MARCH 6, 2015
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Traffic Credit Union-Supported TNC Insurance Bill Takes a Step Forward (Issue 1 of 4)
The Georgia House passed a bill that would clarify insurance issues pertaining to vehicles being used by ride-share companies such as Uber and Lyft. The measure now goes to the Senate for consideration.
  DBF Housekeeping Bill, with Sections of Interest to CUs, Passes House (Issue 2 of 4)
The Department of Banking and Finance housekeeping bill passed the state House and moves on to the Senate. The bill includes several provisions of potential importance to the credit union industry.

  State Legislative Activity on Overdrive (Issue 3 of 4)
A week before the deadline by which a bill must have passed its orginating chamber to have a chance at becoming law, introduction of new legislation has slowed, but the pace of hearings and floor sessions has increased.

  MBL Bill to Increase Business Lending Cap Introduced
in Congress (Issue 4 of 4)

Two U.S. Representatives introduced a bill in the U.S. House that would raise the cap on credit union member business lending to 27.5 percent of assets, a measure that by one estimate would lead to the creation of 140,000 new jobs.

State Rep. Buzz Brockway (R-Lawrenceville) speaking in favor
of HB 190
Credit Union-Supported TNC Insurance Bill Takes a Step Forward (Issue 1 of 4)

The credit union-backed legislation HB 190 by Rep. Rich Golick (R-Smyrna) passed the full state House with a vote of 141 to 26 on Tuesday, March 3rd. The bill now travels to the Senate for their consideration. HB 190 seeks to provide insurance standards for any Transportation Network Company (TNC), such as Uber and Lyft, that operates in Georgia. HB 190 would provide clarification of appropriate insurance parties and coverages, and help to protect consumers and the collateral.

Why is this bill being pursued for credit unions? If an individual operates his or her vehicle with a TNC as a ride-share car, it is a commercial activity, something typically not covered by personal insurance policies. It would be financially detrimental to an individual if they unexpectedly realize they do not have coverage AFTER an accident. But because HB 190 identifies the TNC as the provider of primary first-party coverage, the driver, as well as the collateral, would be covered at all times while operating in the TNC.

This issue has been a long work in progress with lobbyists from Uber and Lyft working against the bill. A new wrinkle was seen this week when a watered-down version of this legislation was introduced in the Senate. Backed by TNC lobbyists, it may gain traction. This bill, SB 196 by Sen. Brandon Beach (R- Alpharetta), is scheduled to have a hearing on Friday, March 6th. GCUA has submitted language to be considered to help strengthen the bill and include certain provisions of HB 190 to protect the driver and collateral, something the TNCs oppose. This issue continues to be a battle; stay tuned!

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DBF Housekeeping Bill, with Sections of Interest to CUs, Passes House (Issue 2 of 4)

Gold DomeThe Department of Banking and Finance’s Housekeeping Bill HB 184 by Rep. Bruce Williamson (R-Monroe) passed the full state House on Monday, March 2nd and now travels to the Senate for consideration. This legislation contains several “cleanup” edits, such as removing the filing-in-triplicate requirements peppered throughout the financial law code of Title 7. In addition, the bill contains several sections that pertain to credit unions, and seeks to:

  • Provide state-chartered financial institutions stronger parity with federally chartered institutions, which is beneficial when there are issues on the state level that negatively impact credit unions,
  • Outline in law how a bank could convert to a credit union,
  • Require out-of-state credit unions operating in Georgia to have federal insurance,
  • Provide the Department the option to conserve a troubled credit union (as opposed to taking a stronger measure) to give another avenue to return a credit union to a positive status,
  • Require that the comprehensive audit of a credit union be done by a licensed, independent public accountant or firm, unless the credit union is less than $15 million in assets, in which case an independent accountant or firm or internal auditors are permitted,
  • Set a minimum standard of conduct of directors by outlining impermissible actions, such as conflict of interest in voting on purchases/sales where they personally benefit, i.e., receiving an “insider” deal, and
  • Provide credit unions the ability to pay the required amount to join the credit union on the members' behalf if they so choose.
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Georgia Capitol interiorState Legislative Activity on Overdrive (Issue 3 of 4)

The state legislative session met through Thursday of this week, working through day 27 of the official 40-day schedule (and as of press time there are hearings on this Friday “off day”). Time is becoming scarce, with next Friday, March 13th as “crossover day.” This is the deadline by which bills must pass their originating chamber to have the opportunity to move forward. And while the introduction of bills has begun to slow, the rate of hearings, and longer floor sessions in the House and the Senate, continues to increase as legislators seek to move their bills forward to have a chance to become law. In addition to the issues addressed in the two above related articles, some activity of interest to credit unions included:

