January 13, 2017

If It's the Second Monday in January, It's Opening Day for the General Assembly

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 (R-Brunswick) introduced 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 (R-Dacula) on 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. Our thanks 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 and SunTrust's David Miraldi, 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 last year.

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
Kim Alexander
Johnnie Caldwell
Christian Coomer
John Deffenbaugh
Robert Dickey
Demetrius Douglas
Emory Dunahoo
Geoff Duncan
Darrel Ealum
Earl Ehrhart
Gloria Frazier
Buddy Harden
Penny Houston
David Knight
Pedro Marin
Billy Mitchell
Butch Parrish
Trey Rhodes
Jason Ridley
Brian Strickland
Sam Teasley
Chuck Williams
Bruce Williamson
C. Williams

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
David Shafer, Ex-Officio
Ed Harbison
Burt Jones
Emanuel Jones
Butch Miller
Michael ‘Doc' Rhett
Jesse Stone
Bruce Thompson
M. Williams

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. HB 27 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. HB 37 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. HB 49 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.

Legislative Schedule

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 40-day session.

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.