MAY 2, 2014
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Statewide News Coverage
Credit Union Priority Bill Now Law
(Issue 1 of 7)

A bill of importance to Georgia credit unions, stating that overdraft fees are not interest and are not subject to state usury laws, was signed into law on April 29.

  Georgia's Patent Troll Bill Signed Into Law (Issue 2 of 7)
Gov. Nathan Deal signed into law a bill that will help protect credit unions from frivolous legal expenses resulting from the actions of "patent trolls" who try to use the patent system to extract settlements from credit unions and others.

  Congress Picks Up Work on Housing Reform & Patent Trolls (Issue 3 of 7)
The U.S. Congress returned from a two-week recess to take up work on issues including legislation to reform housing finance and a federal version of patent troll legislation.

  Hands-On Grassroots: Growing Personal Connections
(Issue 4 of 7)

Representatives of several credit unions have been building influence by attending campaign events and fundraisers for state legislators and candidates for federal office.

  Credit Unions Get Engaged in Collins Campaign (Issue 5 of 7)
Credit unions in the 10th Congressional District hosted Mike Collins, a candidate for the district's open seat, giving Collins, a credit union board member, the chance to meet staff and members and promote his candidacy.

  One Hurdle Cleared for NCUA Nomination (Issue 6 of 7)
The Senate Banking Committee gave its OK to several nominations for federal posts, including that of Mark McWatters to succeed Michael Fryzel on the NCUA Board.

  Who Is Liable? Georgia Supreme Court Hears Arguments (Issue 7 of 7)
The Georgia Supreme Court heard arguments in a case over whether bank officers are liable for decisions that led to the bank's failure. A lawyer for former directors argued that Georgia law shields executives from such claims.

Georgia Capitol interiorCredit Union Priority Bill Now Law
(Issue 1 of 7)

On April 29th a priority bill for credit unions during the state legislative session was signed into law: HB 824 by Rep. Richard Smith (R-Columbus). This law, unique from the rest of the country, 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 bill was heavily lobbied by GCUA throughout the process (and regular legislator communication to mitigate interests that wanted the bill stopped) to move it forward as it will help protect credit unions against legal challenges on overdraft. This new law ends the debate on overdraft programs at state-chartered institutions with welcome relief from questions, uncertainty and potential litigation. Our thanks to Rep. Smith, whose unwavering focus helped guide it through the challenging process. To quote anyone who has been a part of a legislative session, “It’s a lot easier to stop a bill than it is to pass one” - and while it was an uphill battle, GCUA is pleased to share that the countless hours of work proved positive!

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Georgia CapitolGeorgia's Patent Troll Bill Signed Into Law (Issue 2 of 7)

On April 24th, Governor Nathan Deal signed HB 809 by Rep. Bruce Williamson (R-Monroe) into law. This is good news for credit unions; GCUA supported this legislation throughout the 2014 state session as it will help protect credit unions from frivolous legal expenses. This law is designed to address the growing threat of patent trolls, which are those entities that use low-quality patents for legal settlements with credit unions, banks and others. It will make Georgia less attractive to those that sue credit unions and others for the use of certain ATM technologies, check imaging applications, check cashing applications and mobile payment options. Similar versions of this bill have been introduced in other states to try to drive these patent trolls out (and blanket other states with their demand letters); with this new law credit unions in Georgia now have an added layer of protection against this!

Other bills of interest to credit unions signed into law:

  • Identity Theft Protections for Minors: HB 915 by Rep. Josh Clark (R-Buford) was signed into law on April 24th to provide a procedure to place credit freezes on minors to help protect against identity theft. This bill is positive for Georgia families, and was not altered in the process to impact credit unions, and will help prevent against fraud to the individual and institution.
  • Redacting Information: SB 386 by Sen. John Albers (R-Roswell) was signed into law on April 22nd to protect against identity theft by providing the avenue to redact confidential information such as Social Security or financial account numbers in documents filed in the courts. GCUA monitored this issue closely to address concerns, and the bill was amended in the process to provide the ability to have full information on served garnishment notices.
  • Mortgage Licensing Exemption: HB 750 by Rep. Spencer Frye (D-Athens) was signed into law on April 21st to add Habitat for Humanity to those entities (which include credit unions) exempted from mortgage licensing requirements. GCUA worked with the bill sponsor to prevent unwanted amendments that could have cast uncertainty on the current mortgage licensing exemption for credit unions.
  • Auctioneers: HB 1042 by Rep. Katie Dempsey (R-Rome) was signed on April 29th to amend the law pertaining to auctioneers. This bill had contained a definition of an auction, which would have inadvertently included credit unions and others that sell an item by bid process (consider repossessed autos). Left as is, it would have had the unintended consequence of wrapping credit unions into auctioneer licensing and compliance burdens. GCUA worked to have the language removed before final passage.
  • DBF Housekeeping Measures: Two bills that open Title 7, the “banking” section of law, were signed on April 29th – the Department of Banking and Finance’s Housekeeping bill HB 982 by Rep. Bruce Williamson (R-Monroe) on check cashers (but no changes for credit unions), and HB 883 by Rep. Brian Strickland (R-McDonough) to make technical changes to the Merchant Acquirer Limited Special Purpose Bank code.
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U.S. CapitolCongress Picks Up Work on Housing Reform & Patent Trolls
(Issue 3 of 7)

The U.S. Congress returned after a two-week district work period and began work on key credit union items - mark-ups of housing finance and patent reform bills. 

