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December 3, 2004
 

“New” Congress to Face “Old” Issues
When the new Congress is sworn in next month, many issues of interest to bankers will still be around for debate.  With a slightly larger increase in the Republican majorities in the House and Senate, the banking committee leadership may be more successful in getting some of these issues moved forward than they have been able to in the last Congress.  Here’s how we handicap some of the issues.

Regulatory Burden Relief.  Ask any banker about the growing regulatory burden and you will get an earful.  The biggest concern we hear about is Bank Secrecy Act Compliance.  Our publicly traded banks tell us how difficult some of the Sarbanes-Oxley provisions continue to be to properly comply with.  We will need strong advocates among the regulators to help tell our story and we think Congress will listen, but probably act with caution.

Community Reinvestment Act.  Banks under $1 billion may get some relief.  While the regulators have not been united on how to approach a simplified exam, at least they are taking our concerns seriously and we could see action soon.

Real Estate Authority.  Thanks to the hard work of a lot of bankers and the ABA again this year, the Realtors were only able to get another one-year moratorium on the Federal Reserve and Treasury approving real estate powers for banks.  Many believe the issue needs to be resolved one way or the other, so look for this issue to come to a head during 2005.

Credit Unions.  Bankers must continue to take every opportunity to tell federal lawmakers about the need to level the competitive playing field with credit unions.  The message is being heard as the credit unions’ effort to expand their commercial lending authority while reducing capital requirements fizzled earlier this year.  The President said during the campaign that he opposed credit union taxation.  We continue to look for ways to give our same tax and regulatory structure to those credit unions that choose to act exactly like banks.  This is a longer term issue but must be addressed.

Bankruptcy Reform.  Another perennial issue that has the votes to pass but cannot seem to make it on the agenda.  The Senate rules work against bills like this where one member can block passage.  The leadership of both houses will have to make this a priority if this legislation has a chance to get through any time soon.

Government Sponsored Enterprises.  Fannie, Freddie and the Federal Home Loan Banks will each play a major role in how any legislation shakes out.  Both Fannie and Freddie have experienced some embarrassing accounting and governance issues and the Federal Home Loan Banks are trying to stay out of the cross fire.  This could become a highly charged partisan issue among the housing advocates, but there seems to be many in Congress interested in enacting some reform.

Predatory Lending.  Some are advocating for a national standard on predatory lending.  Finding a middle ground on crafting a bill will be as difficult in Washington as it was in Georgia.  Most Georgia bankers we talk with prefer that things stay the way they are with the Comptroller overseeing national bank lending practices while the Georgia Department of Banking and Finance oversees state-chartered banks.

We will be welcoming three new members to the Georgia House Congressional Delegation:  Lynn Westmoreland, Tom Price and John Barrow.  Cynthia McKinney also returns after a two year hiatus.  Also, we look forward to working with former House member Johnny Isakson as he moves to the Senate.  All have turned in their requests for committee appointments and the financial services committee was on several of their lists.

Legislative Reception Reminder
Plans are being finalized for GBA’s annual Legislative Reception.  This event is slated for Wednesday, January 12, 2005, from 6:00 p.m. – 7:30 p.m. at the Hyatt Regency, Atlanta. Invitations are being mailed to legislators and special guests this week and we anticipate a great crowd. It is important that a large number of bankers attend and show their support for the banking industry and the Association by registering a group of representatives from every bank.  In a previous mailing, we suggested you offer to take your legislator to dinner.  We understand that Governor Perdue will be delivering his State of the State address that evening at 8:00 to a joint session of the General Assembly.  There is no specific date set for that address, so it is difficult to plan around it.  Last year when the Governor’s address was on the same evening as our event, a number of dinners were delayed until after the address, and a larger number of legislators who commute each day to the Capitol attended our Reception. The 2005 session will be historic, and with the Georgia Bankers Association recently named as the Most Influential Business Organization at the Capitol, we need to build even further on that strength by showing our huge grassroots network of bankers from across Georgia.  Please register representatives from your bank now and make plans to attend one of the GBA’s most important events of the year.   If you plan to spend the night, remember that the cut-off date is December 31 for the special GBA rate of $149 per night at the Hyatt.  You may reserve a room by calling the Hyatt at (404) 577-1234.   Please call GBA’s Susie McGehee at (404) 420-2010 with questions about the reception or hotel reservations.

GBA BankPAC Update
Since our last report, Bill Bazemore, CEO, Monroe County Bank, Forsyth, has participated by contributing to both the GBA StatePAC and FedPAC.  Thanks for your support. If you have questions or need additional information, please contact Elizabeth Chandler at (404) 420-2027.

Consumer Survey on Fees
Continuing our series reporting the results of a recent survey by the American Bankers Association on consumers and their banking relationships, this week’s survey question is:

How much would you estimate you spend on fees for banking services each month such as fees for checking account maintenance, ATM use and so forth?  The answers:

Nothing: 51%
$3.00 or less:  13%
$3.00 to $6.00:  11%
$6.00 to $8.00:  6%
$8.00 to $10.00:  6%
More than $10.00:  8%
Other:  2%
Don’t know:  2%

Commenting on the survey results, GBA President Joe Brannen said, “It is interesting that more than half the respondents pay nothing for their banking services. While we often have to defend bank fees to legislators, consumer advocates and the media, bank customers are clearly getting a good value for these services.”

e-Bulletin:  FACT Act Regulation News
At GBA’s Credit Conference this week, the regulator panel mentioned the recent announcement from the six federal agencies primarily responsible for issuing Fair and Accurate Credit Transactions (FACT) Act regulations that institutions will not have to comply with provisions requiring rulemaking or guidance until that rulemaking or guidance is issued in final form.  The FACT Act provisions covered by this announcement are:  red flags, disposal of consumer report information, risk-based pricing, accuracy and integrity, consumer disputes of furnisher information, and reconciling addresses.  Provisions of the Act not requiring the publication of existing rules or guidance were effective December 1^st, and will require compliance. The panel members indicated they recognize the difficulty many banks will have with compliance, and that they will take into account these difficulties when considering FACT Act enforcement actions.  Click here to read the regulators' letter.

