If It’s the Second Monday in January, It’s Opening Day for the General
Lots of smiling faces, handshakes and hugs were the order of the day Monday
when members of the General Assembly flocked to the State Capitol to resume
where they left last March, or for those newly elected, to start learning
the ropes of the awesome responsibilities inherent with being elected to
serve. A decidedly improving economy, a relief that the contentious election
season was in the rearview mirror, and the knowledge that our state’s three
top leaders in Gov. Nathan Deal, Lt. Gov. Casey Cagle and
Speaker David Ralston were firmly in place and ready to work together
led to a general atmosphere of optimism about the 2017 session. The General
Assembly will quickly get down to business tackling a host of issues ranging
from education to transportation to health care and everything in between.
Please read these weekly newsletters we’ll be publishing throughout the
session. It’s your best way to stay informed and we hope you’ll engage in
helping us advocate for the industry.
Big Agenda for Banking
We’re never at a loss for something productive to do every day at the
Capitol. We’ve got two top priority bills to proactively get passed, and we
expect some contentious conversations along the way. We’re already working
with the authors of several bills to help improve the language and we expect
we’ll have to oppose some legislation as it works its way through the
process. Here’s a recap of what we know so far.
Department of Banking and Finance Annual Housekeeping Bill. This
bill will include important provisions that the GBA Code Review Task Force
recommended as the culmination of their three-year project to update
Georgia’s banking laws. Of note, the bill includes a streamlined calculation
for legal lending limits, the ability of the Department to directly examine
third-party service providers, gives state charted institutions the ability
to conduct business on Sundays to give them parity with national banks, adds
the option of providing minors electronic access to accounts, streamlines
the Department’s subpoena process, authorizes pay-by-phone fees, expands the
circumstances for board member removal by the financial institution and
modernizes the process for the issuance of subordinated debt. We expect this
bill to be introduced early in the Session by Rep. Bruce
Williamson (R-Monroe). Our thanks especially to the task force
chair, Brad Miller, General Counsel at United Community
Banks, Inc., Blairsville, and DBF’s Bo Fears, Deputy
Commissioner for Legal Affairs, who served as scrivener, for their hard work
to ensure the Georgia banking code is among the best in the nation.
Modernizing Georgia Business Judgment Rule.
Enhancing the liability
protection for board members in their decision-making process will be a
priority for both GBA and the general business community. In the vast
majority of states, the business judgment rule protects both the
decision-making process and the actual decisions of directors made in good
faith from any second-guessing by courts and juries. The only exceptions are
where the directors are guilty of gross negligence, fraud or bad faith. In
FDIC v. Loudermilk
, however, the Georgia Supreme Court held that
directors of Georgia banks and corporations could be liable for ordinary
negligence committed in the decision-making process. By allowing ordinary
negligence claims to be brought against directors of Georgia banks and
corporations, the court has severely undercut the business judgment rule.
The question of whether a bank or corporation has engaged in an appropriate
decision-making process is now subject to second-guessing by courts and
juries – precisely the result that the business judgment rule was designed
to eliminate. There are very strong policy reasons for keeping the
decision-making process of directors beyond the review of the courts and
juries except in cases of gross negligence, fraud or bad faith. We expect
legislation to be introduced soon addressing this important issue.
Fee collection requirement for wire transfers. Rep. Jeff Jones
HB 66, legislation to require a new state fee to be collected
when certain wire transfers are initiated. An early draft of the legislation
included banks among the entities that would have been subject to the
collection requirement, and our thanks to Rep. Jones for exempting banks as
long as the wires are initiated in the normal course of doing business with,
or on behalf of, customers.
Rewrite of Georgia’s power of attorney statute.
You might remember that
we worked last session with Rep. Chuck Efstration
legislation that would have substantially rewritten Georgia’s power of
attorney code section. The issue turned out to be pretty complicated as
there is model language used in many other states that needed to be
considered for the Georgia code, so the issue was postponed to this session.
We’ve stayed in touch with Rep. Efstration and others interested in the
revision and we appreciate his leadership.
Possible creation of lottery or prize-linked savings accounts.
to Senate President Pro Tempore David Shafer
(R-Duluth) for including
us in meetings to discuss his idea from last session designed to increase
the personal savings rate through state legislative incentives. The concept
is to allow savers to open an account with the opportunity to enter a
lottery of sorts from which the prize winnings would be added to the savings
account at a financial institution. The concept has been adopted by other
states and we expect the bill to be introduced soon.
Revisions to Georgia’s trust code.
Those of you who exercise your bank’s
trust powers will want to follow some changes we expect to Georgia’s trust
code. We have two bankers, Synovus’ Blake Melton
, serving on a State Bar of Georgia special Trust Code
Revision Committee, and among the issues up for consideration relate to
decanting, judicial and nonjudicial modification, nonjudicial settlement and
virtual representation. Melton is also secretary to the Bar’s Fiduciary Law
Section. The committee is still working a draft bill.
Disposal of abandoned mobile homes.
