February 1, 2008

Legislature Returns from Recess to a Busy Week of Activity
The Georgia General Assembly reconvened Monday of this week after a weeklong recess in recognition of the Martin Luther King, Jr. Holiday and for budget hearings.  The week was filled   with action on new bills of interest being introduced and others being the subject of committee or floor action.  Below is an update on the major issues we are following this year.

Certain Checks Losing Special Status in Mortgage Closings
The Senate Judiciary Committee has reported out an amended version of S.B. 355 by committee chairman, Sen. Preston Smith (R-Rome).  The bill, as originally introduced, would have removed the special status official bank checks are given in real estate settlements.  Current law requires settlement agents to use collected funds to disburse settlement proceeds.  The law provides four classes of checks can be used in lieu of collected funds:  1) official checks issued by federally insured financial institutions, 2) checks issued by HUD-approved lenders, 3) checks issued by a lender approved to do business in Georgia, or 4) checks issued from lawyers trust accounts.  This bill as introduced would have eliminated the first three categories of checks and require the checks to have cleared if they are to be used to disburse settlement proceeds.  In response to industry concerns, Sen. Smith offered a substitute bill that would allow official bank checks to retain their current status.  Mo Thrash, the lobbyist for the Mortgage Bankers Association, spoke against the amendment saying essentially   all lenders' checks should be treated the same and that their members would support a total wire transfer system.  Our thanks to Chairman Smith and other members of the committee for their assistance, especially Sen. Kasim Reed (D-Atlanta) and Sen. Michael Meyer von Bremen (D-Albany).  A similar bill, H.B. 918 by Rep. Roger Lane (R-Darien), is pending in the House Judiciary Committee.  This bill still contains language that would eliminate official bank checks, and we hope this version can be amended similar to the senate version.  Here is a link to the Members of the House Judiciary Committee.  If your representative is a member of this committee and you are concerned about losing the ability to use official bank checks in closings, you will want to mention this to your representative.

Governor Asks General Assembly to Approve ID Theft Task Force

Governor Sonny Perdue has asked for legislation to be passed that would establish an identity theft task force within the Georgia Bureau of Investigation (GBI).  The bill, S.B. 388, was introduced this week by Sen. Joey Carter (R-Tifton).  In making the announcement of his initiative, Governor Perdue said, “Today I have a message for identity thieves in Georgia:   Your number is up.  With this legislation, we are ensuring that Georgia’s identity theft laws are backed by the full force of the GBI and that identity thieves will be brought to justice.”  Governor Perdue’s legislation would establish a dedicated identity theft task force within the Investigative Division of the GBI.  Governor Perdue included $1 million in his budget proposal to fund this initiative.  This task force will combat identity theft on several fronts including investigating alleged

  identity theft, educating the public, supporting victims and training local law enforcement in combating identity theft.  According to the Governor, identity theft cost Georgia’s citizens and businesses more than $25 million in 2006.  From 2002 to 2006, there were more than 34,000 reports of identity theft in Georgia filed with the Federal Trade Commission (FTC).  Georgia is ranked 7th in the nation in incidents of identity theft per capita.  Currently, the Governor’s Office of Consumer Affairs is charged with investigating identity theft.  This legislation would transfer that statutory authority to the GBI.

Credit File Freeze Bill Passed by House - Fees Reduced
The House of Representatives this week passed, H.B. 130, legislation that mandates the credit reporting agencies to allow consumers to put freezes on their personal data.  The bill creates the rules as to how the freezes and thaws of individual credit files will work.  Several amendments were adopted on the   floor of the House, the most significant of which reduces the proposed fee from $10 to $3 for each freeze/thaw.  The bill has has been referred to the Senate Banking and Financial Institutions Committee.

Nationwide Mortgage Lender/Broker Licensing Bill Expected to Be Reported

At the request of the Georgia Department of Banking and Finance, House Banks and Banking Committee Chairman, James Mills (R-Gainesville) and Allen Peake (R-Macon) introduced H.B. 921, a bill that would allow Georgia to participate in a nationwide system of mortgage lender and broker licensing.  At a hearing last week, Commissioner Rob Braswell explained the intent of the legislation is to create a database of mortgage lenders and brokers in order to track individuals and their licensing.  Braswell said the system was a project of the Conference of State Bank Supervisors and he felt the legislation would be a positive benefit.  The system is designed to prevent lenders and brokers with regulatory problems to simply move to another state to escape their past. 

