About the GBA
I Professional Development I
Government Relations I
Services
February 25, 2005
GBA has been involved as a “friend of the court” on a somewhat technical case, Wachovia Bank of Georgia v. Issam Namik, et. al., involving the limited duty a financial institution has with regard to providing services within traditional trust agreements. The Court of Appeals had previously overturned a lower court’s ruling that had been detrimental to the industry’s position; however, the plaintiffs appealed successfully for the Supreme Court to review the case. GBA filed a second amicus brief in support of the bank’s position and urged the Court to affirm the order of the Georgia Court of Appeals. The original ruling found the bank had a duty to perform sophisticated estate planning service to the trust client even though the trust agreement did not provide for the service. The good news is the Supreme Court ruled narrowly based on evidence unique to this case and chose not to address some of the more complex issues.
Dugan to be Named Comptroller
President Bush has announced his intention to nominate Washington, D.C., lawyer
John Dugan
to be
Comptroller of the Currency.
Dugan is well-known in the banking community and most observers of the
Washington scene believe he is an excellent choice. Dugan is currently a
partner in the law firm of Covington & Burling, where he specializes in
banking and financial institution regulation.
American Bankers Association (ABA) members
may know him as he is also the outside counsel to the
ABA Securities Association, an ABA
affiliate. Dugan served as Treasury assistant secretary for domestic finance
during the administration of President George H.W. Bush. Before that, he
was Republican general counsel to the
Senate Banking Committee. Dugan’s
nomination is subject to Senate confirmation and we hope the confirmation
hearings will be held soon.FDIC, OCC Announce CRA Changes
The FDIC board has voted to adopt a revised proposal to amend the Community Reinvestment Act (CRA) regulations jointly with the OCC. According to the FDIC staff, the Federal Reserve Board is considering joining with the other two agencies so that the proposal will be uniform among the three agencies. The Proposal would make the following changes:
| • | Raise the small bank threshold to $1 billion, without regard to holding company affiliation |
| • | Replace the large bank lending, investment and service tests for banks between $250 million and $1 billion with two separately rated tests of equal weight: the current streamlined small bank lending test and a new flexible community development test |
| • | Expand the definition of community development to include activities that benefit “underserved” rural areas, soliciting comment on how the concept of underserved should be defined |
| • |
Finally, the proposal
would incorporate in the regulations which illegal credit practices
would affect a bank’s CRA performance—essentially reflecting the
position taken in the interagency Q&A released earlier |
Sub S Conversion Complications
Legislative changes made in the American Jobs Creation Act of 2004 were intended to expand the opportunities for banks to become Sub S corporations. The American Bankers Association Sub S Tax Counsel has alerted us to two practical problems that have arisen, however, regarding the change in law covering bank stock held in an IRA. This information is time sensitive since the filing date to become Sub S for this year is March 15, 2005. The two issues both deal with IRAs and whether the holding company stock is held in an IRA and, separately, how stock held in an IRA could be subject to double taxation. Banks which were considering converting to Sub S status this year should pay close attention to both issues. Call GBA’s Joe Brannen at (404) 420-2026 if you would like additional information.
FDIC/OCC on Overdraft Programs
The FDIC and Comptroller of the Currency have issued their final best practices guidelines on bank overdraft protection programs. The Office of Thrift Supervision had previously issued its guidelines that differ somewhat from the FDIC and OCC recommendations. FDIC and OCC have determined overdraft protection programs are extensions of credit but are not subject to the Truth in Lending Act disclosure requirements in most situations. Further, the OTS guidelines specifically mentioned the order in which checks are cleared cannot be manipulated to increase overdrafts. The FDIC and OCC did not mention that issue as it is covered by each state’s version of the Uniform Commercial Code. One final change from the original proposal gives banks 60 days to charge off an uncollected overdraft instead of 30 days. We encourage our members to carefully review the new guidance if your bank offers an overdraft protection program.
