Mar. 11, 2011

Legislature Busy with Banking-related Bills This Week
When the General Assembly finishes their work on Friday, they will have completed Day 28 of their annual 40-day allotment to meet in formal session. The Legislature will be in session only two days next week, Monday and Wednesday, with Wednesday being what’s called “Crossover Day.” That’s the day that, in theory, a bill must have passed the Chamber where a bill was introduced or it cannot be considered by the other Chamber this session. Of course we know whole bills can be offered as amendments after the 30^th day, but that’s not done often. We just mention this to remind you that we all need to stay vigilant as the Legislature winds down their session. Committees continue to be where most of the action is taking place but a couple of important bills received floor action this week. We’ve been meeting with individual legislators and others interested in the bills we’ve been monitoring all week and continue to make progress on bills of interest.

Two Key Bills Pass House; Another Set for Senate Vote
The House cleared two bills and the Senate is expected to pass another we've been following closely this session.

• Banking Department Housekeeping. The House of Representatives passed the Banking Department’s housekeeping bill, HB 239, this week with just one dissenting vote. House Banks and Banking Committee Chairman Greg Morris, (R-Vidalia), did a good job explaining the bills to his colleagues which ensured quick passage. Among the highlights in the bill: changing the "statutory capital base" definition to eliminate daily swings due to unrealized gains and losses in the bank's investment portfolio; clarifying the number, term and compensation of bank directors; and allowing Payable on Death accounts to be opened for corporations. There are a number of other provisions dealing with other regulated entities.
   

• Foreclosure Registries. Our thanks to Rep. Mike Jacobs (R-Atlanta) for his continued work on HB 110, legislation that will preempt local ordinances requiring the registration of vacant or foreclosed property and replace those with statewide standards. The bill also provides that foreclosing lenders may avoid having to register with these local registries if the new owner (the lender in the case of a foreclosure) files the new deed within 60 days that will contain more identifying information than current deeds require. Upon providing a receipt of that deed filing to the local registry authority, the lender will not have to actually file with the registry. The bill passed the House this week.
   

• Lobbyist – Maybe You Won’t Be One After All. We told you last week about the ruling by the Georgia Government Transparency and Campaign Finance Commission (formerly the Ethics Commission) that anyone speaking to a legislator about an issue affecting their employer would have to register as a lobbyist and file biweekly reports. The Georgia Chamber of Commerce has been working on a bill to overturn the original legislation that led to the ruling. HB 232 is slated for Senate action on Friday, and if adopted and the House agrees to the changes, the bill could be on the Governor’s desk next week. Our thanks to the Chamber staff and volunteers for their quick work. The bill will be managed on the Senate floor by Sen. Bill Hamrick (R-Carrollton).

 

Morris	Jacobs	Hamrick

Other Bills We're Following Subject of Committee Hearings This Week
It's been a busy week for hearings and following are some of the bills we've been tracking that were considered:

• Condo Association Liens. As introduced, SB 136 by Sen. Bill Hamrick (R-Carrollton) provided that any lien filed by a homeowners association for past due condo fees would be superior to the lien of any mortgage in a foreclosure for amounts represented by the lien equal to the previous year of fees. Our thanks to Sen. Hamrick for listening to our concerns and those provisions were removed prior to the bill being reported out of the Senate Judiciary Committee.
   

• Reversing ACH Entries. GBA President and CEO Joe Brannen testified on a substitute to SB 35 by Sen. Mitch Seabaugh (R-Sharpsburg). The bill prohibits state agencies from recalling funds from taxpayers' accounts once they have been deposited without the express written consent of the account holder. The bill was introduced in response to the recent recall of state income tax refunds after some banks had made that money available to customers. We pointed out some consequences that could occur if the bill was enacted in its current form. Sen. Seabaugh asked us to coordinate with the State Treasurer, Tommy Hills, and Banking Commissioner, Rob Braswell, and provide perfecting language which we have done.
   

• Tenant Rights in Foreclosure. Two Judiciary Subcommittee meetings were held this week on HB 445 by Rep. Andy Welch (R-McDonough). The bill is patterned after the tenant rights rules in federal law, but goes much further in several areas. We pointed out our concerns with the bill; and after several discussions with Rep. Welch and other members of the Committee, it became clear that it was too late in this session to rewrite the bill to accommodate the disparate interests commenting on the bill. It will be studied between now and next session. Our thanks to Rep. Welch for listening to our concerns, and we look forward to continuing to work with him to address our common interests.
   

