Legislative Update

February 23, 2001          A review of current developments from the Georgia Bankers Association
 

Predatory Lending Bill Reported


Sen. Fort
 

Following a two-hour meeting of the Senate Banking and Financial Institutions Committee, a compromise bill was unanimously reported to stop predatory lending.  The new version is substantially improved from the original bill, S.B. 70  introduced by Sen. Vincent Fort .  Significant improvements are:

  • All provisions apply to only ‘high-cost home loans’ not all home loans

  • ‘High-cost home loan’ is a loan having an interest rate 8% more than comparable treasuries or points and fees exceeding 6% of the loan

  • Better definition of ‘loan flipping’

  • Prepayment fees or penalties are allowed in first three years

  • Restricts balloon payments until after 60 months

  • Arbitration is allowed using standard arbitration rules

  • Penalty provisions more appropriate to violations

  • Effective date moved to January 1, 2002

Again all these provisions apply only to ‘high-cost home loans’ and we believe very few, if any, loans made by our members would fall under that classification.  In a guest editorial in today’s Atlanta Business Chronicle, GBA President Joe Brannen writes, “The compromise that emerged from the Senate banking panel contains tough protections Sen. Fort should be proud of.  But as the bill moves through the legislature, it would be wise to remain focused on weeding out the abuses without blocking access to loans for people who need them.”  The bill is now before the Senate Rules Committee.  GBA has worked tirelessly to ensure the compromise bill does not hamper traditional bank lending and the GBA Board concluded this week the current version is a positive approach to the predatory lending problem.

UCC 9 Bill a Priority for Enactment


Rep. Martin
H.B. 191 by Rep. Jim Martin is pending approval by the  House Rules Committee for a floor vote.  The bill deals with secured transactions and is the first substantial rewrite of this area of law since 1962.  GBA has worked to maintain the current agriculture-related non-uniform language from the current law as well as lenders’ priority lien position on certain mechanics and materialmens liens.  Our thanks to Chairman Martin and the members of the House Judiciary Committee for their many hours of work to report a bill that deserves the support of all bankers.  We have met with the House leadership to support moving the bill out of the Rules Committee and on to a full vote in the House.

Higher Education Savings Plan


Sen. Hill
Governor Barnes' administration bill, H.B. 417, which creates a method for tax-advantaged savings for college and other higher education expenses passed the House this week.  The bill uses a conservative approach to those who could take advantage of the state tax savings and efforts to raise the level were not successful.  The bill is pending in the House Senate Higher Education Committee chaired by Sen. Jack Hill of Reidsville.

Historic Tax Credits

H.B. 118 by Representatives Jamieson, Ashe and McClinton, supported by GBA, is designed to help revitalize declining downtown areas in rural Georgia as well as inner city neighborhoods.  The bill provides a 30% state tax credit for rehabilitating residential properties, a 25% state tax credit for rehabilitating income-producing properties.  The bill was reported out of the House Ways and Means Committee this week. 

Garnishment Bill Reported

H.B. 198 by Senators Cheeks and Cagle would allow non-lawyers to respond to garnishments.  The bill is an attempt to reverse a Supreme Court ruling that answering garnishments was practicing law.  The bill is pending in the Senate Rules Committee.

For More Information

Contact GBA’s lobbying team for information about these or other bills pending in the General Assembly:

Joe Brannen (404) 420-2026
Elizabeth Way (404) 420-2027
Don Browne (404) 522-1501

Follow All Banking Legislation GBA's Legislative Update is intended to keep you apprised of key legislation GBA is tracking on the industry's behalf.  The above bills are the ones of most interest that received action this week.  Click here for a list of all bills GBA is following this session.

The electronic version of GBA's Legislative Update will be published regularly during the 2001 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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