FEBRUARY 13, 2015
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Marathon Marathon Week of Hearings
in State Legislature (Issue 1 of 5)

A crowded slate of hearings in the Georgia Legislature this week addressed insurance issues involving ride-share companies, foreclosure, bankruptcy reform and several other issues of interest to credit unions.

 
     
  State Legislature's Flood of New Bills (Issue 2 of 5)
With 25 legislative days remaining in this year's session, lawmakers are dealing with a large volume of legislation, all of which must be reviewed for potential impact on the credit union industry.

 
  Help Sought for Regulatory Maze: Congress Introduces Privacy Notice Bill (Issue 3 of 5)
A U.S. Senator from Kansas introduced a bill that would let some financial institutions skip their annual written notices of privacy policies unless those policies had changed.

 
  Dodd-Frank 'Fix' Bill on Mortgage Fees (Issue 4 of 5)
CUNA and eight other advocacy groups are urging Congress to support a bill that would clarify the definition of mortgage fees and points, correcting provisions in the Dodd-Frank Act that are seen as hampering home ownership.

 
  Legal Action on Data Breach (Issue 5 of 5)
Six Georgians have filed a class-action lawsuit against Anthem and Blue Cross Blue Shield of Georgia over a recent data breach in which the account information of up to 80 million customers was stolen.
 
 
 
Georgia HouseMarathon Week of Hearings in State Legislature
(Issue 1 of 5)

Over the span of the state legislative session, there are countless hours spent by elected officials addressing bills and listening to testimony, as well as arguments for and against the issues. The credit union lobbying team is engaged before, after and during these hearings to help shape the issues prior becoming law (or stop issues that could be detrimental). This week, the state Legislature held marathon hours of hearings late into the evening, with many of interest to credit unions:

Transportation Network Company (TNC) Insurance

  • On February 10th the House Insurance subcommittee held their first hearing on the TNC bill, HB 190 by Rep. Rich Golick (R-Smyrna). This bill seeks to address an insurance gap issue with TNCs on behalf of credit unions, the insurance industry and others. TNCs such as Uber, Lyft and other ride-share companies have grown in popularity around the world – but there is little public awareness that there is a gap in insurance coverage if individuals are operating their vehicles as ride-share cars (as this is a commercial activity). In the hearing, the TNC companies testified on how this bill was not needed, including opposing language that would help protect Georgia consumers and the collateral by requiring the TNCs to mirror the personal coverage held by the driver. Work continues as this is a heated battle, with TNC companies wielding significant grassroots influence.

Foreclosures

  • On February 9th the House Judiciary subcommittee met to address HB 173 by Rep. LaDawn Jones (D-Atlanta), a bill that would add additional required language on foreclosure notices. However, in the course of the hearing the committee also discussed changes to the foreclosure process, or forcing the financial institution to pay for losses incurred by the city/county for deeds not being filed post foreclosure. In the end the bill was not brought forward for a vote; however, it is anticipated to be readdressed at another hearing.
  • HB 115 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. The bill passed a House Judiciary subcommittee on February 9th and awaits a hearing of the full Judiciary Committee to move forward, and will continue to 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).
  • The House Ways and Means subcommittee met on February 10th to address HB 202 by Rep. Paul Battles (R-Cartersville), which is an overhaul of the ad valorem appeal process. This bill was addressed last year, but it failed to pass the Senate by the closing hours on the final day. It was reintroduced for this session, and contains the amended language pursued by the credit union lobbying team that clears up an issue that would have inadvertently required an appraisal before a foreclosure to record the fair market value. This bill passed the full Ways and Means Committee in another hearing on February 12th and now travels to Rules for consideration.
  • On February 10th, a House Ways and Means subcommittee addressed tax redemption sales, and the nuance in the law that allows other parties to purchase and redeem tax liens through a series of shell corporations to create a "super lien" status that is at the same level as a tax lien, thereby superseding the lien priority status of credit unions and other financial institutions. However, a “fix” is not a simple process, and amendments have the grave potential of placing hurdles in the way of completing any foreclosure (regardless if there’s a tax lien). One of this year’s attempts to correct this issue is HB 81 by Rep. Scot Turner (R-Holly Springs), which seeks to prevent these "super liens" from happening. The committee did not take action on the bill yet, but another hearing is forthcoming.