GBA Files Amicus on Garnishment Case
In what has to be one of most outlandish court cases in recent times, Greyhound Lines, Inc. is facing an $11,060,439 default judgment based on $1,560.71 Greyhound purportedly owed to the defendant in the case. The judgment, which has been accruing post-judgment interest for over three years now, totals over $15 million. Because our members are faced with frequent garnishment filings, GBA has joined a number of other business organizations in filing a brief in support of Greyhound’s position. The case involves an interpretation of current Georgia law which apparently subjects defaulting garnishees, whether they are individuals or corporations, to unlimited liability that bears no relationship to the underlying debt, if any, that the garnishee may owe to the judgment debtor. The court is being asked to rule the current law unconstitutional on a number of grounds. Our brief suggests a statutory scheme that yields such punitive and unconscionable results does not pass constitutional muster. We also suggest the grossly excessive penalty is depriving Greyhound of its property without due process of law; and further, the size of the penalty violates the excessive fines provision of the Georgia Constitution.
ABA Section 404 Manual
The American Bankers Association is helping community banks registered with the Securities and Exchange Commission – especially those that are non-accelerated filers – to negotiate the intricacies of the Sarbanes-Oxley Act’s Section 404 requirements. The association is offering “Management Reporting on Internal Controls Over Financial Reporting” – an 89-page reference manual that is free to member institutions. ABA and Crowe Chizek and Co. LLC co-authored the reference manual. Section 404 requires a company’s management to assess annually the design and operating effectiveness of its internal controls over financial reporting. It also requires an outside accounting firm to do an annual audit and issue a report on the effectiveness of those internal controls.
e-Legislative Update
Read today's e-Legislative Update. Today's edition covers action on legislation this week dealing with:
-
Banking Department's Housekeeping Bill
-
Civil Justice Reform
-
Mortgage Fraud
-
Gift Card Disclosure
-
Intangible Recording Tax Proration
-
Trust Flexible Income Rules
-
Credit Insurance
We will be publishing these
e-Legislative Update throughout the General Assembly
session. As a subscriber to our e-Bulletin service, you are able to link directly to the
edition we've posted on our website. Click on the hyperlinks to the bill summaries managed on the
General Assembly's
website to ensure you are viewing the most up-to-date versions of the
legislation. Please give us any
feedback
on this member service.
Leadership GBA
NOTE$
GBAIT 2005 Information Workshop
The
Georgia Bankers Association Insurance Trust
2005 Information Workshop is scheduled for Tuesday, April 12, from 9
a.m. to 5 p.m. at the Crowne Plaza in Macon. The workshop will focus on issues
to help better administer your bank’s benefit programs. Topics to be discussed
include HIPAA Compliance,
Georgia and Federal Portability,
Regulating Section 125 Plans,
Administrative Functions,
Health Savings Accounts,
New COBRA Notice Rules, and Forms.
Instructors for this information packed seminar include representatives form the
Georgia Bankers Association Insurance Trust, Inc., Holmes/Shaw Agency,
Paragon Benefits, Inc. and
Troutman, Sanders, LLP. To reserve your room, please call the hotel
directly at (478) 746-1461 and be sure to mention that you are with the GBA
Insurance Trust to receive the discounted rate. The registration fee is $75 per
person and includes seminar materials, continental breakfast, lunch and
breaks. You may
register online or contact GBA’s
Susan Kelley at (404) 420-2017 or
Lee Belaus at (404) 420-2013 for more information.
