Jon Corzine Is Our Next Governor
Defeats Doug Forrester for Election
Democratic Sen. Jon Corzine defeated Doug Forrester in the gubernatorial election on Nov. 8, 2005. Corzine had 54 percent of the vote while Forrester pulled 43 percent of the vote in what was considered one of the more bitter races in recent history.
The race will also go down as the most expensive race in New Jersey history, with Corzine spending about $43 million to Doug Forrester’s $30 million. It left many people wondering why anyone would want to risk so much of their personal fortune for a job that is not going to be easy, considering the state is facing so many financial issues at once. There must be tough decisions made in order to right a state that’s awash in debt and faces major pension contributions along with a Transportation Trust Fund that’s just about out of funds. Making those tough decisions could put the governor-elect in the direct path of those who had supported him.
Before Corzine confronts those tough state issues, he must make an extremely difficult appointment and name a successor to his Senate seat. Acting Gov. Richard Codey, who was the front-runner, has pulled himself out as a contender. That leaves many Congressional democrats lobbying for the appointment. Congressman Robert Menendez is considered the front-runner based on his seniority and campaign funds held to date, but Rep. Rob Andrews and others are very interested in the seat. It is an important decision because it will give the public a glance into what Corzine’s priorities are at this time.
COMPROMISE ON IOLTA
The IOLTA (Income on Non-Interest Bearing Lawyers Trust Accounts) working group’s recommendations to the Supreme Court have been accepted and created the new Best Customer Standard. The Best Customer Standard replaces the Reasonable Return Standard as the method for IOLTA to evaluate the reasonableness of returns provided by banks. Financial institutions must implement the new standard no later than Jan. 31, 2006. Attorneys should be aware that:
• The Best Customer Standard applies only to IOLTA accounts with average balances of $100,000 or more. The yield on accounts with average balances of less than $100,000 must be comparable to that of similarly situated non-IOLTA accounts.
• Attorneys with accounts in financial institutions which cease for any reason to be an approved depository for attorney trust accounts under Rule 1:21-6 shall move those accounts to an institution ranked in the highest yielding 50 percent of participating banks (that is, in the first and second quartiles as identified by IOLTA). IOLTA will assist attorneys in this process should it become necessary.
While the IOLTA issue has been a continual focus of NJBankers and the Supreme Court for many years, it was truly a unique experience watching the legislative, administrative and judicial branches of government work together. Dee Miller of Legal Services, Ellen Ferrise of the IOLTA Fund, Rob Tillman and Doug Wheeler from the Department of Banking and Insurance, along with counsel from both houses of the Legislature, especially counsel to the Assembly Democrats, William Castner and NJBankers board member Dennis DiLazzero worked tirelessly to craft a workable compromise. All should be commended for their efforts.
POTENTIAL LAME DUCK ISSUES
As always in New Jersey, there are many issues that confront the banking industry, but in a lame duck legislative session, no one can be sure what will happen at any time. It is a mad rush by legislators looking to pass bills before the new governor takes over and can be problematic for many interests.
NJBankers Counsel Mary Kay Roberts and I have been closely following a number of bills that could add costly burdens to banks. S-1335/A-2910 (Bucco/Coniglio) (Cohen/Deignan/Watson-Coleman/McKeon) would mandate all bank ATMs be retrofitted with ATM panic buttons. The bills are strongly opposed by NJBankers because of many factors. There are enormous cost factors along with the potential of false alarm abuse. Law enforcement agencies have continually opposed the bills as well and insisted that it could lead to a very dangerous, even life-threatening situation for an ATM user.
A-3440/S-2435 (Cohen/Russo) (Kean) is supported by NJBankers. The bills would require changes to the laws governing health insurance policies sold in New Jersey so businesses may take advantage of federal Health Savings Accounts. If the bill does not pass, it will make New Jersey the only state in the nation where employees and employers cannot take advantage of the federal tax savings HSAs have to offer. The bill has passed the Assembly and is pending referral in the Senate Commerce Committee. NJBankers, the New Jersey Business and Industry Association and the State Chamber of Commerce have united in pushing this worthwhile legislation.
NJBankers is also closely following A-3544 (Deignan), which would set up a special court comprised of experienced judges who would rule on commercial disputes involving contracts, Uniform Commercial Code transactions, banking and insurance matters and many other issues affecting the business industry. New Jersey is surrounded by jurisdictions with successful business courts including New York, Delaware, Pennsylvania, Connecticut, Massachusetts and North Carolina. NJBankers is working very closely with New Jersey State Bar Association President Stuart Hoberman and many other business interests to seek passage of the bill. A-3544 passed the Assembly on June 30, 2005 and was referred the Senate Judiciary Committee.
Other bills that are of concern to NJBankers are A-3932 (Cohen) Payroll Wage Card Protection Act, Financial Privacy and potential tax increases.
JEBPAC AND ABCs
Congratulations to JebPAC Chairman Jim Hyman who successfully broke our record-setting fund-raising year and helped raise more than $80,000 for the NJBankers JebPAC. Thanks to all for your continued support!
The Action Banker Councils continue to be a great opportunity for our bank members to meet with the legislators from around the state. Keep an eye out for the latest ABC meeting at the famous Mastoris Diner.
Robert J. Tartaglia is vice president and director of government relations for the New Jersey Bankers Association. He can be reached by e-mail at email@example.com.