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May 27, 2005

Two Banking Bills Receive House Action
The U.S. House of Representatives has passed two bills being closely followed by Georgia Bankers.  With only one dissenting vote, the House passed the Business Checking Freedom Act, H.R. 1224, legislation that would permit up to 24 transactions a month in sweep accounts and after two years, banks would be authorized to pay interest on corporate checking accounts.  The Act also allows banks to offer NOW accounts to businesses and allows the Federal Reserve to pay interest on sterile reserves.  The House also approved a provision that would prevent new commercially owned industrial loan companies from having this new authority going forward.  In other action, the House Financial Services Committee passed H.R. 1461, commonly known as the GSE Reform legislation.  The bill creates a new and stronger regulatory agency responsible for Fannie Mae, Freddie Mac and the Federal Home Loan Bank system.  We have spoken with representatives from the Federal Home Loan Bank of Atlanta and the general consensus is that the bill is a positive step forward. Once the bill clears the House, the Senate is expected to further perfect the bill.

Final Reg DD Rules Released
The Federal Reserve has issued a final rule amending Reg DD, the Truth in Savings Act, intended to improve the uniformity of information given consumers when they overdraw their deposit accounts.  The rule deals with the popular courtesy overdraft protection service many banks offer and is effective July 1, 2006.  Consumer groups had raised concerns about the marketing of these accounts and the rule gives guidance to financial institutions by expanding the regulation’s prohibition against misleading advertisements to cover current customers and their accounts.  An accompanying staff commentary gives examples of the kinds of advertising the agency believes to be misleading.

Last Call for Bank Director Seminar
The final in a series of day-long seminars for bank directors will be held at Wyndham Garden Hotel in Marietta June 8.  The seminar would be most helpful to relatively new directors or directors of de novo banks although some of the previous programs have proven valuable to longer-serving directors as well.  Educating directors about strategic planning, business development, maximizing shareholder value and the regulatory challenges they face will increase the success of the bank. This session covers all the bases in helping the Bank Directors understand their roles and responsibilities:

• Roles, Duties and Expectations of a Bank Director in 2004

• Financial Analysis:  Ratios, Trends and Indicators

• Risk Management:  Credit, Interest Rates and Liquidity

• Asset Quality – Loan Administration

• Characteristics of High Performance Banks

• Sarbanes Oxley and Corporate Governance

• Current Regulatory Views on Bank Directors Responsibilities

• Capital Management:  Mergers and Acquisitions

• Strategic Planning

• Succession Planning: The Board’s Role

Our thanks to GBA’s Agriculture Committee, chaired by Bill Twomey, Vice President of Cook Community Bank in Adel, for an outstanding conference held this week at St. Simons.  The bankers heard from many of the leaders in rural development and spent time in peer discussions learning from each other about various ways communities throughout Georgia approach development.  Traditional agricultural lending topics were also covered.  Our thanks to Farmer Mac and Howe Construction Company for their help in sponsoring the conference.  (Picture:  G.W. Johnson, Twin City, makes a point to Jim Moore, Albany, as Betsy Johnson looks on)

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About the GBA  I  Professional Development  I  Government Relations  I  Services