Legislative Update

February 14, 2003          A review of current developments from the Georgia Bankers Association

www.gabankers.com
S&P Bill Passes Senate

The Georgia State Senate unanimously passed S.B. 53 by Sen. Don Cheeks (R-Augusta) earlier this week.  The bill amends the Georgia Fair Lending Act (GAFLA) to:  1) clarify the treatment of FHA and VA loans; 2) satisfy the national rating agencies so they can again rate securities containing mortgages covered by the Act; and, 3) grant parity to state and federally-chartered financial institutions.  Sen. Cheeks has worked tirelessly to address concerns raised by Standard & Poor’s after their January 16th announcement that they would no longer rate securities if those securities contained home loans covered by GAFLA.  The rating service was concerned about the unlimited assignee liability in GAFLA and felt the ambiguities in the Act kept them from accurately assessing the risk to investors.  Our thanks to Senator Cheeks for also working with lenders and others to amend the original bill to clarify the parity language that was in the bill as reported from the Senate Banking and Financial Institutions Committee.  The original language would have granted parity to state chartered banks unless the loan was originated by a broker.  The original language was designed to ensure brokers were covered by the Act and a floor amendment was offered by Sen. Cheeks to clarify that provision.  The bill as passed now gives full parity to state chartered institutions to the same extent that their federally chartered counterparts receive from any preemption rulings.  So far, the National Credit Union Administration and the Office of Thrift Supervision have preempted the Georgia Fair Lending Act in several areas.  The Comptroller of the Currency has not ruled on the Act as it applies to nationally chartered banks.  S.B. 53 has been assigned to the House Banks and Banking Committee. Chairman Johnny Floyd, (D-Cordele) has announced a meeting of the Committee for Monday, February 17, to consider the senate bill.

Hearings Announced on H.B. 142

At a meeting of the Senate Banking and Financial Institutions Committee this week, Committee Chairman, Sen. Don Cheeks (R-Augusta), announced the committee would be holding hearings soon on H.B. 142, legislation passed recently by the House to address the unintended consequences contained in the Georgia Fair Lending Act.  No date has been set for the hearings.  GBA will be testifying much as we did before the House Banks and Banking Committee and in concert with the Community Bankers Association and the Georgia Credit Union Affiliates.

Housekeeping Bill

No action has been taken yet on S.B. 78, the annual housekeeping bill from the Department of Banking and Finance.  The most significant feature affecting banks is the ability for banks to adopt a LLC corporate structure.  Further details are on GBA’s website. It is anticipated that Sen. Ralph Hudgens, (R-Comer) will be ushering the bill through the Senate.  GBA supports.

Budget Dominates Discussion Relatively few bills are receiving action so far this session.  Most legislators are focusing on budget issues in an effort to balance next year’s budget.  The House passed the Supplemental Appropriations bill this week, which basically addresses the remaining issues from last year’s budget.  The legislature will be in recess for a week beginning next Wednesday to continue working on the budget in preparation for Senate action on the Supplemental Appropriations bill.

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.

GBA’s Lobbyists at the Capitol

The lobbying team for the GBA will be at the Capitol full-time throughout the session.  If you need to get in touch with any of them on a particular issue, several ways are available. Call the main number at the GBA, (404) 522-1501, or leave a message on their direct voice mail, or send them an e-mail. They will get back to you at the earliest opportunity.

Joe Brannen, Direct phone, (404) 420-2026
 Elizabeth Chandler, Direct phone, (404) 420-2027
Don Browne, Direct phone, (404) 522-1501

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