Legislative Update

February 6, 2004          A review of current developments from the Georgia Bankers Association

www.gabankers.com

Payday Lending Legislation Reported

The House Banks and Banking Committee met this week and reported a substitute payday lending bill to the full House.  On a vote of 15-12, the committee voted to abolish payday lending rather than regulate the practice.  Out of an abundance of caution to avoid unintended consequences like we encountered with the predatory lending issue, GBA had recommended language be included in the bill to give a broad exemption for banks; however, the committee asked that the language be narrowed.  An amendment will be offered when the bill gets to the floor to take care of the exemption, and we are confident the amendment will be incorporated.  GBA has met with the staffs of the Attorney General, Industrial Loan Commissioner and Department of Banking and Finance to work out the details of the amendment, and all have agreed to the language.  Our thanks to Chairman Johnny Floyd (D-Cordele) for bringing our original language up for debate and for his work with others to get the bill amended on the floor.  One of the Governor's Floor Leaders, Larry O'Neal (R-Warner Robins) will sponsor the amendment.  Rep. O'Neal is also a member of the Banks and Banking Committee and is experienced as a bank lawyer.  The dynamics of this issue are quite different from the predatory loan bills from the past three years.  During that debate, we could honestly say no banks were involved in predatory lending, and therefore banks should be exempted.  In the case of payday lenders, the only way the large national payday loan chains operate here is by having a bank relationship and using bank paper to fund the loans.  These are all non-Georgia banks, mostly state-chartered; and that is the reason broad exemption language could not be used while concurrently stopping the practice of payday lending.  GBA's involvement in this issue has been to ensure that if the payday loan industry were to be regulated by the Banking Department, sufficient fees are generated for the Department so bank fees did not subsidize their regulation.  We have also been constantly concerned about banks inadvertently being brought into the bill which is why we will be supporting the amendment described above on the floor.  And the final concern GBA has had is to protect the ability of banks to pay overdrafts either individually or through prearranged overdraft privilege programs.


Rep. Floyd


Rep. O'Neal

Housekeeping Bill Passes Senate S.B. 405, The Banking Department’s annual housekeeping bill, introduced by Senate Banking Committee Chairman Don Cheeks (R-Augusta), was unanimously passed by the Senate this week and is pending in the House Banks and Banking Committee.  The most significant issue for banks is the elimination of the requirement to get advance approval from the Department for third party contracts.  GBA supports the bill.


Sen. Cheeks

'Living Wage' Ordinances to be Preempted

H.B. 1258 has been introduced by Representatives Ehrhart, Watson, Sailor and Bannister.  The bill would preempt local governments from enacting minimum wage and benefit levels for individuals employed within their jurisdictions.  The City of Atlanta has pending before City Council an ordinance that specifies a minimum salary for anyone working within the City.  The GBA has opposed that ordinance and supports this legislation that would preempt local governments from enacting wage rates different from state and federal minimums.


Rep. Ehrhart

Consumer Reporting Agencies H.B. 656 was introduced last session by Representatives Chambers, Ehrhart, Oliver, Jamieson, Moritakis and others.  The bill was recently reported out of committee and is eligible for consideration by the Rules Committee.  The bill requires the national consumer reporting agencies (such as Equifax) to notify a consumer if a person or entity, other than a person or entity with whom the consumer has a business relationship, makes an inquiry concerning the consumer's file with the consumer reporting agency.  The notification must be in writing and state the name, full mailing address, and telephone number of the person or entity making the inquiry. As used in this bill, the term 'business relationship' means information contained in the files maintained by the consumer reporting agency on the consumer that shows that the consumer has an existing or former account or relationship with a person or entity.  The original bill was amended to provide for specific charges from the reporting agency to the requester of the information.  GBA has met with the author of the bill to express concern about the procedural difficulties created by the bill and pointed out how consumers may already opt-out from having their information being given by the reporting agencies to solicitors.  Her intent is to help reduce identity fraud, but our concern is that the cost and unworkable administrative burden to both the requesting entities and the consumer reporting agencies far outweigh what could only be negligible benefits that may accrue to prevent identity fraud.


Rep. Chambers

Lien on Abandoned Vehicles Reported out of Committee

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 while held in storage.  The bill was reported out of the Senate Transportation Committee this week.  GBA monitoring.


Sen. Brush

No Action on Predatory Lending

H.B. 1171 was introduced earlier in the session by Representatives Holmes, Bruce, Sinkfield, Stanley-Turner, Mobley and others The bill 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 and no action has been scheduled on the bill.


Rep. Holmes

Call Centers Hearing Held

A hearing was held this week by the House Public Utilities and Telecommunications Committee on H.B. 1218 by Representatives Borders, Greene, Childers, Moraitakis and Black.  The bill amends the Fair Business Practices Act to require individuals working in a call center to provide their name, the company for whom they are employed and the city, state and country where the call center is located within the first 30 seconds of the call and prior to any personal information being asked of the caller.  Most of the speakers at the hearing opposed the bill and the committee took no action.  GBA monitoring.


Rep. Borders

Deposit Account Fraud H.B. 1301 was introduced this week by Representatives Moraitakis, Dodson and Oliver.  The bill removes the requirement that a 'present' consideration be present when an individual writes a check the individual knows to be fraudulent.  In the past, it has been somewhat difficult for plaintiffs to recover damages from defendants with the strict requirement that the fraudulent check had been given for a 'present' consideration.  Removing the word should assist plaintiffs in their recovery.  GBA monitoring.


Rep. Moraitakis

Unauthorized Practice of Law H.B. 1311 by Representative Alan Powell (D-Hartwell) was reported out of the House Governmental Affairs Committee this week.  The bill deletes the current restriction on real estate brokers to close a real estate loan as an unfair trade practice.  We understand the bill is in response to a Supreme Court decision last year that addressed the subject of non-lawyers closing real estate loans.  Because banks are parties to the transaction, the Court's decision has had little effect on our practices.  GBA monitoring.


Rep. Powell

Link to All Bills Being Tracked The bills mentioned above are the major bills which either received action this week or which members have asked that we continue to maintain on our 'must watch' list.  There are a number of other bills the association is monitoring which could have an impact.  The 2004 State Issues page has the complete list.

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.  Paper and electronic versions 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 Lobbyists

GBA will again be represented this year 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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