March 25, 2016  

Sine Die for 2016 General Assembly

In a marathon session Thursday that actually crept into the wee hours of Friday, the Georgia General Assembly completed its 40-day session. It’s been a busy session for lawmakers, and Governor Nathan Deal has until May 3 to decide whether to sign, veto or let legislation passed go into law without his signature.

GBA’s Priority Bills Passed

Each session, GBA focuses our attention on a narrow list of bills that are necessary to help our members remain competitive while serving the needs of their communities. This year was no different. We focused on two main bills and appointed task forces to dig into the details and help develop the legislation.
The advocacy team that helped support the Banking Department's housekeeping bill celebrates its passage. From left, Steve Bridges, Elizabeth Chandler and Joe Brannen, GBA; Kevin Hagler and Bo Fears, Georgia Department of Banking and Finance.
Banking Department Housekeeping Bill. You may recall from our Legislative Update last week that the Department’s annual housekeeping bill, HB 811, was amended on the Senate floor with an unrelated title pawn issue, passed and was sent back to the House for further consideration. At GBA’s request, Rep. Bruce Williamson (R-Monroe) successfully convinced the House to remove the amendment, and Sen. John Kennedy (R-Macon) got the bill passed in the Senate clearing the bill for the Governor’s signature. The bill was the product of a two-year effort of the GBA Code Review Task Force chaired by Brad Miller, General Counsel for United Community Bank, Blairsville, with Bo Fears, the department’s Deputy Commissioner for Legal Affairs, serving as scrivener. Among the issues covered by the bill: 1) recognizes the preemption of the DBF’s role in approving branches of out-of-state institutions, 2) removes prohibitions for state-chartered banks to charge a fee to cash “on us” checks; 3) removes the reserve requirements referenced in Federal Reserve Regulation D so that the provisions will only be applicable to institutions whose deposits are not federally insured; 4) removes the authority of the DBF to present a case directly to a grand jury; 5) reduces the violation of an institution’s charter or bylaws to a misdemeanor from a felony; 6) authorizes banks to participate in cross-guaranty state-level collateral pools; 7) clarifies that interactive ATMs are not branches; and 8) establishes a regulatory structure for virtual currencies. Other sections of the bill apply only to credit unions or non-bank entities registered with or supervised by the DBF. The Task Force is a three-year undertaking; and, last year the Task Force successfully helped pass a strong parity law to ensure a level playing field for state- and nationally-chartered banks. The members will be meeting later this year to finalize recommendations for the 2017 session.
Multibank Pledging Pool. GBA’s other priority bill, SB 283, creates a multibank public deposit collateralization pool that will be a third collateralization option for banks doing business with public depositors. This contingent liability pool will be comprised of all the banks having assets over $50 billion doing business in Georgia, and optional for other banks qualified as state depositories and approved by the State Depository Board. In return for the cross-guarantee, banks may be eligible for a lowered collateralization percentage from the current 110 percent of the public deposit. At the request of the State Treasurer, Steve McCoy, GBA put together a task force comprised of bankers affected by the new Liquidity Coverage Ratio (LCR), a component of Basel III, and developed the legislation. In addition to McCoy, our thanks go to Kevin Hagler and Bo Fears at the Banking Department for their help in crafting the bill and their willingness to be part of the regulatory process going forward. The state treasurer will be recommending the implementing regulations for adoption by the State Depository Board. In addition, we worked with depositor stakeholders and especially want to recognize the Association County Commissioners of Georgia, Georgia Municipal Association, Georgia School Boards Association and the Board of Regents for their ongoing interest in and support of the effort. GBA will be presenting a session about the new pool concept at the Georgia Government Finance Officers Association annual meeting later this year. Our thanks also go to Sen. John Kennedy (R-Macon), who introduced the bill, and to Rep. Bruce Williamson (R-Monroe), who handled the bill in the House. Rulemaking will take several months and we will give you updates through our regular E-Bulletin.

