Legislative Update

April 28, 2003          A review of current developments from the Georgia Bankers Association

www.gabankers.com
Sine Die The General Assembly adjourned for the year late Friday night after enduring the longest session in over a century.  Much will be written about the session by political pundits, the media and other observers and many will be critical of the process.  While many will conclude that the 2003 session was a “do little” session with enormous amounts of time wasted on internecine battles among the Governor, the House and the Senate, we stayed focused on issues important to our industry.  When viewed in that perspective, the General Assembly passed important and urgently needed legislation.  Following is a recap of five of those issues in which the GBA was involved in helping amend or pass.

Of course, the major bill enacted was the 2003 revision to the Georgia Fair Lending Act.  The GBA worked in concert with the Community Bankers Association of Georgia and the Georgia Credit Union Affiliates to help craft a bill that would correct the mistakes from the original bill while maintaining strong consumer protections.  The bill was the first significant bill to pass the General Assembly despite enormous odds.  The Legislative Black Caucus, the Senate Democratic Leadership and Senate Banking and Financial Institutions Chairman, Don Cheeks, all felt the bill should have retained the ability of borrowers to sue investors who purchase mortgages from originating lenders.  While this issue was never high on our priority list, it became the focus of the advocates and their supporters in the media.  Many of those advocating this position also took the view that “fixing” this problem was the only thing the General Assembly should pass this year.  At the time, Georgia was the only state with a law in place that allowed investors to be sued and the secondary mortgage market for Georgia was in shambles.  Had the General Assembly not acted, even traditional investors like Freddie Mac and Fannie Mae were preparing to exit our state.  In the end, the House passed the GBA-endorsed bill and the Senate rebuffed the attempt to go to conference with the goal of deleting this and other provisions from the bill.  Gov. Sonny Perdue was actively engaged on the Senate side and his floor leader, Bill Stephens, successfully moved the adoption of the House position.

Where do we go from here?  There are still some bruised feelings among those who felt the bill went too far.  They are taking the position that moving the anti-flipping provision to only high-cost loans and eliminating assignee liability gutted the consumer protections in the original bill.  Of course, bankers know different, so please help GBA educate your members.  The new bill allows traditional lenders to make traditional loans to traditional borrowers – a process the previous law had impaired.

Other Legislation Passed

¨ H.B. 506 creates a new procedure by which manufactured houses may be converted from personal property to real property and vice versa.  The bill addresses problems some of our members have reported who are selling manufactured housing paper in the secondary market.  A new procedure is put in place for titles to be retired when the home is converted to real property and the title to be reinstituted if the home is detached, thereby causing the home to become personal property.  Be looking for more information on this process.

¨ H.R. 703 creates a study committee to review all sorts of loans made by other lenders such as payday loans, title pawns and the like.  Expect bank overdraft protection programs to be questioned during the hearings planned in the fall.

¨ S.B. 78, the annual Housekeeping Bill from the Georgia Department of Banking and Finance.  The most significant feature affecting banks is the ability for banks to adopt an LLC corporate structure.  

¨ H.B. 385 places a fee cap that a consumer must pay for credit counseling, requires insurance to protect client funds and requires organizations to disburse client funds within 30 business days of receipt.

GBA Keeps You Informed

GBA’s Legislative Update is intended to keep you apprised of the bills that the GBA is tracking on the industry’s behalf.  Subsequent issues will be sent on alternate Fridays except when the legislature is in recess.  On Fridays that the Update is not sent, GBA’s LegisFAX will be sent via fax to all CEO’s and those interested in tracking issues on a weekly basis. The electronic version of both the Legislative Update and the LegisFAX will be sent by e-mail to those on our e-mail list.  The ‘State Issues’ section of GBA Online, GBA’s home page, is linked to the website maintained by the General Assembly and assures that you will have the latest version of any bill being tracked by the GBA.

The electronic version of GBA's Legislative Update will be published regularly during the 2003 session of the Georgia General Assembly.  Let GBA's Lydia Thomas know of others you would like to add to our distribution list.

State Legislative Issues l Georgia House of Representatives l Georgia Senate