JANUARY 16, 2015
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Creating Influence will not be published next week because the state Legislature will not be in session. Publication will resume with the January 30, 2015 issue.

Blueprint Start of the State Legislative Session
(Issue 1 of 5)

The Georgia Legislature began its latest two-year term on January 12, and while the work week was filled with formalities, there was also serious work being done, both in chambers and behind the scenes.

  New Senate Banking Chairman Named (Issue 2 of 5)
State Sen. Burt Jones was named chairman of the Senate Banking Committee. Sen. Jones takes up his new role with a strong understanding of the credit union industry thanks to an August 2014 Hike at Home meeting.

  Credit Unions Join 2,000 Business and Legislative Leaders
to Kick Off Session (Issue 3 of 5)

Representatives of several Georgia credit unions were among the 2,000 business and legislative leaders attending the annual Eggs and Issues Breakfast, the unofficial kickoff event for the legislative session.

  In Washington, D.C.: President Announces
Data Breach Notification Legislation (Issue 4 of 5)

In a speech at the Federal Trade Commission, President Obama proposed a national standard for corporate notifications to customers about data breaches, a process now governed by a patchwork of state laws.

  NCUA Revises Risk-Based Capital Proposal (Issue 5 of 5)
Nearly a year after releasing a controversial proposal for a risk-based capital plan, the National Credit Union Administration has released a revised proposal that apparently would have a less-negative impact on credit unions.

Georgia CapitolStart of the State Legislative Session
(Issue 1 of 5)

On Monday, January 12th the state legislative session began a new two-year cycle, with the Legislature working through four days of the “40-day schedule.” The first week is often full of the formalities, with the Governor’s State of the State address, the swearing-in of legislators, and logistical needs such as assigning legislators to committees (as well as chairmen - see related article below for the new Senate Banking Chairman). However, the legislative wheels are quickly picking up steam, and there will be many additional issues that can impact credit unions over the coming weeks. While transportation, education and medical issues (as well as the budget) will dominate much of the media’s coverage of the state Legislature, the issues of importance to credit unions often happen quietly in the halls of the Capitol through the constant interaction of legislators, lobbyists and coalition groups. This week there has been work (and lobbying reconnaissance) on anticipated issues including foreclosure issues, lien superseding attempts by homeowner association groups, the process of filing deeds, elder abuse/financial exploitation prevention, transportation network company (TNC) insurance coverage, payment cards, and debt settlement. There is a backlog of legislation waiting to be drafted; however, some of the bills introduced in first four days include:

  • HB 31 by Rep. Billy Mitchell (D-Stone Mountain) seeks to allow a debtor the right to “cure” a foreclosure by making all past-due payments, late fees and charges up to five days prior the sale of the property. This bill, which has been introduced over the past several sessions, will be monitored closely, as it is a vehicle for attempts to increase the foreclosure notice period and lengthen the time individuals can stay after a foreclosure is initiated.
  • HB 51 by Rep. Tommie Benton (R-Jefferson) seeks to prevent association dues from being included in tax redemption sales; this bill is monitored closely as it is a vehicle for amendments on the foreclosure process as well as homeowner association superseding lien attempts to force financial institutions to pay dues, fees and fines owed by the previous owner.
  • HB 8 and HB 9 by Rep. Tyrone Brooks (D-Atlanta), which seeks to raise the minimum wage, and prevent an employer from asking conviction/arrest history on an application.
  • SB 15 by Sen. Donzella James (D-Atlanta), which also seeks to raise the minimum wage.

Please check Creating Influence for updates during the session. For more details you can also follow the activity at the statehouse on Twitter, and access the bills monitored on behalf of credit unions here. Want an even closer perspective on the state Legislature? Join your colleagues at the Grassroots Academy on Tuesday, January 27th. Click here for registration information and details.

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Burt Jones
State Sen. Burt Jones
New Senate Banking Chairman Named (Issue 2 of 5)

The state House has been more of a "status quo" with its committee leadership, and Rep. Greg Morris (R-Vidalia) returns as the House Banking Chairman. However, this is not the case in the state Senate, as the Senate had several openings within its chairmen ranks due to turnover in the elections as well as political retirements - which included the Banking Chairman. This week the Senate set its chairmen, with Sen. Burt Jones (R-Jackson) named the chair of the Senate Banking Committee. In August of 2014, Georgia credit union leaders sat down with Sen. Jones to help grow his understanding of the industry and the impact credit unions have on his district. The time shared at this Hike at Home meeting was extremely beneficial as a new incoming chairman (and someone new to the committee); Sen. Jones is stepping into this pivotal leadership role with a strong background on the industry and positive working relationships. Our thanks to CGR CU, MidSouth Community FCU, and Pinnacle CU for sharing their time with Sen. Jones back in August, and our congratulations to Sen. Jones on the position.

