, hey. I really don't you know, this is not what you think it is and can sort of help them understand the nature of it. And that's, you know, that can work really well in practice. But there are other scenarios where the trusted contact may be involved in facilitating that transaction. We had heard similar things about powers of attorney. There are many cases where having an individual with a power of attorney is incredibly helpful and powerful for for people who need one. And there are cases where the power of attorney could be engaging in a form of financial abuse. And so we generally encourage the adoption of trusted contacts. We would suggest that those people be identified in advance, you know, in a routine moment if someone is opening an account or if they're meeting with someone about their account. They should also be revised periodically, and it is something that people should be able to update that, you know, it may be that the trusted contact is no longer available or there's another person who's more comfortable. That does raise its own challenges. Right? If you change the trusted contact to somebody else and that person may try to to fraud the customer, then that's an issue. So that is something that, you know, we see as important but not necessarily mandatory. We did talk about time periods, and and states have put in various various times for an initial hold and various procedures for an extended hold. If there is a a court investigation, an adult protective services investigation, if there's some need for a court order, you know, some need for additional time, We had suggested fifteen to thirty days. We did not have specifics there. The number one thing that we had heard in terms of time frames was just giving giving the powers that be enough time to do their work. If a hold is filed and adult protective services is not able to make an assessment, that hold probably shouldn't be lifted until that assessment is complete. The there was a question in the statute around notifications. We do think it's it is often appropriate for these incidents to be reported to law enforcement and adult protective services. Our understanding is that often happens already. We did also suggest it may make sense to provide anonymous information on suspicious transaction holds, how often they're happening, where they're happening, to state authorities for tracking. We leave which authorities those are up to the committee. There was a question around access to funds in the account beyond that one transaction. Let's say someone has $15,000 in their account. They're attempting to withdraw 10,000 at one time. That's the suspicious transaction. In general, and stakeholders are in agreement on this, only that one suspicious transaction should be held. The people should have access to the remainder of the funds in their account so that they can pay bills, get groceries, do all of their day to day things. There was one comment we had received around other ways of preventing additional fraud, such as cutting off online access to an account. We don't have a position on that. I don't know, first off, how technologically feasible some of those methods are. And second, sort of how they're how they were perceived or how they would work in practice. I think the idea that behind it is to provide some way of showing greater urgency and preventing, for an example, a a third party from taking over the account in a scammer fraud situation. The other a couple other things that came up. One is we did suggest under the the catch all of other issues that were raised. We do suggest that institutions that would be required to have a suspicious transaction hold policy in place train their employees. Our understanding is that already happens. In most cases, there are many types of training already out there offered by offered by AARP, offered by the American Bankers Association, regulators, others. And then we do have this immunity question, and it is it's a delicate balance because we want to make sure that institutions are not penalized when they are reporting a transaction that should rightfully be reported. There may be scenarios where it's an employee of the financial institution who is participating in or supporting fraud, unfortunately, and that is a scenario that we would we would need to have addressed. There are other there are other situations where the let's say the transaction was legitimate and you have a customer who has been waiting for the down payment on their home, for example, to clear or some major large transaction that's important. Right? And they are frustrated with the bank for holding it. Now I think that's a different scenario than what we have heard about in practice, which is someone engaging in a potentially suspicious transaction. That transaction is flagged, and then you have an angry customer who doesn't understand why they're not able to access their own money. And part of the general risk in all of this is, you know, we this is a way to introduce friction. Friction is important. Buys time to help resolve the problem. Buys time for investigations as appropriate, and it's an ability to safeguard someone's funds. We also have so many transactions that we engage in today that are frictionless. And part of the the delicate balance here is placing a hold on a transaction and someone saying, oh, I'll either I'll close my account or I'll I'll do this another way. I'll do it through a nonbank payment app or I'll you know, someone who is really desperate to make that transaction, it's still hard to intervene. But that's where he landed on suspicious transaction holds. So any questions on that?

[Edye Graning (Vice Chair)]: So, committee, the question for us is, do we want to go forward with putting the bill together to support this in Vermont? If we do, we can do that as a committee bill. You want to think on it and come back on Tuesday, we can do that. Take time to read the report, but that's the question for us. What do you want to do with that?

[Jonathan Cooper (Member)]: With each report to be one committee bill that addresses what's raised in just one report or in both reports?

