e-Legislative Update
February 11, 2005 A review of current developments from the Georgia Bankers Association
Department’s Housekeeping Bill Reported from Committee
The Senate Banking and Financial Institutions Committee met this week and favorably reported the Department of Banking and Finance's annual housekeeping bill. Of particular interest to state-chartered banks is a provision that adds parity language to the Georgia Code giving the Department the authority to preempt state laws that have been preempted by federal law for federally-chartered institutions. This language is similar in construction to the parity language included in the Georgia Fair Lending Act that was preempted by the Comptroller of the Currency. The bill also contains provisions dealing with credit unions, money transmitters and the mortgage entities regulated by the Department. All the associations representing the affected parties have agreed to support the bill and the bill could be on the Senate floor the week of February 14.
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Mortgage Fraud Bill Heard
Attorney General Thurbert Baker appeared before the Senate Banking and Financial Institutions Committee this week to discuss S.B. 100, introduced at his request by committee chairman Bill Hamrick (R-Carrollton) and others. The Attorney General reported numerous ways mortgage fraud in perpetrated and discussed one particular case the Law Department had successfully prosecuted. The bill is designed to give prosecutors more tools, especially by adding the crime of mortgage fraud to the Georgia RICO (Racketeer Influenced and Corrupt Organizations) Act. Mr. Baker told the committee that the fraudsters were targeting neighborhoods of all income levels and it was just as common to find mortgage fraud in neighborhoods of $1 million homes as in neighborhoods of $40,000 homes. Another committee witness from an upper income neighborhood in Dacula testified how her neighborhood had been devastated by fraudulent appraisals and with homes sold (or flipped) several times such that it was impossible to get accurate and legitimate appraisals in her neighborhood. She also told of how the criminal element had taken over many of the homes creating safety concerns. Because the bill was written extremely broadly and the possibility that its provisions could inadvertently capture certain legitimate activity, the committee decided to hold the bill for further study. GBA is reviewing the bill to determine our position.
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GBA staff met this week with Sen. Chip Rogers (R-Woodstock) to continue discussing his legislation, S.B. 13, that would require the disclosure of the expiration date and certain fees associated with the cards to be shown on the cards. The author has been extremely cooperative in understanding our concerns and plans to have the bill discussed in committee next week. GBA has prepared a short issue brief explaining our concerns.
Sen. Rogers
Income Tax Apportionment
The House passed H.B. 191 this week by a large majority. The bill changes the allocation and apportionment formula for state corporate income dealing with property, payroll and gross receipts. The bill is part of Governor Perdue’s economic development initiative and is of particular interest to banks with operations in Georgia but chartered elsewhere. The bill is designed to attract more industries to locate operations in Georgia.
Gov. Perdue
Intangible Recording Tax Proration
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Trust Flexible Income
H.B. 406 was introduced this week by Representatives Wendell Willard (R-Atlanta) and Mary Margaret Oliver (D-Decatur). The bill was requested by the Fiduciary Law Section of the State Bar of Georgia and is designed to modernize Georgia law dealing with the sometimes conflicting interests trustees encounter in investing trust assets. Similar legislation has been adopted in several states and this bill is modeled after the Pennsylvania statute. Trustees owe a duty of impartiality towards both the income and remainder beneficiaries. The potential conflict arises when the trustee invests and the two kinds of beneficiaries have different short or long-term goals. The bill gives trustees the ability to invest in more flexible ways. See the executive summary prepared by the State Bar. GBA monitoring.
 Rep. Willard |
 Rep. Oliver |
As mentioned in previous Legislative Updates, the GBA has been supporting changes to Georgia’s civil justice system. This week, the bill, S.B. 3, was amended in the House and efforts to accept the house-passed amendments failed by just one vote in the Senate. The Senate can try one more time to agree with the House; and if that attempt fails, the bill will go to a conference committee.
Two bills of interest to those selling credit insurance were introduced this week. S.B. 116 and S.B. 117 were authored by Sen. Chip Rogers (R-Woodstock) and others. S.B. 116 requires credit insurance policies to be delivered to the insured within 90 days of purchase and S.B. 117 requires the insured to notify the debtor to notify the credit insurance company when an indebtedness is paid early. Both of these practices are usually automatic with the software used by banks.
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 and is sent on Fridays during the session. On Fridays when the Update is not mailed, it will be sent electronically to those who have provided us with their email addresses. 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.
GBA Lobbyists
GBA is represented this year every day at the Capitol by our three lobbyists: Joe Brannen, Elizabeth Chandler and Don Browne. Give them a call if you have questions about any legislation. Don’t forget to check the 2005 State Issues link on GBA’s website for up-to-the-minute status of bills being followed this session.
Joe
Brannen, Direct phone, (404) 420-2026
Elizabeth
Chandler, Direct phone, (404) 420-2027
Don Browne,
Direct phone,
(404) 522-1501