Our thanks to Rep. John Corbett
(R-Lake Park) for including us in meetings he’s been holding to look at ways
to more efficiently allow local governments dispose of abandoned mobile
homes. Most of our comments so far have been around clarifying the notice
language to lienholders. We expect the bill to be introduced soon.
Reintroduction of the Georgia Firearms Protection Act.
We expect to again
face legislation GBA and others opposed last session that would force banks
to do business with entities that hold a federal firearms sales license if
the only reason the bank chose not to do business with the prospective
customer was because of that license. No other entities have such service
mandates, and we opposed the legislation because of the precedent it was
setting. The bill was introduced as a result of the Obama Administration’s
Operation Choke Point that was intended to shut out certain industry groups
from access to traditional sources of commerce. That operation has long been
shut down, and the incoming Administration has given signals if they find
any lingering signs of its existence, they’ll immediately put a stop to it.
So, the need for the legislation is no more apparent this year than it was
Committees Up to the Challenge; House Committee Set
No legislator can be expected to be an expert on every issue, so the
committee structure is designed to educate members and perfect legislation
before it’s reported to the full House or Senate for votes. We’re looking
forward to again working with returning House Banks and Banking Chairman
Greg Morris (R-Vidalia). With opportunities opening up in other
committees, we’ve got some new members on the committee and in new roles.
The new Vice Chair will be Lee Hawkins (R-Gainesville) and the
Secretary will be Randy Nix (R-LaGrange). We’re especially pleased to
see former GBA chairman and First American Bank & Trust’s Chuck Williams
(R-Watkinsville) named to the committee. Williams has been a member of the
House since 2011. Here’s a list of the Committee.
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Greg Morris, Chairman
Lee Hawkins, Vice Chairman
Randy Nix, Secretary
Leadership Changes in Senate Banking and Financial Institutions Committee
Our congratulations to former Banking and Financial Institutions chairman
Sen. Burt Jones (R-Jackson), who was named chairman of the powerful
Senate Insurance Committee. Sen. Jones was an excellent chairman of the
banking committee and while we’ll miss his leadership, he’ll remain as a
member on the committee. We’re equally excited to be working with Sen.
William Ligon (R-Brunswick), who was named as the new committee chair
this week. Sen. Ligon is new to the committee, but not new to our issues.
We’ve worked with him in the past and he’s a quick study. The bankers who
heard him speak at our Legislative and Economic Forum Wednesday were
introduced to a solid, solutions-oriented, pro-business legislator. The new
Vice Chairman is Sen. John Kennedy (R-Macon). Sen. Kennedy was
already on the committee, has handled the Department’s housekeeping bill in
the past and last session got the new Multibank Pledging Pool legislation
passed. He takes the Vice Chairman role formerly held by Sen. Jesse Stone
(R-Waynesboro), who will have his hands full chairing the new Senate
Judiciary Committee, which resulted from the merger of three committees
dealing with both civil and non-civil matters. Sen. Stone remains on the
committee. Also new to the committee is the Secretary, Michael Williams
(R-Cumming). Sen. Williams is a pro-business, conservative legislator who
comes to the committee as a successful small business man and entrepreneur.
Here’s a list of the full committee.
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William Ligon, Chairman
John Kennedy, Vice Chairman
Michael Williams, Secretary
Michael ‘Doc’ Rhett
New Bills Added This Week to our Tracking List
We’ll be adding bills throughout the session to GBA’s State Issues Page.
This week, we’ve added the following:
Foreclosure – Cure Before a Sale
by Rep. Billy Mitchell
(D-Stone Mountain) creates a
process allowing a defaulting borrower to cure the default prior to a
sale of the property. GBA monitoring.
Appraisers, Real Estate Agents, Salespersons – Disciplinary Action
by Rep. Alan Powell
gives a 10-day period for any
of the affected licensees to notify the licensing board of convictions
of certain offences and replaces the requirement for automatic
revocation of a license to a permissive process. GBA monitoring.
Livestock Dealers and Auctions – Surety Requirement
by Rep. Clay Pirkle
(R-Ashburn) adds letters of
credit, certificates of deposit and other instruments issued by lending
institutions to the surety bond options for livestock dealers and
licensed auction houses to use as bond to cover losses resulting from
the failure to pay the purchase price for animals being sold.
The General Assembly is in recess Friday and out on Monday in recognition of
the Martin Luther King, Jr. Day observance. The rest of the week will be
devoted to budget hearings. They’ll return for Monday-Thursday sessions the
weeks of Jan. 23 and Jan. 30. That will take them through Day 12 of the
GBA’s Advocacy Team at the Capitol
Led by GBA’s Senior Vice President, Government Relations, Elizabeth
, GBA was at the Capitol every day advocating on behalf of our
members. Also at the Capitol were GBA’s government relations consultant
and GBA President and CEO Joe Brannen
questions about GBA legislation, other issues of interest, or anything
related to the legislative process, contact
at 404.420.2037, or