Legislative Update

March 5, 2004          A review of current developments from the Georgia Bankers Association

www.gabankers.com
Payday Lending Bill on Governor's Desk

This week, both the House and Senate overwhelmingly passed the conference committee report on S.B. 157, the bill that requires payday loan companies to be licensed under the Georgia Industrial Loan Act.  The only difference between the Conference Committee’s version and the version of the bill the House rejected last week was a new effective date of May 1, 2004.  Several members felt it was necessary to give the payday lenders time to file applications or decide to orderly cease doing business and the May 1 date was agreed upon as enough time.  Governor Sonny Perdue is expected to sign the legislation, but probably not until after the General Assembly adjourns.  The bill contains GBA-supported language which was intended to clarify that banks are not covered by the Act.


Gov. Perdue

Gift Cards

S.B. 443 by Senators Adleman and Seabaugh would prohibit the imposition of a nonuse, handling, dormancy, or maintenance fee on gift cards and gift certificates issued by merchants or persons acting on behalf of merchants.  The way the bill was drafted, gift cards issued by banks would be covered by the bill.  GBA’s Elizabeth Chandler testified against the current version of the bill this week and our thanks to Senate Agriculture and Consumer Affairs Chairman, John Bulloch (R- Ochlocknee) for holding the bill until next week in an effort to address our concerns.  We have put a brief white paper on the GBA website about the possible negative impacts of the bill and will continue meeting with the author.


Sen. Bulloch

Living (Minimum) Wage SB 495 by Senators Starr, Johnson and Balfour, passed the Senate Insurance and Labor Committee this week. The legislation is designed to prevent a local government from forcing businesses it does business with to raise their minimum wage above what federal and state laws require.  The bill is comparable to H.B. 1258 by Representatives Ehrhart, Watson, Post, Sailor and Bannister which we have mentioned in previous Updates.  An ordinance is pending before the City of Atlanta City Council that specifies a minimum salary for anyone working with City contractors.  The GBA has opposed that ordinance and supports these two bills which would preempt these local ordinances.  Both bills have now been reported out of the committees to which they were originally assigned and are pending in the house and senate Rules Committees.


Sen. Starr

Payday Regulatory Bill Introduced H.B. 1713 was introduced this week by Representatives Roberts, Williams, Ehrhart, Brooks, Massey and others.  The bill would create a regulatory scheme for payday lenders under the supervision of the Department of Banking and Finance.  This version of a payday loan bill has been floating around the Capitol for several years.  The advocates for its passage feel payday lenders will be unable to get licenses as GILA lenders and wanted to provide a different regulatory structure.  The GBA’s original involvement in the payday loan issue came about when this version of the bill was first discussed.  Our concern is that the Department may not be able to get sufficient funds appropriated from the General Assembly to supervise the payday lenders, and would therefore have to use bank-paid fees for their supervision.  It is doubtful this legislation will be given serious consideration this year.


Rep. Roberts
Hearing Slated for Mortgage Originator Licensing Bill A hearing has been scheduled for next Tuesday by a House Banks and Banking Subcommittee to consider H.B. 1385.  The bill was introduced by Committee Secretary, Representative Virgil Fludd along with Representatives Sailor, Ehrhart, Sinkfield and Stoner.  The bill creates a licensing scheme for mortgage loan originators within the Department of Banking and Finance.  Bank loan officers would be exempted from the licensing requirements. 


Rep. Fludd
Legislature Focuses on Budget The General Assembly will be in session only two days next week to allow members to focus on finalizing the 2005 budget.  Revenue projections continue to force budget cuts.
Credit Reporting Bill Pending before Rules Committee GBA staff has continued to meet with Rep. Jill Chambers (R-Atlanta) to discuss her concerns with identity fraud and ways to curb the crime.  Rep. Chambers introduced H.B. 656 earlier this session and has been working with lenders and credit reporting agencies in an attempt to reach a compromise on legislative language.  GBA’s Elizabeth Chandler testified before the House Governmental Affairs Committee expressing concern that the bill is redundant with the federal FACT act.  The bill has been amended and is pending before the House Rules Committee.
Housekeeping Bill Reported to Rules Committee S.B. 405 is the annual housekeeping bill introduced at the request of the Georgia Department of Banking and Finance.  The only provision of significant interest to banks deals with dropping the requirement for prior approval for third party service contracts.  Other provisions apply to other DBF regulated entities:  credit unions, money transmitters, mortgage lenders and brokers.  The Department has prepared a summary of the bill.  The House Banking Committee reported the bill out this week.

Deposit Account Fraud H.B. 1301 by Representatives Moraitakis, Dodson and Oliver removes the requirement that a “present consideration” be present when an individual gives a check the individual knows to be fraudulent.  The bill should help prosecutors with cases of individuals giving fraudulent checks for debts incurred at an earlier time.  GBA monitoring.

Predatory Lending H.B. 1171 by Representatives Holmes, Bruce, Sinkfield, Stanley-Turner, Mobley and others amends the Georgia Fair Lending Act to return it to the version passed in 2002.  Back would be covered loans, the old definition of flipping, and the assignee liability language that caused the rating agencies to shut down the mortgage market in Georgia; and gone would be the parity language that allowed state-chartered banks to be exempted from the Act.  GBA opposes.

Lien on Abandoned Vehicles S.B. 404 by Senators Cheeks, Brush and Hall creates a new type of lien on abandoned vehicles to include the cost of an environmental cleanup created by the vehicle.  The bill has passed the Senate and is pending in the House Judiciary Committee.  Sen. Don Cheeks (R-Augusta) told his fellow senators the bill was introduced to correct a problem a constituent had encountered in recouping significant costs in cleaning up a spill contamination at his lot.

Bankruptcy Exemptions

 H.B. 1436 by Representatives Mosby, Royal, Bruce, Stephenson, Dodson and others increases the bankruptcy exemption on residences from $10,000 to $25,000 ($20,000 to $50,000 if jointly owned) and raises an exemption for a burial plot from to $10,000 to $20,000 if jointly owned.  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 sent on alternate Fridays except when the legislature is in recess.  On Fridays that the Update is not sent, 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 Lobbyists

GBA will again be 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 2004 State Issues link on GBA’s website for up-to-the-minute news from the session.

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 2004 session of the Georgia General Assembly.  Let GBA's Lydia Thomas know of others you would like to add to our distribution list.

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