[Unidentified Committee Member]: I'm sorry. The report that we just The one we just

[Michael Marcotte (Chair)]: wrote. Yeah.

[Unidentified Committee Member]: There's probably no more thinking than I'm gonna be doing between now and this issue. Okay. And and I would just from my perspective, I'd like to see a bill.

[Michael Marcotte (Chair)]: K.

[Unidentified Committee Member]: Do we wanna do a bill that's gonna help out people? Correct? I mean, that's the question. Who wants to say no to that?

[Unidentified Committee Member]: And I'm not talking about the details and all that. Right. Right. Once built, you know, just about 30 different bills or I mean, like, piece of states that have legislation. Right. They might have all sorts of different takes on the the issue. That's just in how

[Unidentified Committee Member]: we Yeah. Yeah. No. No. But the question is is do we want to move forward on a bill?

[Edye Graning (Vice Chair)]: Yes. Anything else?

[Unidentified Committee Member]: I I definitely would want to to I think if if it's crafted properly,

[Michael Marcotte (Chair)]: I think it really you

[Unidentified Committee Member]: know, one thing that comes to mind is we, you know, usually these are first time transactions and because of the nature of these fraudsters, they are constantly reopening accounts. So I think just flagging a first time large transaction with a company would help a lot. You know, just me, I'm thinking about how I can craft a bit, but yes, very supportive of it.

[Unidentified Committee Member]: Yeah, dollars 4,000,000 in losses in my age bracket, speaks to my heart.

[Jonathan Cooper (Member)]: Let's see what we can do.

[Michael Marcotte (Chair)]: Yeah, I'm in favor.

[Edye Graning (Vice Chair)]: Okay, so does anyone want to take the lead and work with Joe and some of the other folks that were on the committee to craft it, or do you want to think on that?

[Jonathan Cooper (Member)]: Be a part of

[Unidentified Committee Member]: that.

[Edye Graning (Vice Chair)]: You want to do that? Sure.

[Jonathan Cooper (Member)]: Yeah.

[Edye Graning (Vice Chair)]: Okay. I'll have you work with Maria and Joe and Chris and help with some of the other folks that were involved in. Great. Okay. We have

[Michael Marcotte (Chair)]: another report.

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: Great. So moving on to CoorsDebt. This was one we had most of the same stakeholders. So the Vermont banks, the Vermont credit unions, Vermont legal aid, the AG's office, and the Vermont network. I know some of them are in this room, and I really do appreciate their participation in our conversation around this. And I'll I'll get to what course debt is and and sort of what we went through in in in a minute. I will say this is an area where DFR is neutral. We did not have consensus on a bill, and we pointed that out in the report. This is a more emerging area, I would say, in that such as transaction holds. We've identified 26 states. Coerced debt, there are six states that have laws with coerced debt protections. Most recently in New York, governor Hochul signed a bill right before the holidays. So we were tracking this, you know, right up until until the last minute. And I will use the Donald Rumsfeld quote about unknown unknowns here. I think part of the challenge that I'll I'll get to is just that because a lot of these laws are very new, there was one that was passed in 2019 and the others have all been in the last three, four years. There's not a deep track record for us to go on in terms of balancing the sort of positives and negatives. So what is a a core step protection? So it's a if you think of identity theft, it's not quite identity theft. It's sort of a different category that kind of falls through the cracks in terms of the existing protections that we have. So the classic example for coerced debt is in a domestic violence situation where an individual is coerced into taking out loans for an abusive partner, maybe credit cards, maybe a car, maybe other things. There was a story published during the debate over the New York law last month that was about an individual who whose partner had coerced her into signing a car loan under duress, she did not even have a driver's license. She did not know how to drive. And so the car was clearly not for her benefit, but she was dealing with the payments on this loan. And in many of these cases, it's either, you know, you have someone who is dealing with the original creditor and trying to make payments or it's in collections. It's tarnishing their credit. Tarnishing credit can make even things like finding an apartment more difficult. And so that's the sort of classic example. But we have seen these laws in some other states also address issues such as elder abuse. If someone is coercing debts upon an older person. It could be a younger person. This is something that has come up, for example, around youth aging out of foster care where someone has been using their credit record to take out loans that or obligations that they may not have known about or have had the ability to contract. We have lots of protections in place for traditional identity theft. We don't have really easy ways of dealing with these situations where, as one state has defined it, where there's a lack of effective consent, that maybe someone did consent, but it was under duress. And so these various state laws enable someone to challenge a debt that they ostensibly owe because they were coerced into it or it was a loan that was taken out without their consent, sometimes even without their knowledge if their information was used by a partner or family member or others. And the challenge here is really a matter of scale and risk and, like I said, unknown unknowns. You could see scenarios where a larger number of people see an opportunity to get out of paying a debt, and, unfortunately, they take advantage of it. We had seen this it's mentioned in the report that there was a there still is federal law providing protections for human trafficking survivors to challenge debts and completely well intentioned, excellent regulations developed around it. And then there were incidents where people on social media had said, hey, you can get out of debt and raise your credit score a 100 points by filing these forms and claiming that claiming that you were a victim of trafficking. No idea how widespread that had been or or sort of how that had gone. But obviously, there are things there are falsehoods on social media that can circulate very broadly, I think, everyone here in the room knows. And if you did have a scenario where you have a large number of people challenging debts, you know, that could have a negative effect on on banks and credit unions and other lenders and their ability to operate. Very similarly, if you have even if it's not a large number, but you've introduced a new risk into the marketplace, you know, that risk needs to be priced somehow. And is it through higher interest rates? Is it through scrutinizing borrowers more carefully when taking out a loan? Is it, you know, not making as many loans? We don't really know. And I think the other side of this picture is what we've what we've heard from advocates and what we've seen. You know, in other states is there are scenarios where it's really it's a very limited number of people who take advantage of this provision, who are in dire straits, who may or may not be able to make payments on the loan anyway. And this is a loan that was going to be that was going to be written off. And so that issue of of scale is really the thing that we've struggled with because it is new. We don't have a