• Bankruptcy - Property Exemptions. SB 117 by Sen. Jesse Stone (R-Waynesboro) as introduced would have significantly increased the dollar amount of personal property exempt from levy and sale of property resulting from bankruptcy. Personal residence exemption would have increased from $10,000 to $50,000, or from $20,000 to $100,000 for a property with two spouses on the title. The Senate Judiciary Committee held a lengthy hearing on the bill this week. Sen. Stone realized that he had been given some incorrect information by the researcher doing work on the bill, and he agreed to reduce the residence exemptions to near those of the federal exemptions ($20,200 for individuals). His original bill also contained a provision dramatically increasing the wildcard exemption, and we are asking that that exemption remain at current levels. The bill was tabled by committee chairman Bill Hamrick (R-Carrollton); however, we will continue to stay in touch with Sen. Stone as we have significant concerns with raising the exemptions to the levels originally proposed.
   

• Cosigner/Guarantor Notice of Default. HB 245 by Rep. Rusty Kidd (I-Milledgeville) was considered by the House Judiciary Committee. The bill would require cosigners or guarantors of loans to be notified upon a loan default. Our thanks to both Rep. Kidd and the committee for accepting some language we offered to help perfect the bill. However, the bill was tabled by the Committee for further study.
   

• Foreclosure – Right to Cure. HB 419 by Rep. Billy Mitchell (D-Stone Mountain) was the subject of two hearings this week in the House Judiciary Committee. A substitute bill passed out of Subcommittee that eliminated an extended notice period of a foreclosure from 30 to 90 days. As the bill now stands, it would give a borrower the right to cure a default up to three times during the life of a mortgage within 5 days of sale. Efforts were defeated in full committee to change the notification period to 45 days. The bill was also defeated in Committee.
   

• Deposit Account Fraud. HB 488 by Rep. Mike Cheokas (R-Americus) allows a victim of deposit account fraud to recover court and mailing costs associated with recovering funds. At a House Banks and Banking Committee meeting, Rep. Cheokas said he had introduced the bill at the request of some magistrate judges. The committee favorably reported the bill.
   

• Conveyances - Security Interest Transfers. HB 465 by Rep. Tom Weldon (R-Ringgold) establishes that Instruments executed by a corporation releasing or transferring a security agreement, when signed by one officer of the corporation or an appropriately designated person, is conclusive evidence that the signer is authorized to do so. Rep. Weldon explained at a meeting of the House Banks and Banking Committee that the legislation was simply clarifying existing law and that all the bill does is to not require that a corporate seal be affixed. The bill was favorably reported out of the committee.
   

• Preneed Services. Two companion bills, HB 356 and HB 449 by Rep. Chuck Sims (R-Douglas) are intended to clarify that accounts opened in financial institutions for preneed services can be considered as a multiple account and the account can be titled in the name of the entity registered under the state preneed rules and payable on death of the purchaser in favor of the preneed provider. Both bills were favorably reported out of the House Regulated Industries Committee.
   

• No Gold and Silver Deposit Accounts Yet. A House Banks and Banking Subcommittee chaired by Rep. Tom Weldon held a hearing on HB 3 by Rep. Bobby Franklin (R-Marietta). The bill requires banks to open accounts denominated in gold and and silver and accept deposits and pay out in gold and silver upon request. After more than an hour of receiving testimony, the Committee thanked the presenters, but took no action on the bill.
   

• Tax Bill Could Have Significant Implications to Banks. A hearing was not held on HB 385 by Rep. Mickey Channell (R-Greensboro), but there continues to be a lot of discussion and we expect the bill to receive action this session. The bill was introduced from of the work of the Special Council on Tax Reform and Fairness for Georgians and is a comprehensive rewrite of Georgia's tax laws. In addition to banks having to collect sales tax on safe deposit box rentals and credit card membership fees, we’re seeing three other concerns for banks: 1) business license and state occupation tax credits (bank tax credits) earned are usable only in the tax year generated; 2) purchased software delivered electronically would now be subject to sales tax; and 3) affiliated groups would lose their ability to assign tax credits to profitable affiliates. We’ll let you know more as this issue moves forward.

Seabaugh	Welch	Stone	Kidd	Mitchell

Cheokas	Weldon	Sims	Franklin	Channell

 

GBA at the Capitol
Stay tuned and follow our updates on the GBA’s State Issues Page on our website as it’s updated daily. If you Tweet – follow us on Twitter – we’ll be Tweeting significant events as they occur. GBA is well-represented again this year at the Capitol with Elizabeth Chandler, GBA’s Senior Vice President of Government Relations, coordinating our lobbying efforts. With questions about the session, bills of interest or anything related to the process, just give her a call at 404.420.2027.