January 27, 2012

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Georgia Capitol Positive News for CUs: Garnishment Notice Response Bill Clears State House
The state House passes a bill that would allow someone other than an attorney to answer a garnishment notice. If it becomes law, it will be good news for credit unions, as it should reduce the cost of doing business.

  Grassroots Academy
Largest group yet attends GCUA's annual Grassroots Academy to learn more about the legislative process, meet state leaders, and discuss issues facing credit unions.

  State Legislature Continues at Full Force
After a week's break for budget hearings, the Georgia Legislature resumes its fast-paced session, considering several topics relevant to the credit union industry.

  CUNA Representative to Testify on Exam Relief Bill
The CEO of the West Virginia CU League plans to testify on behalf of CUNA at a U.S. House committee hearing on financial institution examination fairness.

  State of the Union Address
In his State of the Union address, President Obama calls for an investigation of the packaging of risky mortgages into Wall Street securities, and asks for funds to help people refinance their mortgages at lower interest rates.

  CFPB to Establish CU Council to Gauge Regulatory Impact
The Consumer Financial Protection Bureau (CFPB) will establish an advisory council for credit unions to help the agency gauge how its actions are impacting the credit union industry.

  GA CU Friend Bierecki Named to European Council
Grzegorz Bierecki, president/CEO of Poland's credit union trade association and a longtime friend of the Georgia credit union industry, has been named to the Parliamentary Assembly of the Council of Europe (PACE).

  Deceptive Foreclosure Practice Settlement Reached
The nation's five largest mortgage lenders have agreed to overhaul their industry after deceptive foreclosure practices drove homeowners out of their homes, government officials said.

  Georgia with 12 of Nation's Top 100 Hardest-hit Foreclosure Neighborhoods
RealtyTrac lists the top 100 U.S. Zip codes for foreclosures, and 12 of them are in Georgia. One neighborhood in Atlanta is on the list, according to CNNMoney.

  GCUA Annual Convention: Helping People Afford Life
Helping People Afford Life is the theme of this year's GCUA Annual Convention, set for May 9-12 in Savannah. The event promises to be a valuable experience for credit union volunteers, professionals and staff.

  Odd Defense for Bank Robbery
The lawyer for the defendant in an Augusta bank robbery says his client was a victim of "involuntary intoxication," but the prosecutor isn't buying what he calls "this charade."

Positive News for CUs: Garnishment Notice Response Bill Clears State House

State Rep. Wendell Willard
On Tuesday, January 24th, the state House passed the Garnishment Notice Response Bill HB 683 by Representative Wendell Willard (R-Sandy Springs) with a vote of 150-20. Credit unions and the Government Influence Team have been urging the state Legislature to move this bill forward quickly as it would reduce the cost of doing business, as a result of a 2011 Georgia Supreme Court ruling that requires garnishment answers to be done by an attorney.

The bill now moves forward to the Senate for consideration, and if passed would benefit credit unions and other businesses. This legislation seeks to allow organizations to answer garnishment notices without going through an attorney. With perfect timing, HB 683 was on the House floor on the same day as the Grassroots Academy (see below related article), providing the ideal opportunity for credit union advocates to reach out to their state representatives to thank them for their quick passage of the bill, and ask their state senators for their support of the legislation. The Government Influence Team continues to speak with legislators on HB 683 as it would have a direct positive impact for all credit unions.
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Grassroots Academy 2012
Grassroots Academy

On January 24th, the largest Grassroots Academy to date was held when more than 60 credit union advocates convened across from the Gold Dome to enhance their knowledge of Georgia’s legislative process and leaders, and the issues facing credit unions. Participants learned about the inner workings of the Senate and how to shape legislation successfully from Secretary of the Senate Bob Ewing, saw what it takes to run a successful campaign and how credit unions can play a part from political strategist Chip Lake, gleaned what the Department of Banking and Finance is seeking in legislative changes this session from Commissioner Rob Braswell, got personal insight from Vice Chairman of the Banking Committee Michael Harden (R-Toccoa), and learned firsthand how other credit unions are holistically engaged in grassroots activities. Credit union advocates closed out the packed day with visits to their state senators’ and state representatives’ offices to urge their support of the Garnishment Notice Response Bill (HB 683) and the Foreclosed Property Registry Bill (HB 110).

