e-Legislative Update
March 18, 2005 A review of current developments from the Georgia Bankers Association
Six Days Remaining in 2005 Session
The General Assembly was in session only three days this week, but continued active consideration of a number of bills we have been following this session. There are only 6 legislative days left in the 2005 Session.
Mortgage Fraud Bill on Governor’s Desk
S.B. 100 by Senators Hamrick, Thompson, Johnson and Starr was introduced at the request of Attorney General Thurbert Baker giving law enforcement more tools to prosecute mortgage fraud. The bill would impose harsh penalties on people who inflate the cost of homes and then sell them quickly to make an illegal profit. This practice is generally called ‘flipping’. The term ‘flipping’ was first introduced during debate on the Georgia Fair Lending Act. In that case, the term was used to describe an individual who refinanced their own home several times without gaining a benefit. The bill passed the Senate earlier in the session and was slightly amended in the House. The Senate agreed to the House amendments yesterday thereby clearing the bill for the Governor’s expected signature.
Attorney General Baker
We continue to be impressed with the way freshman Sen. Chip Rogers (R-Woodstock) has been handling his bill, S.B. 13, which requires the disclosure of the expiration date and certain fees associated with gift cards to be shown on the cards. The House Judiciary Committee met to consider the bill this week and after a lengthy discussion, the bill was referred to a subcommittee for further study. It was interesting to note how many members of the committee felt the General Assembly ought to set the terms and conditions of gift cards instead of allowing the free market to work. The Subcommittee met yesterday and the bill was reported back to the full committee without any further restrictions.
Sen. Rogers
We have been following several bills introduced as a result of the fraudsters who got access to Alpharetta-based ChoicePoint's database. S.B. 230, by Senators Hamrick, Grant and Mullis, was patterned after a similar law in California that requires investigative consumer reporting agencies (like ChoicePoint) to notify consumers if the company’s database has been compromised. Several attempts have been made to greatly expand the bill beyond the data traffickers, but the bill was reported out of the House Judiciary (Non-civil) Committee yesterday in essentially the same form it passed the Senate. GBA has been concerned if our members were covered by this bill – not because of any fears related to notifying customers of security breaches, but out of a concern that this new law could be different from what the federal regulators are proposing. Also, some of the proposed substitute language which was unsuccessfully offered would have created a new cause of action for parties to litigate over matters which we felt were too vaguely defined.
Tax Bill Reported from Committee
H.B. 488 has been managed by Ways and Means Committee Chairman Larry O’Neal (R-Warner Robins). The bill was introduced at the request of the Revenue Department to give the Commissioner more discretion on certain corporate tax returns. Several organizations, including GBA, had some serious concerns with the original version of the bill, and we appreciate Chairman O’Neal addressing these concerns prior to the bill passing the House. The Senate Finance Committee met this week and reported the bill to the Rules Committee for further action.
Rep. O'Neal
Trust Flexible Income Bill Reported
H.B. 406 has been reported out of the Senate Finance Committee chaired by Sen. Casey Cagle (R-Gainesville). The bill, authored by Representatives Wendell Willard (R-Atlanta) and Mary Margaret Oliver (D-Decatur), was requested by the Fiduciary Law Section of the State Bar of Georgia and is designed to modernize Georgia law dealing with the sometimes conflicting interests trustees encounter in investing trust assets. The bill gives trustees the ability to invest in more flexible ways. Our thanks to Senator Cagle for his assistance in getting the bill out of committee. Click here for the executive summary prepared by the State Bar.
 Sen. Cagle |
 Rep. Willard |
 Rep. Oliver |
Title Pawn Bill Heard in Committee
House Banks and Banking Committee Chairman James Mills (R-Gainesville) called a meeting of the committee this week to accommodate a request by Rep. Mary Margaret Oliver (D-Decatur) to hear testimony on her legislation, H.B. 675. The bill totally rewrites the title pawn provisions in the code to, among other things, prohibit the lease back of pawned vehicles to the owner and restricts the interest rate on the pawn. After an initial exchange of comments between Rep. Oliver and the Chairman about not having held the hearing in time for the bill to be passed this year, Rep. Oliver told the committee of her 8-year effort to regulate the title pawn industry and why she felt it was important to take action. A representative from Georgia Watch, a consumer advocacy group, also testified in support of the bill. Chairman Mills appointed a subcommittee to meet between the 2005 and 2006 sessions and make a recommendation to the full committee.
Rep. Mills
H.B. 808, The Georgia Predatory Lending Prevention Act, has been introduced by Representatives Mangham, Fludd, Watson, Stephenson, Sinkfield and Mosby. The bill rewrites some of the language from the Georgia Fair Lending Act to create new requirements for lenders making mostly “high-cost” mortgage loans. Other loans would also be impacted by the bill. No action is expected this year.
Foreclosure Redemption Introduced
H.B. 741 has been introduced by Representatives Mangham, Stephenson, Fludd, Sinkfield and Benfield. The bill provides certain statutory rights of redemption to a borrower on a mortgage loan which has been sold. The borrower would have 90 days following the sale to redeem the property after paying the full mortgage, any interest and fees due plus a penalty based on who bought the mortgage at foreclosure. If the mortgaged property was bought at foreclosure by the lender, a penalty of 12 percent would be assessed upon redemption. If the property was bought by a third party, the mortgage redemption penalty would be 20 percent. Some states have a redemption process in their foreclosure statutes but most are of much shorter duration, such as 30 days found in the North Carolina code. The bill is not expected to receive any action this year.
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 and is sent on Fridays during the session. On Fridays when the Update is not mailed, it will be sent electronically to those who have provided us with their email addresses. 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 is 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 2005 State Issues link on GBA’s website for up-to-the-minute status of bills being followed this session.
Joe
Brannen, Direct phone, (404) 420-2026
Elizabeth
Chandler, Direct phone, (404) 420-2027
Don Browne,
Direct phone,
(404) 522-1501