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Credit Unions Join 2,000 Business and Legislative Leaders to Kick Off Session (Issue 3 of 5)

Eggs & IssuesOn January 13th, the second day of the state legislative session, credit union representatives and GCUA staff members joined 2,000 individuals comprising business leaders, state legislators and local officials at the Georgia Chamber of Commerce Eggs and Issues breakfast. This event is the unofficial kickoff to the legislative session, and at the credit union table were Chuck Head (Atlanta Postal CU), Sherry Saxon and Sidney Saxon (Augusta Metro FCU) and Kathy Igou and Herb Weaver (Georgia’s Own CU) as well as Rep. Brian Prince (D-Augusta). Rep. Prince is one of four state legislators who also serve on credit union boards, and shared with the group his perspectives on the legislative session prior to the breakfast presentations that were provided by Gov. Nathan Deal, Lt. Gov. Casey Cagle, and Speaker of the House David Ralston.

This event draws a high number of elected officials, and the credit union presence is a visible reminder to legislators and business leaders alike of the role credit unions play in Georgia’s progress. Other credit union leaders sitting at their local chamber tables and/or business connections were Jai Rogers (Delta Community CU), Terry Hardy (MembersFirst CU) and Brian Akin (North Georgia CU). Thank you to all of these individuals for sharing their time and representing the industry!

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In Washington, D.C.: President Announces Data Breach Notification Legislation (Issue 4 of 5)

DataA proposal that would provide a national notification standard for companies affected by data breaches was unveiled by President Barack Obama January 12th in a speech at the Federal Trade Commission. The speech also included other proposals to protect consumer data; however, the data breach legislation proposed by the president is the Personal Data Notification and Protection Act. The proposal would clarify and strengthen obligations companies have to notify customers when their personal information has been exposed, including establishing a 30-day notification requirement from the discovery of a breach. It would also create a single, national standard for notification.

Currently, states have a number of different laws (and proposed laws) that require companies that are victims of data breaches to notify their customers. Some require notifications to be made within a specific number of days of discovery of a breach, and others simply use terms like "as expeditiously as possible." Obama's proposal aims to create a national law with more concrete language. According to the White House, it will release a revised legislative proposal regarding the Consumer Privacy Bill of Rights within 45 days. Stay tuned for upcoming bills on this issue to be drafted by a federal legislator and introduced in Congress!

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NCUA logoNCUA Revises Risk-Based Capital Proposal
(Issue 5 of 5)

The NCUA Board voted on January 15th to put out a revised risk-based capital plan for credit unions for a 90-day comment period, which will begin when the proposal is published in the Federal Register. The hundreds of pages of documents are packed with revisions from the agency's original and highly criticized plan, launched almost exactly a year ago on January 23rd. The new proposal, and the changes from the original proposal, will be reviewed meticulously to identify whether the changes are sufficient to address stakeholders' - and lawmakers' - concerns regarding the initial proposal.
In 2014, credit unions, leagues and CUNA warned that approximately 200 credit unions would have had their capital classifications reduced if the original proposal were adopted without modifications. From the initial reports the new plan's details indicate the impact would be significantly reduced from that number; however, much research is pending.

NCUA noted that the new plan would: 

  • Raise the asset size at which credit unions would be covered by the rule, reducing the number of covered credit unions. The new threshold is $100 million in assets - double the originally proposed $50 million-in-assets cutoff. The agency said this change exempts 78 percent of credit unions from being covered and "provides a clear line of demarcation" for credit unions that are or are not engaging in complex activities;
  • Reduce the minimum risk-based capital ratio for well-capitalized credit unions to 10 percent, down from the originally proposed 10.5 percent;
  • Revise risk weights to remove the weighted average life interest-rate risk component, and, the agency said, make investment risk weights more comparable with bank risk weights;
  • Raise a concentration threshold at which a higher risk weight is applied to commercial and residential real-estate loans;
  • Set a lower risk weight for fully share-secured loans;
  • Assign a lower risk weight for real estate loans secured by non-owner-occupied one- to four- family residential;
  • Reduce the risk weight assigned to equity investments in credit union service organizations;
  • Eliminate the cap on the amount of Allowance for Loan and Lease Losses accounts that can be included in the numerator of the risk-based capital ratio;
  • Change the definition of "past-due loan" to 90 days delinquent, up from 60 days;
  • Allow for goodwill and other intangible assets specifically related to a supervisory merger occurring before the rule is finalized to be included in the RBC ratio calculation for an extended phase-out period to 2025; and
  • Remove the individual minimum capital requirement provision.
On another very key point, the proposal does not allow supplemental capital, but does ask for input on how supplement capital could be used. Stay tuned in the coming weeks for more details and analysis!
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