Want to learn more about the bills that are being considered by the state that could impact your credit union and the members you serve? The credit union legislative tracking system outlines all of the bills that are being monitored on behalf of credit unions. For up-to-the-minute movement of key issues, please follow us on Twitter @GCUAGov!
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State Legislature Continues at Full Force

Georgia House ChamberThe state Legislature returned the week of January 23rd after being on recess the previous week for budget hearings, and has resumed with the atypical fast pace from the first week. Activity of credit union interest was prominent with the passage of the Garnishment Notice Response Bill HB 683 in the House (see above related article), as well as several other bills of industry note:
  • Attorney General’s Robo-Signing Foreclosure Bill HB 237 by Rep. Rich Golick (R-Smyrna) was heard in the Senate Judiciary Committee on Monday, January 23rd. This legislation would provide the AG’s office the subpoena powers over foreclosure documents, and retains a safe harbor provision for innocent mistakes. This bill stalled toward the end of the 2011 session when some concern was raised by legislators on granting additional subpoena powers (a common lightning-rod topic regardless), and AG Sam Olens and his staff have shared with the Government Influence Team that they have been meeting with key Senate leadership during the off session to garner support for the bill. It is expected that the bill will have another hearing for a possible vote soon.
  • Condo Association Lien Bill SB 136 by Sen. Bill Hamrick (R-Carrollton) was another issue from 2011 that was addressed in the Senate Judiciary Committee on January 23rd. Last year this bill sought (among other things) to provide 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. After concern was raised by the Government Influence Team and others, Sen. Hamrick removed the provisions from the bill but did not move it forward in 2011. The bill that was heard and passed in committee this year was void of any mention of liens. However, the Government Influence Team has received word from the condo-association industry lobbyists that they would like to add language back into the bill without superseding the mortgage holder’s lien priority status. With all bills, this situation is fluid and will be monitored closely.
  • Foreclosure Registry Bill (HB 110) by Rep. Mike Jacobs (R-Atlanta) continues to be a priority with the Government Influence Team. This bill has been narrowly focused to address only foreclosed properties, and seeks to set uniform standards on how cities and counties could design foreclosure registries. The bill also contains an exemption for financial institutions as an owner through foreclosure from registering and paying any associated registry filing fees, provided they file the deed within 60 days with the required contact information sent to the city and/or county.

    Readers will recall from the last edition of Creating Influence that the bill passed the Senate Banking Committee the first week of the session, but Senate leadership decided more time is needed to secure additional support for the measure. Much (if not all) of the debate amongst legislators on this bill has been on the definition of abandoned property and limits of those registries (as opposed to the foreclosure section of the bill), as well as a broader debate by some of the actual concept of a registry. More work continues, stay tuned!
  • Cosigner Notification Bill HB 245 by Rep. Rusty Kidd (I-Milledgeville) was heard in a House Judicial Non-Civil Sub Committee meeting on Wednesday, January 25th. This legislation would require the notification of a co-signer whenever a loan was in default to the last known address, without penalties, nor impact on the debt obligation. This bill changed drastically from what was being sought last session, and after our concerns and others were raised it was modified with these changes and passed out of subcommittee. It will continue to be worked throughout the process to protect credit union interests.
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CUNA Representative to Testify on Exam Relief Bill

On February 1st, Ken Watts, CEO of the West Virginia Credit Union League, will testify on behalf of CUNA during a hearing before the U.S. House Financial Institution and Consumer Credit Subcommittee on H.R. 3461, the Financial Institution Examination Fairness and Reform Act. This legislation, introduced November 17, 2011 by House Financial Institution and Consumer Credit Subcommittee Chairman Shelley Moore Capito (R-WV) and Ranking Member Carolyn Maloney (D-NY), seeks to:
  • Ensure that financial institutions receive timely examination reports (within 60 days of exams completion)
  • Make available to financial institutions the information used to make decisions in their examination
  • Codify certain examination policy guidance
  • Establish an ombudsman at the Federal Financial Institution Examination Council (FFIEC) to which financial institutions could raise concerns with respect to their examination
  • Establish an appeals process before an independent administrative law judge

Although no single piece of legislation could deal with the wide range of concerns credit union executives have about the current supervisory environment, this bill takes a major step toward a more balanced and transparent approach regarding how, and on what basis, decisions are made by the regulatory agencies in the examination process. The legislation has 81 co-sponsors in the House, including Reps. David Scott (D-13) and Lynn Westmoreland (R-3) from Georgia. No companion bill has been introduced in the Senate.

