Under the Dome

Dome: Revised workers' comp overhaul set for vote

May 31, 2011 

A revamped compromise bill to overhaul the state's system for compensating workers injured on the job is scheduled for a vote on the House floor today.

A House committee passed the measure unanimously last week.

"We had a big kumbaya session," said the bill's primary sponsor, Rep. Dale Folwell, a Forsyth County Republican who is speaker pro tem.

Folwell's initial bill triggered hordes of injured workers, union members and others to descend upon the General Assembly in opposition to the measure. But at Folwell's urging, the opponents had a series of meetings with supporters, led by the N.C. Chamber, to work out a deal.

"At this point we support it, not because it is perfect, but because it's a reasonable compromise," said Victor Farah, a Raleigh lawyer who represents injured workers and was involved in the negotiations.

The most hotly contested provision in the original bill would have capped income benefits for most workers at 500 weeks, a little more than 91/2 years - except for the most severely injured workers with specified injuries, such as the loss of both hands or paralysis. Although that cap still stands under the revised bill, a new exception has been carved out.

Workers would be able to qualify for "extended compensation" if they can prove that they have "sustained a total loss of wage earning capacity."

The compromise augurs well for the bill's future, said Bruce Hamilton, a Raleigh lawyer who represents insurers and employers in workers' comp cases.

"I think there are people maybe not thrilled with it on both sides ... but everyone can live with it," he said. "I don't see anyone trying to derail it or amend it tremendously."

Hagan on bank loans

North Carolina Democrat Kay Hagan led a group of 39 U.S. senators who are asking federal regulators not to require higher down payments for certain mortgages.

In a letter Friday, which was also signed by Republican Sen. Richard Burr, they argue that regulators are not following the legislative intent of the new Dodd-Frank financial reform, which included several provisions designed to prevent the type of lax mortgage lending that was a major cause of the economic crisis.

The law requires lenders to retain at least 5 percent of the mortgages they issue, instead of bundling and selling all of them on Wall Street as mortgage-backed securities. The thinking was that if lenders were forced to hold more of the loans they issue, they would be less inclined underwrite loans to people with poor credit.

But some legislators worried that the rule would raise the cost of all mortgages, even those that were not the cause of the crisis.

Hagan, along with Sen. Mary Landrieu of Louisiana and Johnny Isakson of Georgia, included a provision in Dodd-Frank that exempted certain loans from the 5 percent rule. It was left up to regulators to determine how the loans, called qualified residential mortgages, were defined.

In March, regulators ruled that QRMs must include a 20 percent down payment - an interpretation that Hagan and others find too strict.

"The extensive additional requirements for QRMs in the proposed rule swing the pendulum too far and reduce the availability of affordable mortgage capital for otherwise qualified consumers," the senators wrote in their letter.

How QRMs are ultimately defined will have a enormous impact on borrowers, the mortgage industry and Fannie Mae and Freddie Mac. Regulators say that 20 percent down is necessary to reduce the overall risk that such mortgages will default.

Synthetic drugs banned

North Carolina will join a wave of other states opting to ban synthetic drugs sold under the guise of seemingly innocent products such as bath salts and incense.

The products include synthetic cannabinoids or a synthetic cocaine. In March, the governor signed a bill that makes the sale, manufacture or possession of these products a felony in the state, effective Wednesday.

The products, generally sold over the Internet and in tobacco shops, come under many labels and in various forms, and regulators are worried about their possible side effects.

In March, the federal Drug Enforcement Administration issued an emergency ban on five synthetic cannabinoids, temporarily classifying them as controlled substances for the next year. North Carolina's law is part of a broader move by nearly 30 other states to improve enforcement of the national ban.

Staff writers David Ranii, David Bracken and Eden Stiffman contributed.

david.ranii@newsobserver.com or 919-829-4877

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