  • On Thursday, March 5th the Senate Judiciary Committee met again on the condo association superseding lien bill SB 117 by Sen. Jesse Stone (R-Waynesboro). The credit union lobbying team spoke in opposition on this bill last week as the legislation seeks to force foreclosing parties to pay back fees and fines to condo associations (a maximum of six months’ worth of charges). This would increase the cost of foreclosure, as well as impact the ability of loans on Georgia properties to be sold in the secondary market. The committee did not pass SB 117 (after much lobbying against the issue). However, additional attempts by the condo association interests are anticipated.
  • On Tuesday, March 3rd the Senate passed SB 104 by Sen. Mike Dugan (R-Carrollton) with no issues. This legislation is a cleanup bill regarding provisions in the state depository code, removing references to entities no longer in existence.
  • SB 148 by Sen. John Kennedy (R-Macon) passed the Senate Agriculture and Consumer Affairs committee on Wednesday March 4th. This bill is a 100-plus-page revision that transfers oversight of several areas from Department of Consumer Affairs to the Attorney General. Of interest, it would include areas regarding contracts, credit cards, and debtor and creditor relationships, among others.
  • SR 350 by Sen. Judson Hill (R-Marietta) was addressed in a Senate Finance Committee on Wednesday, March 4th and urges Congress to enact the Fair Tax Act.
  • On Monday, March 2nd the full House passed HB 51 by Rep. Tommie Benton (R-Jefferson), which seeks to prevent individuals from being forced to pay homeowner association fees (with no means of recourse) if purchasing a tax lien on a property. This legislation is being monitored closely as the intent of any bill can greatly change in the process and become a vehicle for homeowner associations’ superseding lien language to try to require foreclosing parties to pay past-due fees. This bill now travels to the Senate for its consideration.
  • On Wednesday, March 4th the House Judiciary Non Civil Committee passed HB 72 by Rep. Wendell Willard (R-Sandy Springs); this bill seeks to include trust companies in the provisions and protections against suspected financial exploitation against the elderly. It now moves forward to Rules.
  • On Tuesday March 3rd the House Ways and Means Committee passed HB 81 by Rep. Scot Turner (R-Holly Springs), which seeks to prevent "super liens" from happening. This happens with some tax-redemption sales in a 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. This bill now is eligible to be considered for the full House.
  • On Monday, March 2nd the full House passed HB 197 by Rep. Mike Jacobs (R-Brookhaven). This bill is an extensive rewrite of state law to bring Georgia up to standards of the uniform commercial code as it pertains to several financial statues that regulate debtor/creditor relationships. This bill now moves forward to the Senate and will continue to be monitored throughout the process for any changes that could impact credit union operations.
  • Georgia Capitol interiorIn two hearings held on Tuesday, March 3rd and Thursday March 5th a House Judiciary subcommittee heard debate on HB 387 by Rep. Trey Kelley (R-Cedartown) which seeks to permit debt-settlement companies to operate in Georgia. This bill moves forward to full Committee, and is being monitored to ensure that credit unions are not wrapped into the compliance requirements, as well as to protect consumers’ ability to utilize credit union accounts to pay back debts.
  • On Tuesday March 3rd HB 347 by Rep. Dustin Hightower (R-Carrollton) passed the full House Judiciary Committee and is now in Rules for consideration. This is a bill that opens the interest and usury section of law in Title 7, and while it pertains to calculating interest on child support payments, it is being watched closely due to its being an “open door” for any unwanted amendments that could apply to how interest is regulated in general.
  • On Wednesday, March 4th a House Ways and Means subcommittee met to address HB 364 by Rep. Jay Powell (R-Camilla). This bill originally was directed at the real estate transfer tax, and it opened up the section of law for any changes in this area. However, in committee the language was substituted and does not impact any area of credit union lending or taxation – but is an excellent reminder as to why these bills should be watched carefully as the state session is fluid!
  • On Wednesday, March 4th the House Banking Committee heard HB 462 by Rep. Alan Powell (R-Hartwell). This legislation is directed at a niche equipment leasing company; however, it opens up the potential for changes to lending operations and is being monitored to protect against compliance burdens. No vote was taken; however, that is anticipated in another hearing.
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U.S. CapitolMBL Bill to Increase Business Lending Cap Introduced in Congress (Issue 4 of 4)

On March 2nd Congress introduced a bill to raise the cap on credit union member business lending (MBL) to 27.5 percent of assets. This legislation, the Credit Union Small Business Jobs Creation Act (H.R. 1188), introduced by Reps. Ed Royce (R-CA) and Gregory Meeks (D-NY), is identical to a bill introduced by Royce in the last Congress. 

To qualify for the higher MBL threshold, credit unions must be well capitalized, have a history of MBL experience, be operating at no less than 80 percent of the cap for the previous year and receive approval from the NCUA. CUNA estimates that raising the cap from the current 12.25 percent of assets would create 140,000 new jobs and allow credit unions to lend an additional $13 billion to small businesses, with no cost to taxpayers. Raising the MBL cap is a legislative priority for credit unions, Leagues and CUNA.

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