Costly reform bills routed to committee

Two reform bills stemming from the Harmon scandal that cost investors at least $6 million have been routed to the Assembly Ways and Means Committee.

The committee handles all measures that could cost the state extra money. The mortgage investment reform measures, AB64 and AB72, have fiscal price tags of at least $2 million, and Ways and Means Chairman Morse Arberry, D-North Las Vegas, already has said bills that cost less are doomed.

"All I know is 'Moose' (Arberry) has assured me a fair hearing," said Assemblyman David Goldwater, D-Las Vegas.

Goldwater figures the steep costs may be a way for the attorney general's office and the Financial Institutions Division to retaliate for criticism they received from him last year.

He was the chairman of a highly publicized subcommittee that held numerous hearings in Las Vegas into the collapse of the Harmon Mortgage Co.

Goldwater and other members of the subcommittee faulted the attorney general's office and the Financial Institutions Division for delays in shutting down the company.

But Deputy Attorney General Anne Cathcart, the attorney general's chief legislative lobbyist, denied the fiscal notes are a form of retaliation.

Rather than wanting to kill the Goldwater bill, Cathcart said her office wants it to pass.

About 700 people had $23 million in investments jeopardized when the state shut down the Harmon company. A court-appointed receiver has been able to recover about $17 million of their investments.

Goldwater's AB64 sets up licensing requirements for mortgage companies, along with mortgage agents. The companies also must meet minimum net worth standards.

AB72, sought by Secretary of State Dean Heller, calls for treating the investments made by mortgage companies as if they were stock. Companies would register with Heller's Securities Division and they would have to prepare a prospectus.

archive