[Unidentified Committee Member]: ton of data to go on.

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: And I think there's this there's a trade off to acknowledge that, you know, there should be a process that is easy for survivors and that does not involve interactions with law enforcement and going to court. We know that those are known barriers. We want the people who need the help to be able to be helped. We need to balance that with, you know, easy process with the challenges that lenders may face if, you know, the scale for this turn you know, upends their predictions for how markets would go. And we just don't it's just an area where

[Jonathan Cooper (Member)]: we don't know a lot.

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: In terms of what we've seen in in the other states, so six states have a bunch of different provisions. There was also a petition that was made to the Consumer Financial Protection Bureau in 2024 for them to look at changing the definition of identity theft to include the concept of effective consent. They received 50 comments on it from a wide range of stakeholders. That's all public record on regulations.gov. It's a very interesting discussion, very similar to the discussions that we had. But in terms of what states have done, all of the state laws have been fairly similar and that there is an ability for someone to challenge a debt. In Texas, it was done as part of their identity theft statute. They did not use the term coerced debt, but they did introduce the concept of effective consent. Varying states have talked about coerced debt. Others have also used the concept of economic abuse, which is someone unfairly controlling the finances of another person. One of the biggest distinctions across these states is what types of debt are eligible to be challenged. And Connecticut is the narrowest that we saw in our review of the six, that it was unsecured credit cards only. And so that doesn't even include a student loan or a buy now pay later or a personal loan or something else that's also unsecured. Connecticut's was also only for new loans taken out after the law went into effect. Someone could not challenge an old debt. So that's sort of the narrowest. There are other states that where it is any type of unsecured debt. So credit card, personal loan, something like that. There are a couple of states that include various forms of secured debt. The statute that just passed in New York found an interesting way of dealing with this. If you're thinking of a secured debt, this is a debt where there is collateral, like a vehicle loan or a mortgage. And there are a couple of concerns that that raises if someone tries to challenge that debt. One is, you know, if the person still is challenging the debt and still has access to the collateral, then they're getting an unfair advantage. Right? They're no longer paying for the car or the house, but they still have it, which that doesn't sound right. But the other is if it's a secured debt, it may be difficult to repossess the collateral or foreclose on it. It may be it may be securitized. There may be other other interests involved. So security gets more complicated. The way that New York dealt with this, which was kind of novel, was that, let's say, in the case of a vehicle loan. The the the woman I had mentioned earlier who had was responsible for an auto loan despite not being able to drive, she were to challenge that debt. The car could be repossessed, and she she can't drive it. She has no interest in in maintaining the car. We did hear from advocates that there are many cases where, you know, it wasn't a vehicle that they could even use because their partner had had to kept the keys to it. It could be repossessed. And let's say if they were underwater on that car loan and there was an amount that was still owed, they would not be responsible for that remaining amount. But the collateral on that secured loan could be repossessed, and that was the way that they were were dealing with it. There was also a provision in several state laws where if the individual if the victim is able to name the perpetrator, the person for whom they took out the loan, the creditor can go after the perpetrator for for that debt. And so in some scenarios, it's possible the debt might have been written off. But in but now they do have someone that they can pursue for that debt and maybe maybe they might be able to collect on it. All of the sort of challenges to a coerced debt involve providing some type of information to the creditor or the debt collector, usually some type of a sworn statement, that the individual provides and documentation. Most of the states we've looked at will accept a police report. They will accept an FTC identity theft report. They'll accept a court order. The one thing that is sort of important here and novel on a coerced debt context is that they will accept a sworn statement from a qualified third party professional. And part of this