January 21, 2026 — 6:30PM
Ways & Means: Financial Regulation Bill Expands Commissioner Authority (H.648)
House Ways & Means advanced H.648, the Department of Financial Regulation’s annual omnibus bill, on a unanimous vote. Marketed as a “housekeeping” measure, the bill spans 84 pages and rewrites large portions of Vermont’s banking, insurance, securities, and money services statutes.
The most consequential change is a formal expansion of the Banking Commissioner’s discretionary authority. Licensing decisions would explicitly require consideration of the “public interest,” a standard that is not tightly defined in statute. The commissioner would also gain broader latitude to deny, suspend, or revoke licenses based on felony convictions deemed relevant to a licensee’s duties.
While DFR framed this as alignment with existing practice, codifying such discretion reduces predictability for regulated entities and increases regulatory risk, particularly for smaller or nontraditional financial firms.
The bill also tightens statutory control over money transmitters and virtual currency kiosks, consolidating definitions and clarifying that all kiosk-based money transmission models — including crypto ATMs — fall under state oversight. DFR stressed these are not new restrictions, but the effect is to solidify enforcement authority over a rapidly evolving sector.
Consumer litigation funding companies would shift from a registration framework to full licensure, increasing oversight even though DFR testified there would be no new fees. Licensing, however, carries higher compliance expectations and enforcement exposure.
Bank lending rules are also materially altered. The existing 10 percent-of-capital cap on certain loans would be eliminated, leaving a 20 percent cap for single borrowers and allowing up to 50 percent of a bank’s capital to be loaned to a “corporate group.” Regulators argued this change reflects modern corporate structures and helps smaller banks remain competitive. The shift places more reliance on internal bank governance and post hoc regulatory review rather than hard statutory limits.
Other provisions require monthly board engagement for banks and credit unions, mandate cybersecurity insurance for investment advisers, and restructure certain securities registration calculations that could affect filing fees depending on portfolio structure.
No explicit tax or fee increases are contained in the bill, but compliance costs and regulatory exposure trend upward across multiple sectors.
Corrections & Institutions: State Property Inventory for Housing Use (H.50)
House Corrections & Institutions spent the afternoon revisiting H.50, a bill directing the Department of Buildings and General Services (BGS) to inventory state-owned buildings and land for potential housing development.
The core issue was whether the legislature should transform a one-time gubernatorial executive order into a standing statutory obligation. The governor’s order required agencies to submit an inventory by December 2025. The House proposal would require annual reporting, ongoing updates, and formal consultation with the Department of Housing and Community Development.
Committee members openly acknowledged the increased administrative burden this would impose on agencies and BGS. Several legislators questioned whether permanent statute was appropriate versus a time-limited session law. Momentum appeared to favor a five-year sunset rather than a permanent mandate.
The bill raises broader property rights and governance concerns. While it does not mandate disposition, it explicitly frames state assets through a housing-utilization lens, directing agencies to identify property “underutilized” or suitable for conversion. Critics noted that repeated inventories could later be used to justify below-market leases, disposals, or policy pressure to repurpose assets regardless of original use.
The committee leaned toward excluding state-leased properties from the inventory, focusing only on state-owned land and buildings, and backing away from language requiring agencies to determine whether property is unnecessary for their “statutory purpose.”
The bill remains in flux, but the trajectory points toward deeper legislative involvement in executive branch asset management.
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Health Care: Ownership Transparency and Corporate Practice Limits (H.583)
House Health Care continued testimony on H.583, one of the session’s most sweeping health care reform proposals.
The bill would void noncompete, nondisclosure, and nondisparagement clauses in health care employment contracts. The Green Mountain Care Board supported the change, arguing noncompetes restrict competition and physician autonomy in Vermont’s highly consolidated health care market.
More consequential are new ownership and control reporting requirements. Health care entities with as little as $1 million in annual revenue would be required to disclose ownership structures, affiliates, and material transactions to both the Green Mountain Care Board and the Attorney General. Biennial public reports would analyze consolidation trends across the sector.
Both GMCB and the Attorney General’s Office raised concerns about staffing and enforcement capacity, warning the reporting volume could be substantial. The AG also flagged a structural gap: while the bill allows penalties for prohibited transactions or conduct, it is unclear how the state would unwind an illegal acquisition or ownership structure once it occurs.
The bill also reasserts restrictions on the corporate practice of medicine, potentially limiting private equity involvement, management services organizations, and outsourced staffing models increasingly used by rural hospitals. Even supportive witnesses acknowledged the risk of unintended consequences and regulatory friction that could affect access and innovation.
No tax increases are embedded in the bill, but it significantly expands regulatory reach into private contracts and corporate structures.
Senate Finance: Teacher Pensions and Long-Term Budget Pressure
Senate Finance devoted the afternoon to a detailed review of teacher pensions and retiree health benefits, underscoring long-term cost pressures baked into the state budget.
For FY2027, combined pension and OPEB costs for teachers are projected at roughly $236 million, with nearly $250 million annually borne by the General Fund once prefunding payments are included. That represents about 10 percent of General Fund revenues, independent of classroom spending.
Recent reforms under Act 114 have improved funding ratios and slowed growth, but lawmakers acknowledged these obligations continue to constrain bonding capacity and crowd out other spending priorities. No immediate tax proposals emerged, but the testimony reinforced that structural retirement costs remain a primary driver of future fiscal stress.
Bottom Line
Wednesday’s committee action advanced bills that expand regulatory discretion, increase reporting and compliance obligations, and reinforce long-term spending commitments. While few measures raise taxes directly, each carries downstream implications for costs, property control, and economic flexibility — the kind of incremental expansion that compounds over time rather than appearing all at once.
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