A regular electronic publication of the Georgia Bankers Association

www.gabankers.com

About the GBA
Board of Directors
Bank/Thrift CEOs
Georgia Banks Online
Associate Members
Strategic Partners & Products
Bank Counsel Section
Volunteer Committees
Electronic Publications

Welcome Elizabeth Todd
GBA is pleased to announce that Elizabeth Todd has joined our staff as Director of Professional Development.  Elizabeth has been with DeKalb Technical College for almost 20 years where she was most recently Director of Institutional Planning, Evaluation and Effectiveness.  Elizabeth brings a depth of experience in adult education and organizational skills.  She has facilitated small and large groups and coordinated significant statewide educational programs.  Elizabeth graduated from West Georgia College and State University and received her masters from Emory University.

Georgia Fair Lending Act Preempted
It came as no surprise when the Office of the Comptroller of the Currency (OCC) issued an order late last week preempting most of the provisions of the Georgia Fair Lending Act.  If there was any surprise, it was how broad the ruling was, which in effect, eliminated the Act almost entirely for national banks and their operating subsidiaries.  The National Credit Union Administration and the Office of Thrift Supervision had earlier preempted certain provisions of the Act as it applies to federal credit unions and thrift institutions.  A whirlwind of activity ensued following the OCC’s announcement.  

The GBA has spent considerable time researching the preemption issue and felt the OCC was well within their statutory authority. The significance of the ruling was broader than Georgia banks with national charters. The OCC’s order applied to any national bank in the country that made mortgage loans in Georgia.  Because of the parity language contained in the 2003 revisions to the Act, state-chartered banks were set to receive the exact same preemption given nationally-chartered banks. Initial press reports quoted several state officials expressing their belief the OCC had exceeded its authority and were considering legal action against the Comptroller.  GBA quickly communicated with the state’s elected leadership, other policy makers and their key staffs.  GBA President, Joe Brannen said, “I think it was important for us to be proactive in helping people understand what the parity provision actually meant and which institutions were preempted.  This is a complicated issue primarily because a few of the well-known subprime lenders are owned by bank holding companies; but because they are not bank subsidiaries, they will not be covered by the preemption.  We felt the policy makers needed to understand who would still be covered by the Act:  finance companies, mortgage brokers and mortgage bankers.  Banks are responsible lenders and should never have been covered by the Georgia Fair Lending Act.  The Act now applies to the right individuals and institutions, and we are pleased with this outcome,” Joe concluded.

2003 State Legislative Issues
Governor Sonny Perdue
Lt. Gov. Mark Taylor
Georgia House of Representatives
Georgia State Senate
Federal Legislative Issues
U.S. Congress
Legislative Updates
Legal Issues

Sub S Bill Introduced
House Ways and Means Committee Chairman Bill Thomas (R-CA) introduced H.R. 2896, the American Jobs Creation Act.  The bill contains Subchapter S reform provisions that would increase the number of S corporation eligible shareholders from 75 to 150; treat up to three generations of family members as a single shareholder; exclude interest and dividend income from passive income limitations; provide that stock national bank directors are required to hold would not be treated as a second class of stock; and allow existing IRAs that own bank stock to be eligible shareholders.  H.R. 2896 also would provide a 32 percent top tax rate for corporations with less than $10 million of taxable income; an extension of bonus depreciation; capital purchases expensing; a research tax credit; corporate alternative minimum tax relief; and a five-year net operating loss carryback period.  GBA supports the bill.

FAX Rules Implemented
In order for GBA to continue faxing your bank information about GBA activities, we are now required to have your specific permission because of  the new rules enacted by the Federal Communications Commission (FCC) regarding unsolicited faxes.  In a little-noticed section of the national no-call registry legislation, language was included that FCC is interpreting broadly.  All businesses and organizations are affected and are prohibited from sending unsolicited commercial faxes.  GBA has joined a coalition of business and non-profit interests to try and overturn the ruling, but since it is effective August 25, we doubt any action will be taken prior to that date.  Chief Executive Officers are asked to please return the  permission form that was included in the print version of the Bulletin.