Advanced Compliance Symposium
GBA’s annual two-day Advanced Compliance Symposium is a ‘must’ for compliance officers in Georgia. It provides great information about new regulations, emphasizes areas of regulators’ greatest concerns, and encourages discussion about managing the compliance function. Some of the topics to be discussed include Bank Secrecy Act, USA Patriot Act, Reg D, RESPA, FACT Act HOEPA and HMDA/Reg C.  Also, new to the program this year will be a regulator panel discussion. This professional program is led by Steve Moore of Bank Compliance Services, LLP.  The Symposium will be held at the Holiday Inn Macon Conference Center on January 26-27, 2005.  Please call GBA’s Susie McGehee at (404) 420-2010 or Fran Williams at (404) 420-2015 to register.

Congratulations 2004 AIB Graduates
American Institute of Banking (AIB) has been recognized as the industry standard in banking education and training for over a century and GBA is proud of its commitment to Georgia bankers by offering AIB courses.  AIB diplomas and certificates are well recognized within banking and financial communities and to earn one sometimes requires years of dedication, commitment and perseverance.  It is with great pleasure that we announce the 2004 graduates of the American Institute of Banking.  Please copy and post the flyer listing this year’s recipients in your bank so all employees can join you in congratulating your fellow bankers for their accomplishments.

2005 Updates for GBA Master Trust
GBA Retirement Services and Alliance Benefit Group, the third party administrator for the GBA Master Trust, will start offering online enrollment for 401(k) participants beginning January 1, 2005.  This will eliminate the extra paperwork involved in enrolling your employees.  More information will be sent to current Trust members prior to year-end.  In addition, new rules regarding automatic distributions for terminated participants with balances between $1,000 and $5,000 will apply in March 2005.  Plan sponsors will no longer be able to “force out” a distribution with taxes withheld.  They will now be required to roll the distribution into an IRA.  More information will be sent to current Trust members in the near future.  The programs offered through the GBA Master Trust provide flexibility to meet the needs of any bank or associate member who may be looking at adding or changing their qualified retirement plan.  Please contact Mandy Richards at (404) 420-2025 for information on how GBA Retirement Services can help design a retirement plan for your bank.

2005 Holiday Decals Have Arrived
Those who are on our standing order list should have received their order within the last few weeks. The window decals provide a professional appearance and contain the 10 holiday closings recognized by the Federal Reserve Bank in accordance with FDIC rules.  If you are not currently on our standing order list and would like to receive a set, please call quickly; we have sold out over the last 5 years.  To order, please call GBA’s Renee Valdez at (404) 420-2036 or Kenyetta Parks at (404) 420-2035.

Check Fraud Continues to Grow
According to the Office of the Comptroller of the Currency, more than 1.2 million fraudulent checks are written every day – that’s more than 13 per second.  Check losses this year will exceed $20 billion.  One of the fraud prevention measures GBA has implemented in the free service, FinCrime.  This online service allows banks to alert others of fraudulent activity and gives law enforcement an investigation tool.  If your bank has not yet enrolled, contact GBA’s Renee Valdez at (404) 420-2036.

Check Fraud Season is Here…..It’s Not Too Late
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 8^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 and fax it to (404) 522-9848 or call GBA’s Kenyetta Parks at (404) 420-2035 or Renee Valdez at (404) 420-2036.

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.

Join Our Email Distribution List
A bonus of getting the e-Bulletin is the number of links that are included, which is also a great way to keep your key employees informed of significant industry information, trends and events. With the upcoming session of the 2005 Georgia General Assembly, the GBA will begin sending to those on our email list the electronic version of both the Legislative Update and the LegisFAX to keep you apprised of the bills that the GBA is tracking on the industry's behalf. To be added to our email list for the e-Bulletin and e-Legislative Update, please send GBA's Lydia Thomas an email containing the name, company, and email address of each individual to be added.  In order to receive these electronic publications, your bank's email controls must be set to accept them.  Please contact your system administrator for more information.

Newsmakers:

Atlanta - Riverside Bank
William R. Battle, III, has joined the bank’s Board of Directors.

Buford - Georgia Trust Bank, I.O.
Becky Munteanu has joined the bank as Executive Vice-President and Senior Lending Officer

Gainesville - Gainesville Bank & Trust
Ward McCamy has joined the bank as Assistant Vice President and Melissa Massey has been promoted to Banking Officer.

Richmond Hill - Bryan Bank & Trust
Matt Scott has joined the bank as Producing Sales Manager and Brad Brookshire as Management Associate.

Savannah - The Savannah Bank
Chris Brown has been promoted to Banking Officer.

www.gabankers.com

About the GBA  I  Professional Development  I  Government Relations  I  Services