Feb. 11, 2011

Legislature in Session Three Days This Week
It’s hard to believe the General Assembly has used one-third of the annual allotment of days to be in session, but they passed that milestone this week. New legislators were happy to finally vote on actual bills as this week was the first time those were before the Legislature. The supplemental budget took up much of the floor time and committees were meeting frequently getting other legislation ready for floor consideration.

Olens Follows Through on Foreclosure Promise
Newly-elected Attorney General Sam Olens said during his campaign that one of the first bills he would ask the General Assembly to consider would be one to extend the mortgage fraud statutes through the foreclosure process. We’ve had many members working with the Attorney General’s office over the years on mortgage fraud issues, and Georgia was one of the first states to adopt a comprehensive mortgage fraud statute. On behalf of the Attorney General, Rep. Rich Golick (R-Smyrna) has introduced HB 237 that would accomplish General Olens’ commitment. We’ve already given some feedback on the language, but would appreciate our members taking a look at the bill and letting us know if you have concerns.

Olens	Golick

Subcommittee Meets on Foreclosed/Vacant Property Registries
We’ve told you about the various local ordinances that are being adopted across the state requiring the registration of foreclosed properties. The ordinances are all unique to the jurisdiction adopting them and there are significant inconsistencies and costs associated with them. We’ve asked the General Assembly to weigh in and create a consistent structure for these ordinances that would preempt local ordinances that didn’t meet state requirements. While we expect the Legislature will approve maximum fees for these ordinances, local governments are already complaining about losing money. For example, DeKalb County has set a fee of $175 to register a foreclosed property. That may not sound like much to some people, but when one considers the State of Georgia is expected to have around 130,000 foreclosures this year, the statewide cost to lenders could be over $27 million. A discussion bill, HB 110, was introduced by Rep. Mike Jacobs (R-DeKalb), and he’s asked us to be part of a coalition of lenders, realtors, attorneys and local governments working on a compromise bill. We’ve met several times this week, but no consensus has been reached on several issues. We’ll update you as this issue matures.

Certificate of Insurance Update
 An Insurance Subcommittee met this week and discussed the Certificate of Insurance issue we’ve mentioned before. HB 66 by Rep. Howard Maxwell (R-Dallas) creates a process for the Insurance Commissioner to create or approve forms to be used to provide evidence of an insurance policy being in existence on a date certain. Several people spoke for and against the concept and the subcommittee took no action. However, since this committee is comprised of insurance professionals and agents who understand the pressures some are under to change or amend forms that they're uncomfortable doing, we can expect to see this legislation move forward. We haven't heard from many members that there are concerns with the language in the bill; but if we're missing something here, please be sure and let us know.

Other Bills of Interest/More Added to our Tracking List
We continue to update the online tracking page on our website with bills of interest to the banking industry. This week, we’ve added the following bills to the list: 

• Foreclosure. HB 204 by Rep. Billy Mitchell (D-Stone Mountain). Would provide for homeowner relief from unfair practices related to foreclosure and foreclosure rescue schemes. Would require certain written agreements, prohibit payment of fees until all agreed upon services are completed and provide a three-day cancellation period. Banks are exempt.
   

• Credit Reports. SB 42 by Sen. Donzella James (D-College Park). Would prohibit employers from requesting credit reports on employees or prospective employees with certain exceptions. Federally insured banks and credit unions are exempt.

Last week we told you about legislation introduced by Rep. Doug McKillip, HB 129, designed to prevent certain fees from being assessed on property that would be collected every time the property is sold. We understand the bill was introduced at the request of the State Bar of Georgia and mirrors legislation passed in other states. The bill was the subject of a hearing in a House Judiciary Subcommittee this week, but no action has been taken.

Mitchell	James	McKillip

Please take a look at these bills and let Elizabeth Chandler, 404.420.2027, know if you have any questions or concerns.

Cong. Westmoreland Successfully Offers FDIC Amendment to Oversight Committee
Georgia’s newest member of the U.S. House Financial Services Committee, Lynn Westmoreland (R-GA-3), successfully offered an amendment in committee this week calling for studies of several issues bankers in his district have told him are important. His district is unfortunately one of the hardest hit areas of the state by the residential real estate meltdown. The amendment was adopted by voice vote and will be part of the oversight we expect the new Congress to actively pursue this session. Here's the text of his amendment: The Committee will examine the process the FDIC uses to supervise and, if necessary, resolve community banks and the procedures followed by the FDIC and other bank supervisors in making this determination. Some observers have noted there are inconsistencies in the application of FDIC practices as a bank moves into prompt corrective action and towards a failure. Further, the Committee will study the costs and benefits of loss share agreements to the deposit insurance fund and the American taxpayer.  The Committee will also study how the FDIC’s resolution procedures, including but not limited to loss share agreements, affect access to credit for small business customers of a failed bank. The Committee will examine the effectiveness of FDIC guidance and its subsequent application in the FDIC’s supervision of community banks, particularly as it relates to appraisals of real estate assets.

GBA at the Capitol
Stay tuned and follow our updates on the GBA’s State Issues Page on our website as it’s updated daily. If you Tweet – follow us on Twitter – we’ll be Tweeting significant events as they occur. GBA will be well-represented again this year at the Capitol with Elizabeth Chandler, GBA’s Senior Vice President of Government Relations, coordinating our lobbying efforts. With questions about the session, bills of interest or anything related to the process, just give her a call at 404.420.2027.