MARCH 13, 2015
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U.S. Capitol Credit Unions Descend On Washington, D.C., for GAC (Issue 1 of 5)
The Georgia delegation to CUNA's Governmental Affairs Conference in the nation's capital included more than 140 representatives of 29 Georgia credit unions.

  State Legislature at Crossover Day (Issue 2 of 5)
March 13 marks Crossover Day for the Georgia Legislature's 2015 session - the day by which a bill must have been passed in its originating chamber in order to move forward in the legislative process.

  Credit Unions Testify in State Legislature on Senate TNC Insurance Bill (Issue 3 of 5)
GCUA representatives testified in a Georgia Senate Insurance Committee hearing on behalf of a credit union-backed bill that would clarify insurance issues involving transportation network companies such as Uber and Lyft.

  DBF Housekeeping Bill with Provisions of CU Interest
Moves Forward (Issue 4 of 5)

The Senate Banking Committee gave its OK to the House version of the Department of Banking and Finance housekeeping bill, sending the measure on to the Senate Rules Committee.

  Pushing Congress for Rural Definition Bill (Issue 5 of 5)
CUNA wrote to two U.S. Representatives to support a bill that would call for establishment of a process to determine whether an area can be defined as "rural," a designation that carries potential benefits for credit unions.

U.S. CapitolCredit Unions Descend On Washington, D.C., for GAC (Issue 1 of 5)

More than 140 Georgia credit union leaders from 29 credit unions and support organizations joined the record crowd of upwards of 5,000 in Washington, D.C., for CUNA's Governmental Affairs Conference (GAC). At the onset of this event, Georgia was recognized when GCUA President/CEO Mike Mercer received the 2015 Herb Wegner Memorial Award for Lifetime Achievement at the National Credit Union Foundation event on March 9th. Congratulations to Mike Mercer on this honor!

The GAC is a whirlwind of meetings, educational sessions, and events - and time in the halls of Congress where these Georgia leaders meet with the members of the U.S. Senate and House to address issues of concern for credit unions. These discussions are vital in moving (or stopping) legislative issues, and the legislator meetings with Georgia credit unions addressed the protection of the income tax exemption, credit union regulatory relief measures, urged action on the growing number of merchant data breaches and support of pro-credit union measures such as increasing the member business lending limits. Thank you to all of the Georgia credit union advocates who traveled up to D.C. to lobby members of Congress on issues of industry importance! 

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Georgia CapitolState Legislature at Crossover Day (Issue 2 of 5)

In the state Legislature Friday the 13th is “crossover day,” which is the 30th day of the 40-day session. This is the deadline by which a bill must pass its originating chamber to have the ability to move forward as a stand-alone bill - which leads into the session’s debating bills long into the evening hours on Friday. Leading up to today, this week there were several last-minute issues to address in various hearings in the Judiciary, Banking, Regulated Industries, Insurance, Ways and Means, as well as other committees to move issues forward. Friday’s agenda will be long, with several bills and issues that the credit union lobbying team will be addressing through the evening; watch for next week for an update.

With only 10 days remaining, it will be a hectic sprint to the end. But what has this state session brought for credit unions? While there are more than 190 bills being monitored and worked on behalf of the industry at this point, here are five broad topics that can summarize some of the significant issues:

  • New Opportunities for Credit Unions: In addition to the below referenced Department of Banking and Finance Housekeeping Bill HB 184 by Rep. Bruce Williamson (R-Monroe), opportunities for credit unions and avenues to alleviate compliance burdens are sought. One such bill backed by the credit union lobbying team is SB 95 by Sen. Michael Williams (R-Cumming), which would create a new opportunity for credit unions to serve their members in a way not permitted now. The bill seeks to expand where real estate agents can deposit escrow funds, and would broaden the law to include credit unions as one of the entities that can provide this service. Next step for this bill is a hearing in the House Banking Committee. 
  • Protecting Foreclosure Procedures: There are regular attempts to change the foreclosure process in Georgia, something that is addressed to protect credit unions and ability to work with members (and prevent the concept of judicial foreclosure from taking hold in this state). Credit unions have done an excellent job of communicating their concerns on this during the off session at local Hike at Home meetings to educate state legislators, and this effort will continue. And while there are several bills in the 2015 session that seek to alter the foreclosure process or steps involved in a foreclosure, here are two examples of the efforts on behalf of the industry:

    • Georgia Capitol interiorAmended to Prevent Issues: HB 322 by Rep. Brian Strickland (R-McDonough) seeks to address concerns surrounding abandoned properties by placing a $500 penalty for noncompliance of recording a deed after foreclosure (originally the penalty was to be $5,000, with the period in which to file the deed shortened from 90 to 60 days). And while there are some large banks and mortgage lenders that have not filed the deed under power after a foreclosure and prompted this bill, the credit union lobbying team helped procure additional amendments to change the penalty time frame after foreclosure from “recorded” date to “filed,” and provide a grace period for inadvertent mistakes.
    • Opposed to Prevent Passage: Credit unions lobbied against and testified in opposition of SB 117 by Sen. Jesse Stone (R-Waynesboro) which would force foreclosing parties to pay back fees to condo associations (a maximum of six months). 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. This was successfully defeated in committee on March 5th. However, this is an issue that has passed in several other states, and the association interests continue to push for Georgia to adopt these same laws. Several bills that could be amended to include this language are being monitored closely.