is making sure, again, that victims or survivors have relief without necessarily going through the courts. The qualified third party professional, depending on the state, it could be could be a counselor, could be a social worker, could be a physician. I think in some states, it could be a clergy member. It can be someone who is licensed or trained to work with domestic violence or sexual assault survivors. You know? And you can think of other other people who might work with other populations, whether it's, you know, the youth or or older Vermonters, you know, who might also be on the front lines. And so they're submitting a sworn statement as well, and so that becomes part of the package of documentation. In terms of what happens when someone files in one of these states, the if there's any collection activity that ceases, the information is flagged on a credit report as being disputed. There's some type of investigatory process by the lender. And if it turn if the lender, through the course of the investigation, determines that, yes, this debt is coerced, then typically the person is, released from that debt, and there's a request made to the credit bureaus that it be deleted. Now I know we got into a conversation during the housekeeping bill about FICRA preemption. The main coerced debt law, which is the oldest in the country in 2019, was challenged on FICRA grounds. It was partially upheld. But FICRA is an incredibly and FICRA preemption are incredibly complicated. We don't have an opinion on exactly sort of what contours with regard to credit reporting agencies do or don't pass muster. Several of the more recent state laws, though, instead of making a requirement on the credit reporting agency itself, They put a requirement on the lender or the debt collector, the the furnisher of the information to tell the credit reporting agency either that it's disputed or to request that they that they delete it. I'm not an attorney, so that's not something that I can really weigh in and too much detail. Question.

[Jonathan Cooper (Member)]: Sure. FICRA, that was a that was a that was a federal decision.

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: It was a state. Where where was that? So so FICRA, Federal Fair Credit Reporting Act is a federal law. It was the main law was challenged in federal court. Which district? Believe it would have been the it would have been the main main districts of First Circuit. Thank you. Sure. So that's and like I said, it was upheld in part, and so but that is always part of the part of the uncertainty here. We did not opine on question of changing the identity theft statute in Vermont. It is a criminal statute. Generally speaking, states that have passed these laws, and some of them, they have made it a civil violation for someone to force someone else to take out a debt, and that does enable the the lender or the debt collector to pursue the debt from from the alleged perpetrator. But we didn't want to get into sort of criminal matters here. There are many of the state laws do retain all of the other abilities that a creditor would have to collect on a loan and would enable them to collect from the alleged perpetrator. There was I mentioned with Connecticut, there was this issue of new versus existing, and a couple of the other state laws made that determination as well. Obviously, if it's for new deaths, then that restricts the scope. And over time, it would be a greater number, but it doesn't provide as immediate relief to survivors. Just two more things, and then I will take questions. One item that came up in several state laws was the presence of procedural safeguards that typically you'll see the way these statutes are written that the victim challenging a debt will provide they will provide contact information, an address, phone number, etcetera, and that they will request to only be contacted by those means, that that contact information not be shared with the alleged perpetrator. There are a lot of other provisions we see in state statutes for an individual's safety. Similarly, there are situations in some state statutes where someone is not required to name the perpetrator if they are able to state that there is some risk of harm to themselves, their family, family pet, etcetera. There are some provisions in states for virtual court hearings and for privacy and confidentiality, those kinds of things. Last thing, not really the domain of this committee, but it's an interesting issue to think about. If a debt is, ultimately released, normally, when a debt is forgiven, that individual is liable to pay, federal income tax on that amount. There are some exceptions. I know of a couple for student loans as an example, but there is this issue of someone receiving a tax bill in response. Obviously, we can't do anything about the federal side of it. I don't know about the state tax treatment, but that would be another wrinkle, to consider, in terms of the broader the broader reaches of this.

