Legislative Update

February 20, 2004          A review of current developments from the Georgia Bankers Association

www.gabankers.com

Payday Lending Bill Amended in Senate

 This week, the Georgia state Senate amended S.B. 157, the House-passed payday loan bill, to further strengthen its provisions and to ensure banks were not unintentionally covered by the bill.  As we reported in an earlier Legislative Update, GBA had suggested language that would exempt banks and thrifts by tying the exemption to institutions having federal deposit insurance.  The Committee felt that language was too broad and adopted language that would still exempt banks as long as they were regulated by the Banking Department or operated under OCC preemption.  The Senate amendment added back most of the language GBA suggested, but did not weaken the bill as the amendment also restricted agency relationships out-of-state banks may have with payday lenders.  Our thanks to the staff of Attorney General Thubert Baker who helped draft the amendment and to Senate Banking and Financial Institutions Committee Chairman, Don Cheeks (R-Augusta), for offering the amendment.  The bill is back in the House where they have the option of accepting the amendments or starting the process to put the bill in a conference committee.



Attorney General Baker

Securities Rewrite Bill Amended to Include All Banks S.B. 488 Secretary of State Cathy Cox's legislation to completely update Georgia securities law was reported out of the Senate Banking and Financial Institutions Committee this week.  The Department of Banking and Finance asked the bill be amended to broaden the number of banks which can issue irrevocable letters of credit (LOC) in conjunction with securities offerings.  The original bill used decades-old language restricting the issuing of these LOC to only Fed-member banks.  The Department asked that language be broadened to include any bank with deposit insurance. Our thanks to Secretary Cox, Banking Commissioner David Sorrell and to Sen. Casey Cagle (R-Gainesville) for their help with the amendment.  The bill extends enforcement of the sale of variable rate annuities to the Secretary of State in addition to the Insurance Commissioner.  Efforts to remove that language failed in Committee, but we understand the effort will be attempted again when the bill reaches the Senate floor.  Click here for a summary of the bill and click here for brief talking points. 


Sen. Cagle

 

Gift Cards Under Attack

S.B. 443 by Senators David Adelman and Mitch Seabaugh would prohibit the imposition of a nonuse, handling, dormancy, or maintenance fee on gift cards and gift certificates issued by merchants or persons acting on behalf of merchants.  The way the bill is drafted, gift cards issued by banks would be covered by the bill.  GBA staff has met with the principal author to discuss the difference between bank-issued gift cards and merchant-issued gift certificates.  However, the author continues with his desire to prohibit any fees to be charged with the cards.  Here's a brief white paper about the negative impact of the bill.  We will continue meeting with the author to help educate him on the consequences on consumers should his bill prevail.


Sen. Adelman

Credit Reports

GBA staff continues to met with Rep. Jill Chambers (R-Atlanta) to discuss her concerns with credit granted to individuals at an address different from the address to which a solicitation was mailed.  Rep. Chambers introduced H.B. 656 earlier this session and intends to amend the bill with new language.  The new language would require credit grantors to notify customers at the original address if credit was approved for the same customer at a new address. GBA remains concerned about the burden such a bill would cause as well as the redundancy with the new federal FACT Act.


Rep. Chambers
Redistricting on Legislators’ Minds

The House and Senate spent time this week working on new district maps in response to a recent federal Court of Appeals ruling which voided the current districts drawn in 2002.  There is still some question whether the primaries can be held on schedule in July.

DBF Housekeeping Bill S.B. 405 by Senators Don Cheeks and Bill Stephens has passed the Senate and should be considered soon by the House Banks and Banking Committee.  The bill is the annual housekeeping legislation introduced at the request of the Georgia Department of Banking and Finance.  The only provision of significant interest to banks deals with dropping the requirement for prior approval for third party service contracts.   A summary is on the GBA website.

Lien on Abandoned Vehicles S.B. 404 by Senators Cheeks, Brush and Hall creates a new type of lien on abandoned vehicles to include the cost of an environmental cleanup created by the vehicle.  The bill unanimously passed the Senate last week and is pending in the House Judiciary Committee.  Sen. Don Cheeks (R-Augusta) told his fellow senators the bill was introduced to correct a problem a constituent had encountered.  The constituent had towed a tanker truck to his lot at the request of law enforcement, but the towing operator was unable to recoup his significant costs in cleaning up the resultant spill contamination at his lot. 

Deposit Account Fraud

H.B. 1301 by Representatives Moraitakis, Dodson and Oliver removes the requirement that a 'present' consideration be present when an individual presents a check the individual knows to be fraudulent.  The bill is pending in the House Banks and Banking Committee, but a hearing date has not yet been scheduled.

Predatory Lending H.B. 1171 by Representatives Holmes, Bruce, Sinkfield, Stanley-Turner, Mobley and others amends the Georgia Fair Lending Act to return it to the version passed in 2002.  Back would be covered loans, the old definition of flipping, and the assignee liability language that caused the rating agencies to shut down the mortgage market in Georgia; and gone would be the parity language that allowed state-chartered banks to be exempted from the Act.  GBA opposes.

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 Lobbyists

GBA is represented 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 2004 State Issues link on GBA’s website for up-to-the-minute news from the session.

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 2004 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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