GBA Legislative Update

Legislative Update
February 15, 2002 A review of current developments from the Georgia Bankers Association
www.gabankers.com
Governor Introduces Predatory Lending Bill	H.B. 1361 was introduced this week at the request of Governor Roy Barnes by his floor leader, Rep. Charles Smith (D-St. Marys). There are a number of positive provisions in the bill such as the interest rates that would trigger a home mortgage loan as a high-cost loan and the preemption of the ability of local governments to enact predatory lending ordinances. However, there are also a number of other provisions that apply to all home loans and a careful reading of the bill as introduced will give lenders serious concern. For example, if a mortgage loan is refinanced and eventually goes into foreclosure, the borrower could have the foreclosure enjoined by alleging the lender did not consider his entire circumstances when the loan was made. Also, standard loan terms such as arbitration clauses would be precluded. Lenders making loans for manufactured houses or home improvement projects would be subject to claims and defenses to the same extent as the seller of the manufactured home or the home improvement contractor. The GBA is working with Rep. Smith and the Governor’s staff to explain these and other negative provisions in the bill.	Rep. Smith

GBA Subject of Protest	An Atlanta-based organization called the Neighborhood Assistance Corporation of America staged a protest at the Capitol this week in support of passing a predatory lending bill. Around 100 protestors in vans circled the Capitol and rallied outside the Governor’s office passing out leaflets targeting GBA President Joe Brannen. “I’m still puzzled why we would be singled out for this rally,” Joe said. “NACA is well-respected for their first-time home buyers program and I thought we had the same goal of eradicating predatory lending. The leaflet called on me to ‘do the right thing’ and I guess that’s what we’re doing by helping get a bill passed that attacks the problem of predatory lending without cutting off credit to deserving people,” he concluded.	Joe Brannen

House Banking Subcommittee Reports Housekeeping Bill	The Department of Banking and Finance’s annual housekeeping bill, S.B. 353, has been reported out of a House Banks and Banking Subcommittee chaired by Rep. Lynmore James (D-Montezuma). The bill addresses a number of areas of interest to bankers such as allowing the Department to assess fees via ACH transactions, share examination information with other regulators of new services banks are offering such as securities, and strengthen the Department’s policy on employee gifts and how the employees handle potential conflicts of interest when they own bank stock. The bill will be available for consideration at the next meeting of the full Committee.	Rep. James

Predatory Lending	S.B. 70 by Senate Banking Committee Substitute. The bill attacks predatory lending practices without causing undue harm to traditional lenders. The bill was adopted unanimously by the Senate in the 2001 session and is pending in the House Banks and Banking Committee. GBA supports the Senate-passed version.

UCC 9 & UCC 5 Bill Introduced	H.B. 1253 by Rep. Robert Reichert (D-Macon) and others was reported out of a House Judiciary Committee subcommittee. The bill simply cleans up language from the UCC 9 bill passed last session and calls for the adoption of the newly revised Article 5 dealing with Letters of Credit. GBA supports.	Rep. Reichert

Trust Equity	H.B. 1176 by Rep. Butch Parrish (D-Swainsboro) and others was reported out of the House Banks and Banking Committee this week. The bill allows Georgia banks with trust powers to provide their services outside the adjacent states. The bill is available for the Rules Calendar. GBA supports.	Rep. Parrish

Fraudulent Deeds	S.B. 411 by Senators Paul, Price, Johnson, Stephens, Crotts and others. Provides an alternative to the current panel process to challenge deeds proven to be fraudulent to be removed from county records. The panel would be replaced by a judicial determination. The bill is pending in the Senate Judiciary Committee. GBA monitoring.	Sen. Paul

Office of Lending Compliance	H.B. 1191 by Rep. Gail Buckner (D-Jonesboro) and cosponsored by Reps. Barnes, Dodson and Randall creates the Office of Lending Compliance. The new agency would have investigative powers over consumer complaints of any sort against lenders and referral authority to relay the results of their investigation to the appropriate regulatory or law enforcement agency. The GBA has told the author we would oppose the bill as duplicative of the existing regulatory structure of the state and federal banking regulators. The bill is pending in the House Banks and Banking Committee.	Rep. Buckner

Uniform Fraudulent Transfer Act	H.B. 84 by Representatives Martin, Allen, Reichert and Campbell creates the Uniform Fraudulent Transfer Act to update the Georgia Code to conform with national standards. This same bill was almost adopted last year but got caught up in the last minute rush to adjournment. The bill has passed the House and is pending in the Senate Banking and Financial Institutions Committee. GBA supports.	Rep. Allen

Predatory Lending Education Act	S.B. 435 by Sen. David Scott (D-Atlanta) creates the Council for the Prevention of Predatory Lending. The Council would be empowered to hold hearings, conduct education programs, refer allegations of lending violations to government agencies and study the causes of the problem. Pending in the Senate Banking & Financial Institutions Committee. GBA monitoring.	Sen. Scott

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 mailed on alternate Fridays except when the legislature is in recess. On Fridays that the Update is not mailed, 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 Way, 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 2002 session of the Georgia General Assembly. Let GBA's Lydia Thomas know of others you would like to add to our distribution list.

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