Bankruptcy Reform

  • On February 10th the Senate Judiciary Committee passed SB 65 by Sen. Jesse Stone (R-Waynesboro) with no changes. This legislation seeks to increase the previously unchanged “wildcard” bankruptcy exemption for debtor’s aggregate interest from $600/$5,000 to $1,200/$10,000.

Tax Exemptions

  • The Senate Finance Committee passed SR 43 by Sen. John Albers (R-Roswell), which seeks to institute a study committee to analyze and review all special tax exemptions, and weigh the return the state receives for providing the exemption. The bill moves forward to Rules for consideration; however, the Legislature typically does not vote on study committees until the end of the session.

Lending

  • Already clearing one half of the committee hearing process this week is HB 57 by Rep. Mike Dudgeon (R-Johns Creek), which is a compromise bill between power companies and solar energy advocates to provide a legal framework for the financing of small installations of solar power units. This bill passed the full House on February 9th and travels to the Senate for consideration; this issue is being monitored to prevent any additional compliance burdens from inadvertently being added on to credit unions.

While hearings are often announced with little to no notice, the credit union lobbying team is already aware of several issues to be addressed next week. Stay tuned!

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BillsState Legislature's Flood
of New Bills (Issue 2 of 5)

The state Legislature has 25 more days remaining, with a projected adjournment date of April 2nd. And while the above high volume of hearings is more reminiscent of a typical midpoint of the session, it is still early in the process. Legislators still have ample time to move on bills, which is reflected in the large number of bills introduced on a daily basis – the legislative floodgates are wide open! All of the bills introduced each day are reviewed for potential impact to the credit union industry, and those of interest are addressed. Some of the bills introduced this week of interest to credit unions were:

  • SB 88 by Sen. Burt Jones (R-Jackson) is the anticipated payroll card bill, which seeks to provide companies the option to pay employees with a payroll card. The credit union lobbying team has been actively working with multiple interested parties to address issues on this bill before it was even introduced to finalize the language. Earlier drafts opened up concerns regarding card and general noninterest account fees, as well as ensuring that there would be nothing that would prevent a person from having direct deposit with their credit union.
  • SB 95 by Sen. Michael Williams (R-Cumming) seeks to expand where real estate agents can deposit escrow funds outside of just a bank, and would broaden this ability to include credit unions. Sen. Williams reached out to the credit union lobbying team before introducing the bill to ensure that it would be something that would be positive for the industry.
  • HB 224, HB 225, and HB 226 by Rep. Alan Powell (R-Hartwell) are three bills directed at regulating Transportation Network Companies (TNCs) and/or level the regulatory playing field for any for-hire transportation. These bills will need to be monitored closely in the course of the session as they could end up merging with the above HB 190 TNC insurance bill.
  • HB 245 by Rep. Matt Dollar (R-Marietta) which seeks to allow certain condo associations to assess a special fee on their members. This will be monitored closely as it is a vehicle for condo association interests to force financial institutions to pay back fees/fines upon foreclosure.
  • HB 253 by Rep. Mandi Ballinger (R-Canton) seeks to hold appraisal management companies to the same level of regulation as that of appraisers. This bill will need to be monitored to ensure that no unwanted amendments are included that could increase the compliance burdens of credit unions when ordering appraisals.
  • HB 267 by Rep. Trey Kelly (R-Cedartown) seeks to clarify the requirement in law of two witnesses attesting to deeds and mortgages, with the notary public sufficing for one.
  • HB 295 by Rep. Bert Reeves (R-Marietta) is a housekeeping measure that seeks to address some “cleanup” language for the Secretary of State’s office regarding corporations. The bill makes minor changes to who is defined as a registered agent for a company, and alters the language on nonprofit corporations. While the bill changes are small, it is one to monitor as it could be a vehicle for unwanted changes on who can sign for garnishments as well as how nonprofits can be dissolved.
  • HB 299 by Rep. Emory Dunahoo (R-Gainesville) is the anticipated Georgia Industrial Loan Act (GILA) bill that seeks to allow those loan companies the ability to charge a service fee for customers using a credit card. Rep. Dunahoo shared his intent on the bill with the credit union lobbying team last week – while this bill is specific for GILA, it will need to be monitored closely as it is a vehicle for legislative attempts to regulate interchange.
  • HB 322 by Rep. Brian Strickland (R-McDonough) is the anticipated bill on enforcing deed filing. This bill seeks to address city/county concerns surrounding abandoned properties by placing a $500 penalty for noncompliance of filing a deed after foreclosure. In initial discussions on this issue, the penalty was originally set to be upwards of $5,000 per instance and a shortened period in which to file the deed from 90 days to 60 days. However, the language will likely change again in the process. Stay tuned!
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MazeHelp Sought for Regulatory Maze: Congress Introduces
Privacy Notice Bill (Issue 3 of 5)

