Diego: Credit relief bill as good as dead

“It will be vetoed.”

That is the certain fate of Senate Bill 14-48—the measure that seeks to provide credit relief to certain delinquent borrowers—at the desk of acting Gov. Diego T. Benavente.

According to Benavente, he has conferred the matter with Gov. Juan N. Babauta, who is in Los Angeles for the 2004 Business Opportunities Conference.

Benavente said the governor agreed with his opposition to the bill, which has raised constitutional concerns.

The acting governor had also heeded concerns by the Commonwealth Development Authority that the measure would push the CNMI’s money-lending agency to financial disaster.

As of press time, though, Benavente has yet to make the veto official. He said Thursday that the veto might come within two days, subject to his consultation with Babauta.

Before Benavente issued the definitive statement about vetoing the bill, House leadership spokesman Charles Reyes Jr. said majority of the lawmakers still expect the measure to be signed into law.

Reyes—as well as Senate President Joaquin Adriano—could not be reached for comment as to whether or not the leadership of both chambers in the Legislature intend to override the anticipated veto, after Benavente declared the bill’s fate.

The number of lawmakers who voted in favor of the measure indicated that the measure has a strong chance of overriding the governor’s veto.

The Constitution provides that the Legislature may reconsider a bill for it to become law despite the governor’s veto if the measure musters the support of enough lawmakers.

“If two-thirds of the members in each house vote upon reconsideration to pass the bill, item, section, or part, it shall become law,” the Constitution states.

Seven Senate members voted in favor of the bill—or more than two-thirds of the Upper House’s membership—with only Sen. Joseph Mendiola abstaining from the voting. Sen. Thomas Villagomez was absent.

Majority of the House members supported the bill, garnering a unanimous vote from nearly all 16 members present during its voting. Rep. Arnold Palacios abstained, while two other members—House Reps. Janet Maratita and Ray Yumul—were absent.

The credit relief bill has been marred by controversy, following the CDA’s disclosure that all nine senators and 15 out of 18 congressmen have close relatives who have defaulted on their CDA loans. At least five lawmakers have loans themselves, most of whom were also in default, according to the CDA.

These circumstances prompted the Office of the Public Auditor to step in to investigate possible ethical violations that might have been committed by lawmakers in passing the bill and the impact that the measure could cause on the government’s financial performance if passed into law.

The bill seeks to prevent the CDA from filing foreclosure or default collection proceedings—or any court proceeding–on any delinquent loan without first meeting with the borrower and making “good faith attempt” to resolve the outstanding indebtedness.

“For qualified borrowers who have paid CDA an amount sufficient to cover the principal amount of the loan plus any costs incurred in default collection proceedings, CDA shall consider the loan paid in full and discharge the debtor, guarantor, and others obligated on said loan from further liability,” the bill states.

The bill also seeks to reduce annual interest rate on all outstanding loans to between 4-9 percent.

For qualified borrowers who do not qualify for these reliefs, the bill provides that the CDA shall not apply more than one-half of each future payment to interest, regardless of accrued interests and penalties.