  • Protecting Consumers and Collateral: As mentioned in the below related article and previous editions of Creating Influence, there are efforts to help eliminate a gap in insurance for those who drive their personal vehicles for Transportation Network Companies (TNCs) such as Uber and Lyft. The credit union-backed HB 190 by Rep. Rich Golick (R-Smyrna) passed the House and is pending a hearing in the Senate Insurance Committee, where it will likely be amended or merged into the above Senate TNC bill. This legislation is sought to provide clarification of appropriate insurance parties, coverages, and help to protect consumers and the collateral. This is a fight and a moving target; stay tuned.
  • Taxation: While the economy has improved along with the state tax collections, the funding requirements of state initiatives, departments, and issues such as transportation have the legislature seeking avenues for additional income. Bills being monitored include several that seek to review all tax exemptions, to those that touch specific areas such as the real estate transfer tax or the mortgage interest deduction. All of these are being monitored closely to protect credit unions, and this will be an ongoing effort through the off session.
  • Payment Cards: While in 2015 there have been a few bills directed at preventing data breaches, each year there are bills that open the door for a potential fight on cards, fees or interchange issues - a fight credit unions were involved in at the state legislature level before the Dodd-Frank Act passed in Washington, D.C. With Georgia’s typically pro-merchant legislature, any bill that opens the door to cards, fees, or transactions need to be monitored. Two of the ones this year include:

    • HB 299 by Rep. Emory Dunahoo (R-Gainesville), which seeks to outline in law the ability to charge a convenience fee on payments made by credit cards in certain circumstances. This bill is sought by those entities that fall under the Georgia Industrial Loan Act, and is being monitored closely as it could open up unwelcome amendments on fees, as well as state-level interchange attempts.
    • SB 88 by Sen. Burt Jones (R-Jackson) seeks to provide companies the option to pay employees with a payroll card, and the credit union lobbying team has actively worked with multiple interested parties to address issues. This bill opens up concerns regarding card and general non-interest account fees, as well as ensuring that there would be nothing that would prevent a person from having direct deposit with their credit union. This bill attracts interest from those who want to cap fees, and will need to be watched carefully as it will continue to get amended as it travels through the House to protect against negative operational or interchange issues.

Beyond these five broad areas there are seemingly countless others topics and bills that are addressed on a daily basis. This week the House passed HB 72 by Rep. Wendell Willard (R-Sandy Springs) to include trust companies in the provisions and protections against suspected financial exploitation against the elderly, and passed HB 253 by Rep. Mandi Ballinger (R-Canton) to hold appraisal management companies to the same level of regulation as that of appraisers. There was committee action on HB 153 by Rep. Tom Weldon (R-Ringgold) that seeks to enforce the law requiring that only attorneys close real estate loans (directed at large out-of-state firms that close without an attorney), and HB 381 by Rep. Andy Welch (R-McDonough) to overhaul the process in which one becomes a notary public, require training as well as detailed record-keeping by the notary. Friday’s actions in the Senate and House will add to all of this, and the 190-plus bills flagged for credit union involvement and/or monitoring will continue to be worked as the session winds to a close. For additional information you can also follow the activity at the statehouse on Twitter, and access the bills monitored on behalf of credit unions here.

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LobbyistsCredit Unions Testify in State Legislature
on Senate TNC Insurance Bill (Issue 3 of 5)

On the afternoon of Friday, March 6th the state Senate Insurance Committee held a hearing on the Senate’s version of the Transportation Network Company legislation. This bill, SB 196 by Sen. Brandon Beach (R- Alpharetta), was the TNCs' version of the credit union-backed House bill on the same topic, HB 190. GCUA testified in support of the overall concept of the bill, but urged the committee to make amendments to help strengthen the bill and include certain provisions of HB 190 to provide a lienholder notification, as well as protect the driver and collateral, something the TNCs oppose. During the hearing the committee amended the bill to include one of the credit union amendments to require a lienholder notification provision. However, much work continues.

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DBF Housekeeping Bill with Provisions of CU Interest Moves Forward (Issue 4 of 5)

Georgia Capitol interiorIn an atypical early move, the Senate Banking Committee took up a House bill prior to day 30 when it held a hearing on the Department of Banking and Finance’s Housekeeping Bill HB 184 by Rep. Bruce Williamson (R-Monroe) on Wednesday, March 11th. The bill passed and now travels to Rules to be eligible for the full Senate’s consideration, potentially next week. This bill generates questions from legislators to the credit union lobbying team - albeit friendly questions - as it pertains to several provisions that apply to the industry:

  • 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 ability to conserve a troubled credit union (as opposed to taking a stronger measure) for an 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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Rural scenePushing Congress for Rural Definition Bill
(Issue 5 of 5)

On behalf of credit unions, CUNA has written Reps. Andy Barr (R-KY) and Ruben Hinojosa (D-TX) to support a bill that would direct the Consumer Financial Protection Bureau (CFPB) to establish a process to determine whether an area can be defined as "rural." The Helping Expand Lending Practices in Rural Communities Act (H.R. 1259) would be beneficial as it would allow a person who lives or does business in a state to apply to the CFPB to designate an area as a rural area for purposes of a Federal consumer financial law. A designation of "rural" by the CFPB has many implications for credit unions, particularly with respect to the type of products credit unions may offer their members in these areas. Some benefits of designating an area as “rural” involve:

  • Escrow requirements under the Truth in Lending Act (TILA) requires certain lenders to create an escrow account for at least five years for higher-priced mortgage loans. If those loans are made by small lenders that operate predominantly in rural or underserved counties, they are exempt from this requirement. 
  • Ability-to-Repay and Qualified Mortgage (QM) standards under the TILA rule by which mortgage loans with balloon payments do not meet the QM standard. Like the escrow rule, small lenders that operate predominantly in rural areas are eligible to originate balloon-payment QMs. The CFPB has defined "rural" by using the U.S. Department of Agriculture Economic Research Services' urban influence codes.
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