Leadership GBA Group Meetings
Leadership GBA will hold is first
Group Meetings in each of the ten GBA groups during the month of
March. These meetings will begin on March 3 in Fitzgerald and will conclude on
March 23 in Gainesville and Statesboro. All meetings are free of charge and all
but Groups 5 and 8 will be “Dutch treat” luncheon meetings. “In the past, the
Leadership GBA Executive Committee has focused on educating the
membership about our name change,” said Rob Coile, Leadership GBA
President and Senior Vice President/CFO at
Futurus Bank, N.A., Alpharetta. “This year, our goal is to focus on
our Leadership GBA Representatives and how we can help them take advantage of
the great opportunities that Leadership GBA has to offer. We hope to have
good attendance at the meetings and our goal is to make this an annual event.” If you have any questions about the meetings or how to become a Leadership GBA
Representative, call GBA’s
Susie McGehee at (404) 420-2010 or
Fran Williams at (404) 420-2015.
New
Business Loan Program; Briefing in Columbus
FTRANS and GBA would
like to invite member banks to a briefing Friday, March 18th at
10a.m. outlining
Positive Cash Plus™ followed by a luncheon with
local area business owners. FTRANS has pioneered a new commercial loan program,
recently introduced at GBA’s Credit Conference, for small and medium size
businesses allowing banks to make revolving loans to small businesses in Georgia
based on the operating assets of the business. Please RSVP to GBA’s
Renee Valdez (404) 420-2036 with attendance information.
The Untapped Potential of Integrated Performance
Management
“Our People are our
greatest asset.” If we select the right people, manage their activities
towards the tasks most important to success in their jobs, and develop them so
that they can make a stronger contribution to the success of the Bank over time,
then our People have the potential to be our greatest asset.”
Traditionally, companies look at Selection, Management and Development
activities as separate processes. Today forward-thinking organizations view
these as three steps of an integrated process known as Performance Management.
It involves bringing in and keeping the right people for your culture, measuring
them against clearly communicated performance expectations, developing them for
success in their current roles, as well as preparing them for future roles.
Performance management is not simply a process that you “do”; it reflects a
philosophy towards hiring the best people, and bringing out the best in them to
support business objectives.
Over the past several years, web-based tools have been developed that enable
companies to address performance management in a comprehensive way.
TalentQuestä
was developed by
GBA’s Strategic Partner
Corporate Psychology Resources (for"http://www.gabankers.com/y The Computer Psychologist).
TalentQuest has been specifically customized for GBA Banks. Several GBA Banks
have adopted a comprehensive performance management approach through their use
of TalentQuest including
Flag Bank,
Citizens Trust Bank,
Darby Bank & Trust,
Heritage Bank,
Riverside Bank and
PlantersFIRST. What return on their investment are these banks
expecting? Besides more motivated, directed and satisfied employees, studies
show that organizations who were focused on performance management have roughly
60% higher return on equity (ROE) and a 40% higher return on assets (ROA).1
In fact, the companies with the best methodologies for performance management
outperformed their industry’s mean return to shareholders by 22 percent.2
This begins a series of articles on each of the key elements of performance
management – Selection, Management, and Development. To learn more about
TalentQuest for your bank, contact
Jon Naphin at Corporate Psychology
Resources (404) 266-9368 or GBA’s
Renee Valdez (404) 420-2036.
1.
Danielle McDonald & Abbie
Smith, “A Proven Connection: Performance Management and Business Results”,
Compensation and Benefits Review, Jan – Feb, 1995.
2 Ed Michaels, Helen Handfield-Jones, Beth Axelrod, The War for Talent, Harvard Business School Press, 2001.
Did you
know…..
GBA offers the following products?
2005 Holiday Decals
Holiday Decals
are made available through the GBA. These window decals not only provide a
professional appearance, but also contain the 10 holiday close dates recognized
by the Federal Reserve Bank, in accordance the FDIC rules.
2002, 2003 & 2004 Georgia Banking Laws and Commercial Code Book and Supplements
(CD-ROM included)
All changes of the
Uniform Commercial Code or the Rules of the Department of Banking and Finance
during the 2004 session are included.
2004 Salary Survey
The Salary Survey
includes salary and benefit data for over 100 Banking positions, with data being
reported by approximately 100 financial institutions.