Policy Issues Discussed
GBA Chairman Ed Milligan, Chairman and CEO of Main Street Banks, Inc.; GBA past Chairman Wes Smith, President of Northwest Georgia Bank, Ringgold; and GBA President Joe Brannen recently participated in a national meeting of their counterparts to plan federal legislative strategy for the remainder of 2003 and into 2004.  “We were delighted to be with House Financial Services Committee Chairman Mike Oxley who gave us an in-depth briefing on the Committee’s plans ahead,” Ed reports.  “He gave us some hope that we would get permanent extension of the Fair Credit Reporting Act prior to year-end and possibly see some movement in the Senate on Deposit Insurance Reform.  Apparently the Realtors are continuing to be successful in blocking real estate brokerage authority for banks, and Chairman Oxley cautioned us that we all needed to step up our calls to Congress in support of our position,” Ed concluded.

External Fraud Leads Operating Losses
Most bank operating losses come from external fraud with an average loss of $34,400 per case, according to results from the American Bankers Association Operating Risk Committee's first-ever peer-reporting program. Results are from the first quarter of this year and for loss events of $10,000 or higher.  According to the report, operating losses made up less than one percent (0.15 percent) of bank gross domestic income. In total, participating banks reported 224 individual loss cases with $7.7 million in operating losses overall. Three types of losses were reported in the study:  external fraud, which includes check fraud, card fraud and robbery, made up 58 percent of the total losses; execution delivery and process management, consisting of data entry errors, missed deadlines and vendor disputes, made up 41 percent; and internal fraud, or embezzlement, ranked last with one percent of total losses.  The top three loss categories by business line were retail banking (78 percent), commercial banking (14 percent) and payment and settlement (three percent).  Attend GBA’s Fall Group Meetings to hear about an exciting new service GBA will be announcing to reduce fraud.

Calendar of Events
Schools
Conferences
Seminars
Events
American Institute of Banking
Leadership GBA
Personal Economics Program (PEP)
Internet Training

Leadership GBA Sponsors Camp Challenge
This past June, Leadership GBA, in partnership with the Georgia 4-H and the North Carolina Bankers Association, was again able to make the wish of attending summer camp come true for four Georgia middle schoolers.  On June 15-20, four high-achieving, low-resource, middle school students from Georgia were brought together with students from North Carolina and Florida at Camp Challenge, located in the Sura Mountains of NC.   The purpose of this camp was to provide each child the necessary skills to become a valuable asset in the workplace and community.  Each camper attended financial literacy, creative writing and public speaking classes and also participated in many team-building activities.  Many thanks to Wes Dodd, Executive Vice President of Finance at Community Bankshares, Inc. in Cornelia; Meredith Malcom, Vice President at National Bank of Walton County in Monroe; Mike Sale, Vice President at Athens First Bank and Trust Company in Colbert; and Brian Savage, Vice President at United Community Bank in Clayton, for their help with the selection and sponsorship of the campers.  A special thank you to the Georgia 4-H Camping Program and Naomi Thompson for their help in providing transportation to and from Camp Challenge.

2003 Fall AIB Semester Starts Soon
American Institute of Banking classes start the week of September 8th.  Classroom courses are being offered in Atlanta and throughout the state with courses ranging from one week to twelve weeks in length depending on the topic. GBA welcomes back many of our most seasoned instructors to teach these classes along with a few new instructors offering classes in brand new areas. Check out the enclosed booklet, The GBA Advantage, for the course listings in your area.  If you need more copies, please contact Edie Canales at (404) 420-2034. If you are interested in taking AIB classes over the Internet, the new schedule is also included in The GBA Advantage.  Internet classes are offered monthly and can help you complete your diploma or certificate if a classroom course is not available.