The Senate Banking Committee markup of housing finance reform legislation began this week after a short postponement to allow the members more time to consider the issue. The 425-page draft bill takes significant steps to ensure credit unions will continue to have access to a functioning, well-regulated, well-capitalized secondary mortgage market. The bill seeks to overhaul the housing finance market and address the issues created by the current government ownership of Fannie Mae and Freddie Mac, and CUNA is monitoring the situation to improve areas where there are still outstanding issues.

The Senate Judiciary Committee is slated to address the Patent Transparency and Improvements Act (S. 1720) soon. This is the federal version of the Patent Troll Bill (see above related article), which, in part, would aid credit unions and other businesses that have been targeted by patent "trolls," who manipulate the patent system for their own gain.

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HandsHands-On Grassroots: Growing Personal Connections (Issue 4 of 7)

Being successful in a legislative environment is dependent on the legislative influence any industry wields, and credit unions in Georgia work to grow this influence each year. This is done through meeting legislators in the district (Hikes at Home) or in D.C. (Hike the Hill), getting involved in campaign activity (see below) and building personal connections with legislators. In the past two weeks, credit unions have joined GCUA at several key events to grow the legislative influence of all credit unions:

  • Brian Akin with North Georgia Credit Union joined his local State Rep. Dan Gasaway (R-Homer) at a private campaign event that drew attendance from several members of House leadership, including Speaker of the House David Ralston.
  • Andrea Shorr with LGE Community Credit Union was a visible force at an in-district fundraiser for State Rep. Mark Hamilton (R-Cumming) amongst legislators, lobbyists and in-district supporters, and is reinforcing the connection at an upcoming credit union phone-bank night.
  • Anna Foote with The Coca-Cola Company Family Federal Credit Union helped work an in-district fundraiser for State Sen. Nan Orrock (D-Atlanta). In addition, Foote also shared her time at the Democratic Party’s annual Jefferson Jackson Dinner!
  • Brian Akin with North Georgia Credit Union hosted a meet-and-greet for U.S. Republican Senate candidate Jack Kingston in the Toccoa area for local business leaders as chair of his Chamber of Commerce.
  • Chris Leggett with LGE Community Credit Union participated in a fundraiser for Bob Barr, candidate for the open 11th Congressional District seat. Barr was a strong credit union supporter in the past, and will continue with his seniority if re-elected. He has expressed that he hopes to get reappointed to the House Financial Services Committee.

The credit union industry’s presence at the above is a direct reflection of the personal inroads these individuals have made in their connections with their elected leaders, and all of the involvement is timely as each faces primary competition in the May 20th elections.

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Congressional candidate Mike Collins, right, talks to members at Georgia United Credit Union's Athens branch.
Credit Unions Get Engaged in Collins Campaign (Issue 5 of 7)

Over the last two weeks credit unions with locations in the 10th Congressional District have hosted Mike Collins, a candidate for that open Congressional seat. These visits involved touring the location, meeting staff and spending time with members. And for good reason: Collins sits on the board of Associated Credit Union, and if elected he would be a strong asset to the credit union industry nationwide.

In a race crowded with candidates (seven Republicans are running in the May 20th primary) and stretched over 25 counties, one thing that is imperative for any candidate is meeting as many people as possible - which is where credit unions can help. Collins shared time with credit union staff and members, and in the course of the visits was even able to hand out some yard signs! Special thanks to the following credit unions for opening their doors to a credit union person: CGR Credit Union (Milledgeville location), Georgia United Credit Union (Athens location), MidSouth Community Federal Credit Union (Milledgeville location), Peach State Federal Credit Union (Athens location), Pinnacle Credit Union (Eatonton location), and Robins Federal Credit Union (Athens and Milledgeville locations). The time spent meeting as many voters as possible was a big asset to his campaign!

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HurdlesOne Hurdle Cleared for NCUA Nomination (Issue 6 of 7)

On April 29th the Senate Banking Committee approved a number of nominations, including that of Mark McWatters to succeed Michael Fryzel on the NCUA Board. Along with McWatters, the committee approved:

  • Stanley Fischer to be a member and vice chairman of the Federal Reserve Board of Governors;
  • Jerome Powell and Lael Brainard to be a members of the Federal Reserve Board of Governors; and
  • Gustavo Velasquez Aguilar to be an assistant secretary of Housing and Urban Development.

The next step is for the full Senate to vote on their final confirmations, which is expected. McWatters was nominated in January to succeed Fryzel, whose NCUA Board term expired Aug. 2, 2013. McWatters’ term, if he is confirmed by the full Senate to the post, would continue through Aug. 2, 2019. NCUA's board members serve staggered terms: Board Chairman Debbie Matz's term continues until Aug. 2, 2015, and Board Member Rick Metsger's term is until Aug. 2, 2017. When McWatters appeared before the banking panel, he stated he wants to focus on the NCUA’s risk-based capital proposal and overregulation of small credit unions once he takes his seat.

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Georgia Supreme CourtWho Is Liable? Georgia Supreme Court Hears Arguments
(Issue 7 of 7)

On April 21st the Atlanta Business Chronicle reported that a lawyer for the FDIC argued that officers of a bank should be held liable for decisions that led to the bank’s failure. But a lawyer representing former directors of The Buckhead Community Bank told the Georgia Supreme Court the state’s business judgment rule shields bank executives from ordinary negligence claims arising from decisions made in good faith. The Georgia Department of Banking and Finance closed The Buckhead Community Bank in December 2009. The FDIC, acting as the bank’s receiver, sued in federal court last year, charging nine former officers and directors with negligence for having approved real estate loans without conducting pre-purchasing analyses and consequently extending credit to borrowers who were not creditworthy.

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