Legislative Update

February 8, 2002          A review of current developments from the Georgia Bankers Association

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Realtors, Bankers Reach Compromise As predicted in last week’s Legislative Update, the Georgia Association of Realtors, the Georgia Bankers Association and the Community Bankers Association have come to an agreement not to try to address this session the Georgia statutes as they relate to whether or not a bank can operate a real estate brokerage operation.  This issue is being hotly debated in Washington since the Federal Reserve and U.S. Treasury proposed national banks be given real estate brokerage authority and legislation was introduced at the request of the Realtors to block the regulations.  The agreement essentially postpones the debate until the federal government takes some action.

Governor Announces Predatory Lending Bill

At a press conference yesterday, Governor Roy Barnes announced the major provisions he intends to have included in legislation being introduced at his request to address predatory lending.  The triggers that would cause a home loan to be labeled a “high cost” loan and subject to the bill’s restrictions are patterned loosely after the federal HOEPA triggers.  The HOEPA rate triggers are 10% more than comparable Treasuries and the rate triggers are 8% in points and fees.  The Governor’s bill will have rate triggers of 10% (falling to 8% in October when HOEPA also moves to 8%) and 7% in points and fees.  Some restrictions will apply to all home loans such as prohibiting “flipping” and a ban on single premium credit insurance on home loans. The Governor’s bill will include a number of loan terms in the points and fee trigger not included in HOEPA such as yield spread premiums and prepayment penalties.  If a loan falls under the definition of a “high cost loan,” significant restrictions will come into play such as:  no mandatory arbitration clauses, no balloon payments and mandatory counseling for borrowers.  While these restrictions may seem ominous at first glance, remember they apply only to “high cost” home loans and we do not believe they will apply to traditional mortgage loans.  Once the bill is introduced, the GBA will be better able to determine our position.  GBA President Joe Brannen said, “We are glad the Governor chose to weigh in on this complex issue and it appears he has approached predatory lending in a comprehensive way.  Our interest in this issue from Day One has been to ensure any predatory lending legislation not harm traditional lending, and the Governor’s concept does not appear to intrude into the mortgage loans our members make.”

Department Bill Passes Senate

S.B. 353, the Banking Department's annual housekeeping bill, was passed unanimously by the Senate this week.  Sen. Casey Cagle (R-Gainesville) presented the bill for consideration.   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 is now pending in the House Banks and Banking Committee.  GBA supports.


Cagle

UCC 9 & UCC 5 Bill Introduced

H.B. 1253 was introduced this week by Rep. Robert Reichert (D-Macon) and others.  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.  The bill is pending in the House Judiciary Committee.  GBA supports.


Reichert

Trust Equity Bill Reported H.B. 1176 by Rep. Butch Parrish (D-Swainsboro) and others was reported out of subcommittee this week.  The bill allows Georgia banks with trust powers to provide their services outside the adjacent states.  GBA supports.


Parrish

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.

State Legislative Issues l Georgia House of Representatives l Georgia State Senate l Governor

Federal Legislative Issues l Georgia Members of Congress