On January 18th, CUNA wrote to the co-sponsors a letter of support of the legislation, stating that credit unions view the bill, “as a firm step in the right direction toward ensuring the federal financial institution regulatory agencies (regulators) conduct fair exams which are consistent with the law and regulation and ensure safety and soundness.” In addition CUNA noted several enhancements that our industry hoped the sponsors would consider as the bill moves through the legislative process. To read the letter click here.

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ObamaState of the Union Address

On Tuesday, January 24th, President Barack Obama addressed Congress and the nation in his third State of the Union address. Of note to credit unions was the mention of fresh investigations into the mortgage crisis. The President said he would direct the Justice Department to launch a special unit of state attorneys general and federal prosecutors to investigate the packaging of risky mortgages into securities that were bundled and sold by Wall Street. President Obama also asked Congress to provide funding to people who have kept up their mortgage payments so that they can refinance at lower interest rates, funded by fees levied on banks. Please click here for The Wall Street Journal's overview of the address, and here for The Washington Post’s overview.
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CFPB to Establish CU Council to Gauge Regulatory Impact

The Consumer Financial Protection Bureau (CFPB) will establish an advisory council for credit unions to help the agency gauge how its actions are impacting the credit union industry, CFPB Director Richard Cordray said during the January 24th House Oversight and Government Reform subcommittee hearing.

Magnifying glassCordray noted that he created similar advisory councils for credit unions and community banks during his time as Treasurer of Ohio, and said those advisory groups improved his agency's work. He noted that credit union interests are "often aligned with those of consumers," and said that this type of business model, which emphasizes helping consumers, is the type of business model that the CFPB wants to encourage in the larger financial marketplace. In his testimony he added that the agency would bring NCUA and other financial agencies in to meet with the CFPB in the coming year to coordinate supervisory schedules, guidance, and regulations, and discuss areas where their jurisdiction can overlap or where duplication can be minimized.

Cordray said his agency aims "to make consumer financial markets operate fairly in order to protect consumers, support honest businesses, and play a crucial role in helping to safeguard the overall economy" under his leadership. Leveling the playing field is important for credit unions and community banks, and for making the financial system itself work, Cordray added. Overall, Cordray said the CFPB's intention is to "be mindful" of the differences between larger institutions and smaller institutions.
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GA CU Friend Bierecki Named to European Council

Georgia credit union loyalists will be happy to know that Grzegorz Bierecki, president/CEO of Poland's credit union trade association, the National Association of Cooperative Savings & Credit Unions (NACSCU), and a World Council of Credit Unions (WOCCU) member, was named to the Parliamentary Assembly of the Council of Europe (PACE). The council is Europe's oldest international parliamentary group and precursor to the European Union. As one of the council's two statutory organs, PACE investigates, recommends and advises European policy development.
Bierecki, Mercer
From left: Brian Branch, president of WOCCU; Grzegorz Bierecki, newly appointed member of the Parliamentary Assembly of the Council of Europe; GCUA President/CEO Mike Mercer