A bill that would reduce credit union regulatory burden and enhance consumer protections by modernizing privacy notifications was introduced in the Senate on February 10th. The Privacy Notice Modernization Act (S. 423) introduced by U.S. Sen. Jerry Moran (R-KS) would allow financial institutions that do not share customer information the option to forgo delivery of the annual written notice unless there has been a change in the privacy policy.

An identical version of the bill was introduced in the last Congress, but because it did not pass it needed to be reintroduced in order to be considered by the 114th Congress. A similar bill, the Eliminate Privacy Notice Confusion Act (H.R. 601), was introduced in the House January 28th by U.S. Rep. Blaine Luetkemeyer (R-MO) and already has 35 co-sponsors including Georgia Rep. Lynn Westmoreland (R-3).





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U.S. CapitolDodd-Frank 'Fix' Bill on Mortgage Fees
(Issue 4 of 5)

On behalf of credit unions and others, lawmakers in Washington, D.C., are being urged to support a bill that would clarify the definition of mortgage fees and points. CUNA, with eight other financial, real estate and builder trade groups, is encouraging members of the Congress to sign on as co-sponsors for The Mortgage Choice Act (H.R. 685) introduced by U.S. Rep. Bill Huizenga (R-MI). The bill has nine co-sponsoring including Rep. David Scott (D-13) of Georgia. The Mortgage Choice Act addresses concerns CUNA raised with the Financial Services Committee during its June 2013 testimony examining how the Dodd-Frank Act hampers home ownership, and remove confusion that exists about what constitutes a "fee" or a "point" that applies towards a statutory points and fees cap. The definition currently varies greatly depending upon who is making the loan and what arrangements are made by consumers to obtain title insurance, among other things. By eliminating confusion, H.R. 685, CUNA and the coalition wrote in a letter to House lawmakers, will ensure that consumers have greater access to mortgage credit and also more choices in credit providers.

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Blue Cross Blue ShieldLegal Action on Data Breach (Issue 5 of 5)

On February 6th the Atlanta Business Chronicle highlighted the data breach of Anthem/Blue Cross Blue Shield of Georgia, and the legal action already arising against the company. Six Georgians have become among the first in the nation to take Anthem Inc. to court over its enormous data breach. The six filed a class-action lawsuit against Anthem and Blue Cross Blue Shield of Georgia on Feb. 5 in federal court in Atlanta. Anthem, the parent company of Blue Cross Blue Shield of Georgia, said Feb. 4 that as many as 80 million customers have had their account information stolen, and the Georgia division is among groups affected.

The new court action comes as a massive court case is getting under way in federal court in Atlanta over The Home Depot Inc.'s data breach, which was revealed last September. In their lawsuit against Anthem, Joseph D'Angelo III, Shawn P. Haggerty, Charity L. Latimer, Kurt J. McLaughlin, Tamara Nedlouf and John A. Thomas II allege that Anthem and Blue Cross Blue Shield of Georgia breached their duty to safeguard and secure customers' personal and financial information. To read the full lawsuit, click here.

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