Group Meetings Begin Next Month
Continuing with tradition, the GBA annual Group Meetings will be held in each of the ten GBA Groups in September. This series of meetings will begin with Group 9 bankers gathering on Wednesday, September 3 in Gainesville at the Chattahoochee Country Club.  Group 10 bankers will meet at the Athens Country Club on Thursday, September 4 and Group 5 bankers will get together for lunch on September 5 at Villa Christina in Atlanta.  The Group Chair will lead each of the meetings and each will include an interactive Chairman’s Forum with GBA Chairman Ed Milligan, Chairman and CEO of Main Street Banks, Inc., Atlanta, hosting a “talk show,” interviewing staff and other guests.  GBA officers and staff hope to see you there. Please call Susie McGehee at (404) 420-2010 with questions.

Welcome New Participant
The Board of Directors of the GBA Insurance Trust, Inc. welcomes to the Trust Midtown Bank & Trust Company, I.O., Atlanta, Alex Suarez, CEO. The bank joins more than 275 community banks and associate members in this unmatched member benefit. Please call GBA’s Susan Kelley at (404) 420-2017 for more information.

GBA Retirement Welcomes New Member
GBA Retirement Services, Inc. is pleased to welcome Homestead Bank, Suwanee, Dale Johnson, President, to the plan. The GBA Master Pension and Profit Sharing Trusts programs provide flexibility to meet the needs of any bank or associate member who is looking to add or change their qualified retirement plan. The Master Trust provides high quality, affordable pension, profit sharing, and Section 401(k) programs for banks and associate members of all sizes.  Please contact Mandy Richards at (404) 420-2025 for information on how GBA can help with your retirement plan design.

Thumbprint Signature Program
Check fraud costs banks and their customers millions of dollars each year.  In a statewide effort to combat crime and protect our members, Georgia Bankers Association is in its 6^th year of endorsing the Thumbprint Signature Program.

This program provides a simple effective inexpensive method for preventing and deterring check fraud.   Help us send a clear message to criminals that check fraud will no longer be tolerated!

How Does It Work?   When non-account holders ask to cash a check, in addition to requesting the standard forms of identification, participating banks also ask them to place an impression of their thumbprint on the face of the check.  A small “inkless” touch pad facilitates the process.  Although the touch pad looks and operates just like a traditional inkpad, it leaves no stain or residue on users or clothing.  The procedure is quick, simple and clean.  Banks do not maintain a data bank of Thumbprint Signatures.  These signatures are used by law enforcement officials only in cases where fraud is suspected.

The program works as a natural deterrent.  Criminals seeking to commit check fraud are unlikely to put their thumbprints on bogus checks.  Most likely they will try their schemes elsewhere, and those who are foolish enough to cooperate leave a positive I.D. that can be turned over to law enforcement.

Success Stories….   Since the inception of the program, a test group of participating banks has experienced an average 60% reduction in fraudulent checks passed by non-customers.  Thumbprint Signature has received widespread support from local law enforcement agencies.  When a bank reports an incidence of check fraud, often the first question asked is “Do you have a fingerprint?” And although the program is most effectively used as a deterrent, it has actually been used to help apprehend and identify criminals.

How Do We Get Started?   There is no start-up fee other than the cost of the actual Thumbprint pads and products themselves.  You’ll want to be sure to order decals to post at all entrances to let people know you are participating in the program and warn potential criminals that their crimes will not go undetected.  Teller window displays and statement stuffers are also available.  Just complete the order form on the reverse side and fax to (404) 522-9848 or call GBA’s Kenyetta Parks at (404) 420-2035 or Renee Valdez at (404) 420-2036.

Atlanta, Georgia Commerce Bank
Congratulations to Mark Tipton, CEO, and the officers, directors and staff on the bank’s recent opening.  The bank is also the latest member to link to GBA’s website. 

Join Our Email Distribution List
A bonus of getting the e-Bulletin and e-Legislative Update is the number of links that are included. This is a great way to keep your key employees informed of significant industry information, trends and events. We do not disclose email addresses and only use them for internal communication purposes. Bankers from any member bank can be added to the email distribution list by sending an email containing the name and email address of each individual to GBA’s Lydia Thomas. 

For more information, send an e-mail to the Webmaster.