MARCH 7, 2014
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Statewide News Coverage
U.S. Capitol CUs Out in Force in D.C. on the Heels of Tax Reform Proposal (Issue 1 of 5)
A record number of attendees converged on Washington, D.C., for CUNA's annual Governmental Affairs Conference, which was highlighted by the release of a credit union-friendly proposal for federal tax reform.

  U.S. House Passes Flood Insurance Bill (Issue 2 of 5)
The U.S. House passed a bill that would delay planned increases in National Flood Insurance Program premiums to address affordability concerns. The bill now must be reconciled with a similar measure passed earlier by the Senate.

  Bill to Provide Consistency with Overdraft Fees
Passes State Senate (Issue 3 of 5)

The Georgia Senate passed a credit union-supported bill asserting that overdraft fees are not considered interest and thus are not subject to the state's usury laws, but the bill still has a long way to go before becoming law.

  State Legislature: Six Legislative Days Remaining (Issue 4 of 5)
Only six legislative days remain in the General Assembly's 40-day session, ensuring a frantic pace as lawmakers take on such issues as foreclosure, electronic benefits cards, mortgage licensing and more.

  Election Season’s Official Kickoff (Issue 5 of 5)
Qualifying for the May 20 primary election took place this week, resulting in multiple campaign announcements as incumbents revealed their plans to run for re-election and newcomers declared their intent to seek office.

U.S. CapitolCUs Out in Force in D.C. on the Heels of Tax Reform Proposal
(Issue 1 of 5)

This year, the CUNA Governmental Affairs Conference had a record high 4,400 plus attendees including over 100 from Georgia! The mass of credit union individuals gathered in Washington to discuss (and take action on) key issues including:

  • NCUA’s proposed rule on risk-based capital,
  • data security issues (including the Target breach),
  • regulatory relief measures to help credit unions pending in Congress,
  • housing finance reform, and
  • the preservation of the credit union tax exemption.

The big reward for all credit unions (especially those at the GAC) was the February 26th official unveiling by Chairman Dave Camp of the House Ways and Means Committee of his anticipated tax reform plan - a plan that would make no changes to the credit union tax exempt status. When first released, there was initial concern that even though the corporate income tax exemption was preserved, federal credit unions could possibly be subject to unrelated business income tax (UBIT). However, that concern was addressed during a call arranged by CUNA with the staff from the Ways and Means Committee, who said it was never their intention to impose any additional taxes on federal credit unions. Further, committee staff shared that anything that would impose taxes on credit unions – including UBIT – was unintentional. That same message was confirmed during the Georgia participants’ meeting with staff from the office of Rep. Tom Price (R-6) – they also had heard of the concerns of credit unions and reached out to make sure that the draft would not put any additional tax on credit unions. GCUA appreciates Rep. John Lewis (D-5) and Rep. Price, the two Ways and Means Committee members from Georgia, for their support during the committee meetings to discuss the draft report.

Don't Tax My CUThe positive outcome with the tax reform draft came after months of challenging, unrelenting work by credit unions and the CUNA-League system urging Congress to “Don’t Tax My CU.” These efforts helped make a difference, and the “Don’t Tax My CU Tuesday” social media efforts on February 25th put this message in front of almost 5.3 million Twitter and Facebook followers on the eve of the above tax code reform discussion draft. And credit unions and trade press aren’t the only ones calling this a win for the industry; Politico highlighted credit unions as one of the “winners” in a list of who gained and lost in the reform proposal. The news for credit unions was especially noteworthy when so many other entities could face major “hits” under the proposal, such as a new tax on financial firms with assets greater than $500 billion labeled by U.S. regulators as “systemically important” to the stability of the broader economy. If passed into law, this would require these firms pay a quarterly excise tax equal to 0.035% of their total consolidated assets that exceed the $500 billion threshold.

At the GAC, credit union representatives were out in force on February 26th and 27th on Capitol Hill hitting on all the major talking points: taxation, member business lending, housing finance reform, data security and credit union charter enhancements. This annual event is a valuable touch point for meeting face-to-face with lawmakers, and Bobby Michael, CEO of CORE CU, was highlighted in CUNA’s News Now stating that he was most focused on just getting the credit union message out to legislators. "If you repeat it enough times it sinks in," he said. That sentiment seemed to hold true as all the Georgia participants felt this year’s visits were some of the best yet. The legislators seemed in-tune with credit union issues and focused on the message. A special thank you to all of the 30 credit unions who traveled to D.C. to speak on the issues vital for all Georgia credit unions.
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Flood insuranceU.S. House Passes Flood Insurance Bill (Issue 2 of 5)

On March 4th the U.S. House of Representatives passed the Homeowner Flood Insurance Affordability Act (H.R. 3370) by a 306-91 vote. The Georgia delegation had seven voting for the measure (all the GA House Democrats plus Reps. Jack Kingston (R-1) and Rob Woodall (R-7)) and seven in opposition (the rest of the GA Republican contingent).

The bill in part would delay planned increases in National Flood Insurance Program premiums until the Federal Emergency Management Agency puts in place a plan to ensure they are implemented affordably. In January, the Senate passed similar legislation, the Homeowner Flood Insurance Affordability Act (S. 1926), with the same kind of bipartisan support as the House bill. The House and Senate bills must now be reconciled before they can be sent to the President and signed into law.