Other GBA-monitored Bills Saw Final Action this Session

If you’ve been following our Legislative Updates, you’ve noticed that we get involved with a range of issues that either have a direct or indirect effect on the banking industry. We’re pleased to serve as a go-to resource for legislators as they weigh options to address issues. Oftentimes good ideas create unintended consequences and we’re constantly working with legislators to avoid that. Many bills never get much further than being introduced. Others get committee hearings and begin to move through the process. The committee structure is designed to perfect legislation and many bills often stall when it becomes obvious the legislation cannot be effectively corrected or sufficient support doesn’t materialize for the author to move forward. GBA was involved with over 75 bills this session. Take a look at the State Issues page on our website to see them all. Following are bills that received final passage and are awaiting the Governor’s decision.
Garnishment. SB 255 by Sen. Jesse Stone (R-Waynesboro) addresses the reasons a federal judge ruled portions of Georgia’s garnishment statute unconstitutional. Our thanks to House Judiciary Committee chairman Rep. Wendell Willard (R-Sandy Springs) for appointing a study committee to develop the initial legislation. Serving on the committee at GBA’s request was Ellen Fleming, First Vice President & Senior Counsel SunTrust Banks, Inc. Also active on the committee representing creditors’ interests was Adam Cleveland from associate member law firm Thompson, O'Brien, Kemp & Nasuti, P.C., Norcross. GBA will be hosting a webinar April 14 where Cleveland will review the changes. Click here to register. Of special interest is the five-day period to consider whether funds are in an account and the 10-day response time (after days one through five). The bill responds to the Court’s unconstitutionality ruling and balances a number of significant procedural changes for banks with some added protections.
Banks Serving Firearms Dealers. SB 282 by Sen. Jesse Stone (R-Waynesboro), the Georgia Firearms Industry Nondiscrimination Act, was amended onto another firearms bill, HB 1060, and awaits the Governor’s signature. GBA opposed the concept throughout the session and successfully supported helpful amendments, As originally introduced, the bill essentially said that if a bank chose not to do business with someone who has a federal license to sell firearms, the seller could sue the bank. The bank would then have to prove that the bank’s decision was for a reason other than the seller was related to the firearms industry. GBA’s efforts helped to remove that provision. Thanks mostly to the Banking Department, parity language was added, which will cause the bill to not be applicable to state chartered banks if the OCC or federal courts rule it inapplicable to federally chartered banks. Although watered down, the bill gives the Attorney General the right to bring an action against a bank if he believes the bank is about to violate, is violating, or has violated the act. No other industry has such a carve-out as is being given the firearms industry, and we believe this sets a bad precedent.
Water Liens. SB 206 by Sen. William Ligon (R-Brunswick) gives certain individuals and entities, specifically including lenders, the right to file a written request with a public or private water supplier inquiring about the existence of unpaid bills attributable to the property. GBA was able to work with the author and others to improve the bill.
Rural Hospitals. HB 919 by Rep. Geoff Duncan (R-Cumming) was introduced to help save access to hospital care for many rural Georgians. The bill was amended onto SB 258 and authorizes individual and corporate tax credits up to $100 million.
Real Estate Broker Paperwork. HB 869 by Rep. Alan Powell (R-Hartwell) removes the requirement for mortgage brokers to retain indefinitely copies of certain paperwork related to real estate sales transactions.
Electronic Real Estate Filings. HB 1004 by Rep. Rick Jasperse (R-Jasper) provides for the addition of electronic images of maps, plats and plans to be filed with the Clerk of Superior Court and into the Georgia Superior Court Clerks’ Cooperative Authority registry.
Property Redemption. HB 51 by Rep. Tommy Benton (R-Jefferson) changes the provisions about the amount of taxes payable upon redemption of a property sold for taxes, as well as establishes timeframes for when the purchaser of a property is required to join a homeowners association and pay association dues.
Public Retirement Funds – Permissible Investments. SB 335 by Sen. Ellis Black (R-Valdosta) adds as eligible public retirement system investments comingled funds and collective investment funds managed by state-chartered banks and state-chartered trust companies.
Savings Accounts for the Disabled. HB 768 by Rep. Lee Hawkins (R-Gainesville) establishes a qualified ABLE program in Georgia so people can contribute to accounts to pay for qualified expenses such as education, housing and transportation, of eligible individuals with disabilities. The state program will be structured in compliance with federal rules so that contributions to the account may be eligible for a federal tax deduction.
Notice / Citation for Code Enforcement Violation. HB 1025 by Rep. Tom Taylor (R-Dunwoody) adds procedures for notification of accusations or citation for a county code enforcement violation related to real property.
Financial Technologies and Payment Processing Industry Incentives. SR 883 by Sen. Brandon Beach (R-Alpharetta) creates a joint committee among the Senate and House to study the financial technology and payment processing industries to determine if additional incentives would be helpful to these companies to expand their businesses in Georgia. GBA will monitor the work of the study committee as they complete their work later this year.
Purchasing Cards. HB 949 by Rep. Alan Powell (R-Hartwell) prohibits certain county officials from issuing purchasing cards without enacting regulations regarding their use.
Animal Liens. SB 356 by Sen. Michael Williams (R-Cumming) revises the lien statute applying to impounded animals and establishes a procedure for foreclosing on such liens. The bill awaits the Governor’s signature.
Unauthorized Practice of Law. HB 759 by Rep. Wendell Willard (R-Sandy Springs) clarifies that credit unions have parity with other financial institutions so that loan closings may be done without the use of an attorney in limited situations. The bill awaits the Governor’s signature.