[Edye Graning (Vice Chair)]: Any questions for Joe?

[Unidentified Committee Member]: I this may or may not be something you can answer. Maybe it'd be better for Chris. But when somebody I keep going through my head. I was gonna be abused, I think. Yep. And I can see someone just racking up $50,100,000 dollars in credit card debt saying, oh, I was coerced and doing this over and over and over again. In the in the way credit reporting is done, does it show, like, if there is an agreement that's made where someone gets debt forgiveness, does it explain that? What I'm trying to do is, can the bank at least assess risk? And I know I'm hitting a touchy subject here, and it's a tragic thing, but there are a lot of people who continually get in these repeat abused relationships. They either go back to that same person, or they go into abusive relationship after abusive relationship after abusive relationship. And I think it's a little unfair to ask the banks to take on that kind of risk when someone is a habitual offender, if you'll pardon the phrase.

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: So in terms of credit reporting, you know, I don't recall all of the codes offhand, but, typically, there are different ways that debt I think part of the challenge here that it's at the state level was I don't know how credit reporting agencies may respond to this. But, typically, you know, if you see a debt on a credit report, you know, there are different flags or markers that, you know, a debt may be paid in full as opposed to paid for, you know, settled for a smaller amount or or forgiven or what have you. And so, you know, it is possible that you could see those items if they're deleted from the credit report. Right? Then that's then that provides a complication. But it's it's hard to know how the exactly how the credit reporting companies might respond to this partly because of the newness of it. I will say there are one of the state statutes we looked at, I think, only allows someone to contest it, contest the same debt once. So that's a safeguard to make sure that it's not abused. There are I think part of this, too, is getting into the documentation requirements. And, for example, you know, if you're specifying who the third party qualified third party professionals are, you know, depending on who they are, where their professional certifications are, it may be possible to. You know, ensure that some of these challenges are more legitimate. Another option would be if you were to just tracking aggregate numbers in some way, if it turns out that there is one person who has signed hundreds or thousands of these, then maybe that professional needs some additional scrutiny.

[Unidentified Committee Member]: So it's a little unclear when the whole in each other's face. When the whole is actually placed, is it when the claim is filed or is it when it's been adjudicated by whoever is receiving that claim?

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: So there's usually an initial within five or ten days, usually if the documentation is provided and filed, you know, collection and any the collection activity would cease, that they would not attempt to sue the borrower. They would and that they would notify credit reporting agency that the item is disputed. And then it was after the investigation, and some states will say that they have thirty days or, pick thirty business days or or a longer period. When the investigation is completed and they have a disposition, that's when a final determination would be made on on the debt. One thing, again, not an attorney, and so I can't necessarily speak to the implications of this. Some of the states also had language about how that period would either be told or not told for purposes of a statute of limitations because normally there is a period of time during which someone can be sued over that debt and, you know, is someone placing holds to try to run out the gun. Right.

[Unidentified Committee Member]: The reason why I asked between the difference, what takes effect when the claim is filed versus, I call it adjudication, you've looked at the documentation and you've made some determination, either that the claim was not proper, or that it was. And in the latter case, you've had given people a chance and you've made a determination, yeah, this was a chorus death.

[Michael Marcotte (Chair)]: Where am I going here?

[Unidentified Committee Member]: Because I would have the same concern around consequences on filing the claim itself. Not maybe same level that you have, but definitely a concern. But when the the claim has been adjudicated, and, yeah, it was really coerced. I think that's a different story. Now that doesn't answer the question of for the banks, I guess, of how they can how they can what they should do initially, in order to mitigate that risk, I guess, right? I don't know the answer to that, but it just seems to me it's much more powerful when you've gone through a process and you've made a determination, hey, that's real good. And nothing's gonna happen. They're they're still obligated to pay on a coerced debt. That's kinda scary too. Yeah.

[Jonathan Cooper (Member)]: Emily?

[Edye Graning (Vice Chair)]: It's on screen.

[Emily Carris Duncan (Member)]: Hi. One question. Did any of these statutes that you reviewed for other states include recommendations for counseling or any kind of wraparound services?

[Joe Valenti (Director of Policy, Department of Financial Regulation)]: Not that I can recall. It is interesting though, the way that some of the state statutes explicitly recognize the practitioners who provide those types of services as being eligible to file a report.

