Harmon bill hits snag in Assembly

Monday, March 29, 1999 | 11 a.m.

CARSON CITY -- Assembly Republicans have temporarily blocked passage of a bill that could stop a repeat of the Harley Harmon Mortgage Co., scandal in which Southern Nevada investors lost millions of dollars.

The Assembly Government Affairs Committee Friday voted 6-4 in favor of Assembly Bill 72, which gives Secretary of State Dean Heller more clout to regulate the securities transactions by private mortgage companies. Eight votes were needed for passage on the 14-member committee.

Committee Chairwoman Barbara Buckley, D-Las Vegas, supported the bill and said, "We don't have strong enough laws." She added this bill "takes a strong step to prevent it (the Harmon case) from happening again."

Buckley said the provisions in the bill were not as onerous as some say. AB72 would require those selling deeds of trust to make disclosures, the same as required on other securities. And those who sold the deeds would have to be registered with the Secretary of State's Office.

Minority Leader Lynn Hettrick, R-Minden, led the opposition, questioning sections of the bill that require disclosure information on notes on deeds of trust.

Heller said this was a generally accepted rule nationwide.

But Hettrick, and Republicans David Humke of Reno and Bob Beers and Merle Berman, both of Las Vegas, voted against the bill. The only Republican to support the bill was Dennis Nolan of Las Vegas. When the other four Democrats, who were absent, return, passage is likely out of committee.

The committee agreed to amend another bill giving the state Financial Institutions Division more authority in regulating the mortgage industry. Assembly Bill 64 will return to committee, which will take another look at the massive amendment before voting it out.

In testimony to the committee, Heller said he opposed AB64. He said it creates a lot of new laws. "We need enforcement, not a lot of new laws," he said.

He said he "has not been impressed" by the way the financial institutional division and the attorney general's office handled the Harmon case.

Hundreds invested with the company owned by Harmon, a former state Assemblyman. His business was eventually closed by the financial institutions division for allegedly mishandling loans. There have been criminal investigations, civil lawsuits and a court-appointed receiver trying to liquidate assets tied to Harmon's loans.

State legislators criticized both Financial Institutions Chief Scott Walshaw and the attorney general's office for not acting sooner. But they said they shut down the operation as soon as possible.

A vote by the Commerce and Labor Committee on both AB64 and AB72 is likely to come later this week.

After the failure of AB72 Friday, Heller said, "This is a consumer bill, and it's hard for me to understand after the Harley Harmon case, why my fellow Republicans would vote against it."