  Representative James Mills The system became operational in January in a number of states, but it will be necessary for this legislation to pass in order for the Banking Department to share information about Georgia registrants and licensees.  The bill is expected to be reported out of the House Banks and Banking Committee meeting on Friday.  In the Senate, Banking and Financial Institutions Committee chairman, Bill Hamrick (R-Carrollton) introduced a companion bill, S.B. 375.

GBA Seeking Amendments to Proposed Uniform Security Act
Legislation has been introduced at the request of the Secretary of State that would adopt a national model for state regulation of the securities industry.  The bill, S.B. 358, has been considered in past legislatures, but never gained enough momentum to pass.  This year, Senate Banking Committee Chairman, Bill Hamrick (R-Carrollton) has introduced the bill and had a series of hearings.  At a hearing this week, GBA's Elizabeth Chandler spoke in support of the bill, but informed the committee the association would be seeking amendments.  The amendments were to restore certain current exceptions for financial institutions currently contained in the code.  The amendments are also intended to put other exemptions in place as contemplated by the federal Gramm Leach Blylie Act.   The federal banking regulators had recommended several changes to the model act to the national Uniform Commissioners.  Those concerns were not totally addressed in the model act, and we will be attempting to include their recommendations in the Georgia statute.  This is a complex area that affects mostly those banks with broker-dealer subsidiaries and many of our community bank members who have joint employees with a broker-dealer.

Boat Titling Bill Introduced - We Need Your Feedback
Rep. John Heard (R-Lawrenceville) has introduced H.B. 1000, legislation that would create a titling process for certain watercraft.  The bill provides for a system to execute titles for watercraft similar to that for automobiles.   The Department of Revenue is given the authority for this system and the Commissioner shall be authorized to delegate any administrative responsibility for retention of applications, certificates of title, notices of security interest, and any other forms or documents relating to the application and registration process to the appropriate authorized tag agent for the county in which the application is made or the registration is issued.  The Act applies to vessels with the model year of 2008 and beyond.    Representative John Heard The current registration process for boats under the Department of Natural Resources remains in effect.  In a poll of GBA's Credit Committee, there was general support for the concept although several members raised questions that will need to be addressed which we will share with the author.  We will be following this issue closely and let you know of it's progress. Please let us have your feedback on the need for the legislation.

Wire Transfer Bill Introduced - Banks Not Included, so Far
Rep. Tom Rice (R-Peachtree Corners), has introduced legislation, H.B. 1028, that will require certain issuers of international wire transfers to collect an additional 2% fee on each wire.  In conversations with GBA staff, Rep. Rice has informed us his intent is find ways for people who are not in Georgia legally to help pay for services currently borne by taxpayers.  While general statutes cannot constitutionally direct where revenues collected under their provisions can be spent, the bill contains language saying the intent of the new revenues raised by this bill is for the revenue to be used for trauma care.  The bill as introduced would only apply to money service businesses licensed by the Georgia Department of Banking and Finance.  In practicality, the two companies most   Representative Tom Rice impacted will be Western Union and MoneyGram.  The bill contains a provision that the money transmitter collecting the fee may withhold 20% to cover costs and other expenses.  Recognizing that many people sending international wires are legal residents, the bill contains a provision giving a 100% tax credit to the taxpayer's following year tax return.  Rep. Rice attempted similar legislation in the 2006 session that would have required these money transmitters to determine if the person purchasing the wire was a legal resident.  That legislation was not successful.

GBA Hosts House Banks and Banking Committee
GBA continued a long-standing tradition of coordinating a dinner and serving as a co-host for the House Banks and Banking Committee this week at the Commerce Club.  "The Committee works hard to perfect legislation affecting the entire financial   services industry, and this annual dinner is our way of saying 'thank you' for their service," said GBA's Senior Vice President for Government Relations, Elizabeth Chandler.

Contact GBA Staff Lobbyists With Questions

GBA's three lobbyists will be onsite at the Capitol all session to be available to legislators and staff as questions arise about the various bills that may affect the banking industry.  If you have questions about any legislation pending, please call on these professionals for their help.  Also, GBA's State Issues Page of our website will be updated daily during the session.

  

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