Legislative Update

February 7, 2003          A review of current developments from the Georgia Bankers Association

www.gabankers.com
GAFLA Bill Passes House Although the Legislature was in session only two days this week, the House of Representatives quickly passed H.B. 142 by Rep. Johnny Floyd (D-Cordele) and others which corrects the unintended consequences in former Governor Roy Barnes’ predatory lending bill, the Georgia Fair Lending Act (GAFLA).  On Monday, the House Banks and Banking Committee considered several amendments to the original bill and adopted two that were clarifying in nature and non-controversial.  When the bill went to the floor on Tuesday, two other clarifying amendments were adopted and the final vote was 175-0.  The bill now goes to the Senate where it will be assigned to a committee on Monday.  The bill addresses all the key components our members suggested be changed such as more closely following the definitions in the Truth in Lending Act; adding more safeguards for lenders and clearer definitions for consumers in the flipping prohibition; and moving assignee liability to “high cost” loans to more closely track federal law.  Our thanks to Rep. Floyd for the good job he did in explaining the bill in Committee and on the House floor.


Rep. Floyd

S&P Bill Passes Senate Committee The Senate Banking and Financial Institutions Committee reported S.B. 53 by Sen. Don Cheeks (R-Augusta).  The bill amends the Georgia Fair Lending Act 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 they announced January 16 they would no longer rate securities if those securities contained home loans covered by GAFLA.  Since the S&P announcement, the other two national rating services, Moody’s Investors Service and Fitch Ratings, have since made similar announcements.  The rating services were concerned about the unlimited assignee liability in GAFLA and felt the ambiguities in the Act kept them from accurately assessing the risk to investors.  The House bill, H.B. 142 mentioned above, contained one approach to try and address the problem by moving assignee liability to high cost loans.  Sen. Cheeks’ bill takes a different approach and caps the liability.  Our thanks to Sen. Cheeks for working with the industry to clarify the parity language adopted by the committee, and we anticipate a floor amendment with the new language.  S.B. 53 could be voted on by the full Senate on Tuesday.


Sen. Cheeks

Predatory Lending

H.B. 142 by Representatives Floyd, Shaw, Parrish, Royal, Channell, Skipper, Porter and Mosely.  The bill is written to address the unintended consequences in the Georgia Fair Lending Act passed in 2002.  The authors also included language in the bill to address concerns raised by Standards & Poor’s to return stability in the secondary market.  The bill clarifies the ambiguous terms in GAFLA, more closely follows the federal Truth in Lending Act, and gives lenders more clarity in complying with the flipping prohibition. GBA supports.

S.B. 28 by Senators Cagle, Balfour, Brush and Williams. Companion Senate bill to H.B. 142 described above.  GBA supports.

S.B. 53 by Senator Cheeks.  Amends the Georgia Fair Lending Act so as to cap assignee liability; provides exclusions for VA, FHA and USDA fees; and affords parity for state-chartered institutions to the extent that similar federally-chartered institutions are preempted from the Act.  GBA supports.

H.B. 82 by Representatives O'Neal, Richardson and Massey.  Excludes certain fees paid to federal government agencies, such as VA, FHA and USDA, so that these pass-through fees will not be included in the ‘points and fees’ calculation in the Georgia Fair Lending Act.  GBA supports.

H.B. 146 by Representative Birdsong.  Excludes fees associated with VA loans from the ‘points and fees’ calculation in Georgia Fair Lending Act.  GBA supports.

Housekeeping Bill S.B. 78 by Senator Cheeks.  Annual housekeeping bill from the Georgia 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. GBA supports.

Opt-In H.B. 184 by Representatives Rogers, Jamieson, Westmoreland, Dean and Hudson.  Would require financial institutions to obtain a consumer’s consent before disclosing nonpublic personal information to nonaffiliated third parties.  This bill essentially changes what is now an opt-out for customers as provided for under the Gramm-Leach-Bliley Act to an opt-in when sharing a customer’s information.  GBA opposes.

Credit Card Receipts H.B. 213 by Representatives Moritakis, Oliver, Ashe, Wilkinson, Teilhet and Gardner.  Prohibits a credit card holder’s complete card number or expiration date from being printed on a receipt.  GBA monitoring.

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 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 State Senate l Governor

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