Thumbprint Signature Program
The GBA-sponsored
Thumbprint Program has been found to significantly reduce check fraud.
Nationally this program is responsible for an 82% reduction in check fraud.
FinCrime.com
FinCrime.com is a database and clearing house that facilitates the immediate
sharing of information via email about fraudulent activity between financial
institutions and law enforcement. This is a free service available to GBA
members and Georgia law enforcement.
Georgia Financial Directory
The Bank Directory contains complete information on all the banks in the
state and is invaluable to banking professionals. Also are included are a
listing of Associate Member Companies and the GBA’s own Strategic Partners to
assist our members in locating companies who provide useful products for their
banks.
For more information or to order any of the products listed above, please
contact GBA’s
Kenyetta Parks at (404) 420-2035 or
Renee Valdez at (404) 420-2036.
For Sale
Modular bank building 24 feet x 50 feet. Unit contains two private offices, a
lobby area with guest seating and a CSR desk, a teller line with three stations,
a two-lane covered drive-up with deal drawer and a VAT, a kitchen area, a
bathroom, and a storage area. The unit is fully furnished and is equipped with
a complete alarm and security package with cameras and a VCR and includes a
night deposit vault and a cash vault. The asking price is $50,000. For more
information, please contact Joe Morck,
West Georgia National Bank, at (770) 830-2936.
GBA Job Bank
The Georgia Bankers Association offers free job posting resources
for our member banks. These listings can be viewed
online or
through our bi-weekly publication included in the GBA Bulletin.
Resume postings are also available. For more information please
contact GBA’s
Renee Valdez
(404) 420-2036 or
Kenyetta
Parks (404) 420-2035.
Newsmakers:
Atlanta -
Cherry, Bekaert & Holland
Michael F. Johnston has been named Firmwide Director of the firm’s Financial
Institutions group.
Augusta -
First Bank of Georgia
Scott Rollins has joined the bank as Vice President and Senior Credit Officer
and Shirley McKinney has been promoted to Assistant Vice President and Loan
Operations Manager.
Carrollton -
West Georgia National Bank
Fernando Baldizon has joined the bank as Assistant Banking Officer at the Villa
Rica office.
Dawsonville - Mountain State Bank
Spencer L. Strickland has been named Forsyth County President.
Dublin -
The Morris State Bank
Spencer Mullis has been appointed to the bank’s Board of Directors as well as to
President and Chief Financial Officer; Melton Tyson remains on the Board as
Chief Executive Officer. Susan Brandon has been promoted to Executive Vice
President.
Moultrie -
ABC Bancorp
Dennis J. Zember, Jr. has joined the bank as Executive Vice President and Chief
Financial Officer.
Ringgold -
Northwest Georgia Bank
Scott Smith has been named President and Chief Operating Officer to replace
Wendell Rolen who recently retired. Scott Smith and Chad Young have been
appointed to the bank’s Board of Directors and Scott Smith and Hugh Peterson,
III have been appointed to the Board of NW Services Corp. The bank also
announces the following promotions: Randy Rolen to Executive Vice President;
Jeff Kovach to Senior Vice President and Chief Financial Officer; Sam Jones to
Senior Vice President/Senior Loan Administrator; Mark Sullivan to Senior Vice
President/Senior Credit Officer; and Tom Mastin to Vice President of Retail
Services.
Savannah -
First Chatham Bank
Congratulations to Brian Foster, CEO, directors and staff on the recent
groundbreaking for their newest branch office on Wilmington Island.
Savannah - First National Bank
Robert W. Dailey has been named City President, Elizabeth Humphries, Customer
Relationship Manager, and Billie M. Dees, Mortgage Loan Officer.
Statesboro -
Sea Island Bank
The bank announces the following 2004 service award recipients: Miriam Deal, 40
years; Glenda Rogers, 30 years; Debbie Johnson, 25 years; and Hal Averitt, 20
years.