Some High Profile Bills Failed

We often get in the middle of issues that seem to get lives of their own for reasons sometimes unrelated to the underlying bill. Here are three bills that suddenly saw action but for various reasons never made it through the process.
E-Discovery. HB 1017 by Rep. Barry Fleming (R-Harlem) would have substantially revised the electronic records discoverable in a court proceeding. GBA has been represented with committees at the State Bar of Georgia where this legislation was developed, primarily by our counsel at Bryan Cave, Bill Custer. SunTrust’s First Vice President and Senior Counsel for Legal Affairs, Joel Howle, presented a session at a recent Bank Counsel Conference outlining why any bank would be concerned. GBA joined a coalition of business interests to oppose the bill primarily because it failed to follow federal standards most states have adopted. After sitting dormant in the House Judiciary Committee, the bill was suddenly reported for consideration by the Rules Committee, but no action was taken.
Data Breach Notification. SB 276 by Sen. John Albers (R-Roswell) would have required certain businesses and government agencies to notify affected individuals within 72 hours of a data breach. GBA was asked to comment on an early draft of the bill by the Atlanta Business Chronicle. In that interview, we went on record opposing the bill as it was unnecessary. Through the committee process, banks and other businesses that are already required to have data breach protocols in place were accommodated and would have been deemed to have already complied with the new notification standard for other entities. However, the bill stalled in the process.
Self-Settled Spendthrift Trust. HB 456 by Rep. Tom Weldon (R-Ringgold) would have established a new type of trust in Georgia called a qualified self-settled spendthrift trust. The intent of the trust would be to protect trust assets against the claims of a settlor who is also a trust beneficiary. A revised version of this bill was substituted on the last night of last year’s session into HB 197. Nothing happened on the bill this session until the last day when we noticed the Senate pass a procedural motion that could have allowed the bill to pass quickly in the House. However, the House never considered the bill. We were peripherally involved in the legislation last year and successfully got some changes made. House Judiciary Chairman Wendell Willard (R-Sandy Springs) apparently remained opposed to the concept since it had not been vetted through the traditional committee process.

GBA’s Advocacy Team at the Capitol

Led by GBA’s Senior Vice President, Government Relations, Elizabeth Chandler, GBA was at the Capitol every day advocating on behalf of our members. Also at the Capitol were GBA’s government relations consultant Steve Bridges and GBA President and CEO Joe Brannen. With questions about GBA legislation, other issues of interest, or anything related to the legislative process, contact Elizabeth at 404.420.2027, Steve at 404.420.2037, or Joe at 404.420.2026.