Bierecki, who serves as WOCCU's first vice chair, was elected senator in Poland's parliament last year. It is Bierecki's first election to public office. "The appointment to the Parliamentary Assembly of the Council of Europe could not come in a more timely fashion," Bierecki said. "While the financial markets still are in turmoil and the world has not yet recovered from the deep crisis, more challenges are ahead for credit unions. There has to be a non-banking voice present in the European forum adding the human dimension to finance."
Bierecki was a former staff member of Lech Wałęsa's Solidarity party, which helped reestablish Poland's credit union movement in partnership with WOCCU in 1989 and has had an active partnership with the credit union movement here in Georgia. Through Bierecki’s leadership and the sharing of information between the Georgia credit union leaders and Poland’s credit union system, the Polish movement has since grown to one of the world's most successful systems. Poland's 59 credit unions, operating under a unified marketing brand from a central back-office platform, support 1,852 branches and serve 2.2 million members nationwide. To help celebrate the 20th anniversary of Poland's credit unions, the World Council will hold its 2012 World Credit Union Conference, July 15-18, in Gdańsk, Poland.
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Deceptive Foreclosure Practice Settlement Reached

Mortgage applicationIt was reported on January 23rd that the nation's five largest mortgage lenders have agreed to overhaul their industry after deceptive foreclosure practices drove homeowners out of their homes, according to government officials. Five major banks – Bank of America, JPMorgan Chase, Wells Fargo, Citibank and Ally Financial – and U.S. state attorneys general could adopt the agreement within weeks, according to two officials briefed on the discussions.

What does this mean for consumers? Those who lost their homes to foreclosure are unlikely to get their homes back or benefit much financially from the settlement, which could be as high as $25 billion. About 750,000 Americans, which is about half of the households who might be eligible for assistance under the deal, will likely receive checks for about $1,800. What does this mean for credit unions? While this is a settlement regarding the above banks, their agreement could reshape longstanding mortgage lending guidelines and make it easier for those at risk of foreclosure to restructure their loans. Estimates believe that roughly one million homeowners could see the size of their mortgages reduced.
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Georgia with 12 of Nation's Top 100 Hardest-hit Foreclosure Neighborhoods

House for saleThe housing collapse has dramatically changed the nation's foreclosure landscape. Neighborhoods boasting modern homes, cul-de-sacs and tree-lined streets in Western cities now dominate the list of the top 100 U.S. Zip codes hit hardest by foreclosures, and claim all of the top 10 spots, according to data generated for CNNMoney by RealtyTrac. In 2011, Western states claimed 82 of the 100 worst-hit Zip codes, with 38 in California and another 28 in Nevada. In our region: The South claimed the second highest number of hardest hit Zips with 14. Georgia claimed 12 of those neighborhoods alone, including one in Atlanta that took 10th place. An interesting point from the data is that not a single Northeastern Zip code made RealtyTrac's top 100 list.
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Annual Convention 2012GCUA Annual Convention: Helping People Afford Life

For decades credit unions have been helping people afford life at every stage – from getting married and having kids, to buying a home or car, and even financing college. Helping People Afford Life is what the 2012 GCUA Annual Convention is all about. Plan to attend one of the year’s most outstanding events, May 9-12 at the Savannah International Trade and Convention Center in beautiful Savannah.

Networking, education and industry insight. That's just the tip of the iceberg of what you can expect at the GCUA Annual Convention. Join your peers and discover new ways credit unions are providing affordable financial services to consumers. Network and brainstorm with other credit union professionals, and learn about the latest products and services in the marketplace to help people afford life.

There’s something for everyone at your credit union – professionals, volunteers and staff – including:
  • Professional Development
  • Board Financial Literacy Training
  • Affiliates Annual Meetings
  • Annual REAL Deal Reunion
  • Georgia Credit Union Marketing Council Spring Conference
  • Exhibitor Interaction
  • Leisure Activities: Golf, Receptions and Companion Program

Registration and room reservations open on February 1st, so look for more details coming soon.

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Not my faultOdd Defense for Bank Robbery

On January 24th the Atlanta Business Chronicle reported that a Georgia lawyer for a man accused of robbing an Augusta branch of Bank of America  says his client was a victim of “involuntary intoxication” at the time due to the Paxil antidepressant he was taking. Assistant District Attorney Hank Syms isn’t buying lawyer Peter Johnson’s claims, and “waved away any claim” of such intoxication when the robbery occurred in July 2010. Syms said about one-third of clients who make guilty pleas say they are affected by some form of medication, but added he’s never heard the Paxil defense because most lawyers know better than to claim it. “What we have with this charade about ‘Paxil made him do it’ is the opposite of taking responsibility,” Syms said.
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