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Bill to Provide Consistency with Overdraft Fees Passes State Senate (Issue 3 of 5)
Rep. Richard Smith
State Rep.
Richard Smith

On Thursday, March 6th the Georgia Senate passed HB 824 by Rep. Richard Smith (R-Columbus) which will bring consistency for state-chartered financial institutions. This bill has been lobbied heavily by GCUA to help move it through the legislative process, as it will protect credit unions. The legislation will bring consistency and clarity to overdraft programs at state-chartered credit unions and banks, and asserts that overdraft fees are not subject to usury laws and are not considered interest. This has been sought as there have been legal challenges on overdraft, as well as a challenge to the constitutionality of the July 2013 Bank Overdraft Fee Declaratory Order issued by the Georgia Department of Banking and Finance. This bill had garnered some opposition in the Senate committee hearings, and there are lobbying interests that would like to see the bill stopped. As such, lobbying efforts to support this legislation continue.

Next steps:

  • The bill must return to the House as it was amended in the Senate process, where
  • it will be eligible for an “agree/disagree” procedural vote.
  • If the vote to agree is successful, it then travels to the Governor for his consideration.
  • If there is a move to disagree, then the bill is sent to a conference committee composed of a handful of legislators that can amend it however they see fit behind closed doors, and
  • then it would go back to both the House and Senate for a full vote.

 With so many opportunities to alter or derail a bill (and time being of the essence), GCUA continues to educate legislators on the importance of passing this legislation, which clearly states that overdraft fees imposed by state-chartered institutions in connection with deposit accounts are not subject to Georgia's usury laws. Note: The Atlanta Journal-Constitution’s bill resource assigns an educated guess on the likelihood of a bill’s passage.AJC: 53%

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Georgia CapitolState Legislature: Six Legislative Days Remaining (Issue 4 of 5)

As of press time, the state Legislature is on the 34th day of the 40-day session. With six (six!) days remaining and the majority of issues still active in the fluid process, it’s a hectic pace with legislators working to move their issues forward. And, as qualifying (see article below) was held on the floor below the House and Senate chambers this week, it created an even greater frantic undercurrent with legislators as their competition was literally downstairs kicking off their respective campaigns. The House alone voted on more than 50 bills on Monday, March 3rd until around 11:00 pm that evening! From a credit union perspective, there was no shortage of activity this week on bills of interest, in addition to the overdraft legislation above:

  • Foreclosures: On Tuesday, March 4th Rep. Paulette Braddock (R-Powder Springs) introduced HR 1643, which would create a House Study Committee to review and reform the foreclosure process in Georgia. This bill was debated in the March 6th House Banks and Banking Committee hearing, but no action was taken. AJC: no % assigned
  • EBT Cards: HB 138 by Rep. Andy Welch (R-McDonough) passed the full House on Monday, March 3rd with bipartisan support to rein in the misuse of state-issued EBT (electronic benefits) cards, placing restrictions and limits on how they can be used. Previous restrictions put undue burdens on financial institutions, with ATMs policing the access. It has been amended several times this session, and now holds an ATM notice provision for any establishment that sells certain items prohibited from purchase with cash assistance, including gift cards. GCUA continues to address concerns on the bill. AJC: 40%
  • Auctioneers: GCUA continues to work on a potential issue in HB 1042 by Rep. Katie Dempsey (R-Rome), which seeks to amend the auctioneer title of law. How the bill defines an auction could inadvertently include any sale by a bid process (such as the sale of repossessed autos, foreclosure sales, etc). GCUA is working with Rep. Dempsey on the concerns that the bill might draw credit unions and other financial institutions into the licensing requirements, and this issue is being studied further for potential impact. AJC: 37%
  • Preventing “Squatters”: HB 985 by Rep. Tom Kirby (R-Loganville), which seeks to prevent squatters from moving into foreclosed homes, was addressed in the Senate Judiciary Noncivil committee on Wednesday, March 5th and now travels to Senate Rules for consideration. This bill seeks to prevent the filing of false liens or any instrument relating to real property/title that clouds law enforcement’s ability to evict trespassers and protect the real property owner’s interest. AJC: 41%
  • Mortgage Licensing Exemption: The full House passed HB 750 by Rep. Spencer Frye (D-Athens) on March 3rd, and it was then addressed days later in the Senate Banking and Financial Institutions Committee on March 6th. This bill seeks to add Habitat for Humanity to those entities (which include credit unions) exempted from mortgage licensing requirements, and Rep. Frye was helpful in assisting credit unions from being inadvertently wrapped into early amendment attempts. This bill now travels to Senate Rules for consideration. AJC: 23%
  • Department of Banking and Finance Items: Traveling the same path as the above HB 750, two bills that open Title 7, the “banking” section of law code, passed the full House on March 3rd and then the Senate Banking and Financial Institutions Committee on March 6th. These are the Department of Banking and Finance’s Housekeeping bill HB 982 by Rep. Bruce Williamson (R-Monroe), which seeks to change regulations on check cashers (but no changes for credit unions), and HB 883 by Rep. Brian Strickland (R-McDonough), which would make technical changes to the Merchant Acquirer Limited Special Purpose Bank section of the code. Both are now in the Senate Rules Committee. AJC: 19%-39% respectively

These above bills are in addition to the 200-plus pieces of legislation being monitored to protect credit union interests, including bills that are potential vehicles for HOA attempts to supersede the lien priority status of financial institutions. Stay tuned; next week the Legislature will be in session Monday through Thursday and the volume of bill activity will continue!

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Vote buttonsElection Season’s Official Kickoff (Issue 5 of 5)

The qualifying period for candidates to run in the May 20, 2014 primary/nonpartisan election was this week, and generated multiple announcements as legislators kicked off their re-election campaigns or opted to retire from the Legislature, and new office-seekers announced their candidacies. Qualifying continues as of press time, but to see who has officially kicked off their campaigns please click here.

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