March 28, 2008
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| The GBA has been working with the Georgia Bar Foundation to clarify the kinds of instruments that may be accepted by closing attorneys as "good" or collected funds in real estate transactions. We have previously reported our success in negotiating the retention of federally-insured financial institution-issued cashier's checks and lawyer trust fund checks as the two instruments that will be allowed. In reviewing the current good funds statute, a provision was noticed that could be in conflict with the Federal Truth in Lending Act/Reg Z. The provision in the current law requires loans to be settled on the day of closing. The provision does not provide an exception for loans that have a right of rescission. Language was added to the bill, S.B. 355, by Rep. Larry O'Neal (R-Warner Robbins) to clarify that these loans would be disbursed after the rescission period had expired since Reg Z prohibits the disbursal of the proceeds to the borrower until then. In a surprise letter to the entire membership of the General Assembly, former Governor Roy Barnes wrote that this provision is "very anti-consumer and will, in my opinion, add to the mortgage chaos which has engulfed our nation." Governor Barnes' letter went on to discuss |
 his
original version of the Georgia Fair Lending Act and took
exception to it being amended. "The worldwide credit
crunch is witness to the lack of consumer protection afforded
consumers...SB 355...has the same potential to further put at
risk the citizens of Georgia and the closing attorneys who close
the loans," his letter said. With regard to loans with
rescission rights, Governor Barnes letter also stated flatly
that lenders were charging interest to borrowers on the date the
loan was made and not funding the lawyers escrow accounts.
In a random survey of our members, we found the overwhelming
industry practice is to not charge interest until the rescission
period has ended. His letter is drawing significant
interest in the Legislature and we will continue to make every
effort to correct the information as it pertains to our members.
Our concern is if the language in the current statute is not
amended, lenders will be forced to fund loans with rescission
rights on the day the loan is closed. |
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| After marathon negotiating sessions between lenders and consumer advocacy groups, the House Judiciary Committee has agreed on language to change certain provisions in the Georgia foreclosure statutes. The committee merged the concepts in two Senate-passed bills which had been sponsored by Sen. Bill Hamrick, Chairman of the Senate Banking and Financial Institutions Committee. The bill they reported is using the bill number of one of his bills, S.B. 531, and makes three significant changes to the statute. First, the current 15-day notice of foreclosure sale is extended to a 30-day notice. The second change requires the security instrument or the assignment to be filed with the clerk of superior court prior to the sale. |
And the third major change requires the notice to
"include the
name, address, and telephone number of the individual or entity
who shall have full authority to negotiate, amend, and modify
all terms of the mortgage with the debtor." Language was
also included clearly stating that the lender was not required
to amend or modify the terms of the loan. The bill was
reported unanimously and is expected to be before the full House
next week. The Senate must agree to the bill before it can
go to the Governor. |
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 Investment
Bill Reported |
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The House Judiciary Committee has reported the Uniform Securities Act, S.B.
358. Senate Banking and Financial Institutions Committee
Chairman Bill Hamrick, (R-Carrollton) sponsored the bill
at the request of Secretary of State, Karen Handel.
The bill was amended at GBA's request to add most of the bank
exemptions contained in the Gramm Leach Bliley Act.
Our thanks to Subcommittee chairman
Steve Tumlin for his help. |
 GBA
has been following H.B. 972 by Rep. Steve Tumlin
(R-Marietta) and others. The legislation would adopt the
"Uniform Prudent Management of Institutional Funds Act" which
provides standards for charities to use in managing investments
and spending from endowments and other rules regarding the
management of institutional funds. The Senate Banking and
Financial Institutions Committee has voted to report the
bill to the full Senate. |
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Legislature
in Final Days |
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 The
Senate Judiciary Committee has reported legislation sponsored at
GBA's request by Judiciary Committee Chairman Wendell Willard
(R-Sandy Springs) dealing with mortgage satisfactions. The
bill, H.B. 1093, clarifies the notification provisions
for liquidated damages resulting from the failure to cancel a
security deed within the current 60 day period. The bill
addresses the underlying problems we are resolving which have
resulted in nine class action law suits. |
The Georgia General Assembly is expected to complete their work for this year next Friday, April 4. In resolutions passed in both the House and Senate, they have agreed to be in session for their final four days next week on Monday, Wednesday, Thursday and Friday. Much work remains to be done on many issues, so the days will be filled with activity. We will produce a wrap-up edition of the Legislative Update containing comprehensive information about all the legislation we have been monitoring this session. The 2008 session has had more banking-related bills than any in recent memory. The Legislature has been attuned to our concerns and have been open to our suggestions as bills have progressed. | |
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Contact GBA Staff Lobbyists With Questions |
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GBA's three lobbyists will be onsite at the Capitol all session to be available to legislators and staff as questions arise about the various bills that may affect the banking industry. If you have questions about any legislation pending, please call on these professionals for their help. Also, GBA's State Issues Page of our website will be updated daily during the session. |
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Georgia Bankers Association • 50 Hurt Plaza, Suite 1050, Atlanta, GA 30303 • Phone 404.522.1501 • Fax 404.522.9848 • www.gabankers.com |
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