[Emily Carris Duncan (Member)]: Okay, thank you.

[Edye Graning (Vice Chair)]: Any other questions for Joe? So we have this bill already on our wall. So this is three eighty five, I think. One that we can you have a question?

[Unidentified Committee Member]: No. I'm waiting for you to finish.

[Edye Graning (Vice Chair)]: Okay. I can go back and get some modifications in there based on this report, based on what happened in New York, based on more input that we've had. And then I'd like to bring it back to the committee. We can actually discuss what the law could look like here in Vermont. I

[Unidentified Committee Member]: would like that. Okay.

[Unidentified Committee Member]: I understand the concern about the potential of it being, I don't want to say abused, that's not because when I think of this, I think

[Edye Graning (Vice Chair)]: it's Not being used for its intended purpose. Correct.

[Unidentified Committee Member]: And I'm thinking, even when I signed on to it, the thing that came to my mind was spousal abuse. And I just know the cycle and it's too bad that there wasn't, and I don't know if this is even possible, but cases where there is spousal abuse,

[Edye Graning (Vice Chair)]: some sort of

[Unidentified Committee Member]: defeats the intervention. And sometimes people that are in that particular situation don't, they need help. They need help with, processing and I don't know if you can write that into the bill.

[Edye Graning (Vice Chair)]: So yeah, we would have to understand.

[Unidentified Committee Member]: It's a very sensitive issue for me. So it's just the cycle just keeps going. And it would be nice to be able to say, and they would deal with that problem is that you're going to get some sort of counseling on it. And I know how you would write that to a bill, but if you could.

[Edye Graning (Vice Chair)]: Well, so we would want to understand what's already in law. And then it's really not our committee's purview. This is a piece that is our committee's purview. So that's a piece to recognize. Also, the victim's fund is woefully underfunded. So the supports that are available in the state are less than they should be because we're not so there are a lot of pieces. But we can get testimony on a portion of that, probably not but to understand what is available in Vermont for victims and what is going on. Emily?

[Emily Carris Duncan (Member)]: Michael got to actually what I was gonna say. I just wanna second that point, if there's some sort of way that we can think, because banks are kind of, I mean, it's an interesting position that they're in because of the point that was made about them being kind of places of trust. And I think we're seeing so much more of this fraud going on. So I'm curious about how we might be able to put something in that would allow for wraparound services or recommendations or getting people further help.

[Unidentified Committee Member]: If we're thinking around ideas around the bill or anything like that, that piece around what are the consequences when you just make a claim versus actually getting a determination. That is important to me anyway. And it might narrow the scope of the impact, unintended impact on financial institutions, if you push people. I I don't know, thirty days, ten days, I don't know. But I didn't say that to everyone, but maybe some attention paid to that issue. Great.

[Edye Graning (Vice Chair)]: Any other discussion on this? Thank you, Joe. Thank you, Benning. Our chair is back. I'm going to turn the floor back over to Nashville, Shelby.

[Michael Marcotte (Chair)]: So first, suspicious activity. Everybody's Jonathan to go Cooper

[Edye Graning (Vice Chair)]: is going to take the lead

[Michael Marcotte (Chair)]: on that. Okay. Great. I think that Carris, you know, he's got some languages, thinking about when things are going to get in there, see what we can come up here.

[Edye Graning (Vice Chair)]: Do folks want I mean, do folks want to go forward with that? Is there anybody that on the forward step, though? Kind of saw nods, but I didn't go around the same way we did on the other one.

[Jonathan Cooper (Member)]: I'm happy to move forward with that.

[Michael Marcotte (Chair)]: We haven't had the language yet. New language. New language. Right.

[Edye Graning (Vice Chair)]: So we'll

[Michael Marcotte (Chair)]: take a look at that, and then we'll see what goes on from there. Okay. Anything else? Great. Joe, thank you for, again, coming in. Appreciate it. Thank you for the time and effort at BFR. It's getting to all the reports that we've asked, they've never did. They are really helpful. Thank you. Yes, I know we ask for a lot of reports, but we try to start taking them more seriously than we have in the past. Thank you. Maybe I think that's it for today. I did that. I did that. I already booked it out. Great. You'll see the agenda will be posted tonight. I went through it with you before we broke the line. So everybody had a good weekend, and we chatted again. We started by we did morning and night before walking.