APRIL 17, 2015
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Capitol State Session Final Wrap-Up
(Issue 1 of 4)

The 2015 state legislative session is history, and from a credit union perspective it went well, with a considerable number of bills affecting the industry having passed and moved on to the Governor for his consideration.

  Legislative Success Depends on You! (Issue 2 of 4)
The success of Georgia credit unions' legislative efforts springs from strong and trusting relationships between credit union advocates and legislators, making it crucial that credit union people work hard to establish such relationships.

  Credit Unions Engaging with Congressmen (Issue 3 of 4)
Representatives of a Georgia credit union chapter and an individual credit union took opportunities recently to interact with two of Georgia's U.S. Representatives, helping promote the CU message.

  U.S. House Passes Five Regulatory Relief Bills! (Issue 4 of 4)
The U.S. House of Representatives this week passed five regulatory relief bills that were supported by the credit union industry, dealing with issues such as privacy policy notices, open meetings and others.

Sine dieState Session Final Wrap-Up (Issue 1 of 4)

It’s a wrap! The state legislative session is over, with many bills and industries in its wake. From a credit union perspective however, the session ended well for the industry. The media focused on the more polarizing issues in the state legislature such as transportation, autism and marijuana to name a few. While at first glance these issues did not impact credit unions, nothing happens in a vacuum in the state legislature – everything is interconnected, impacting what issues do or do not move forward. And there was no shortage of issues: more than 200 bills of interest to credit unions out of 2,400+ bills/resolutions introduced were reviewed and analyzed for potential impact to the industry.

An important point to remember is that 2015 marks the first half of a two-year session cycle, meaning anything that did not pass is still eligible in 2016 – so the end is not here yet! To see all the 200+ bills of interest, please click here for the credit union legislative tracking system, and below are some highlights of the major issues lobbied on behalf of credit unions:

Sine die 2Proactive Issues Lobbied
for Credit Unions: Passed
and On Way to Governor

Insurance Standards for TNCs: HB 190 by Rep. Rich Golick (R-Smyrna) provides insurance standards for any ride-share Transportation Network Company (TNC) such as Uber and Lyft that operates in Georgia. This bill was heavily lobbied by GCUA throughout the process to move the issue forward, and provides clarification of appropriate insurance parties and coverages, creates a lienholder notification for the TNCs to direct their drivers that they may be in violation of their loan agreement, and help protect consumers in the event of an accident.

Parity Powers and Regulatory Changes: The Department of Banking and Finance Housekeeping Bill HB 184 by Rep. Bruce Williamson (R-Monroe) provides state-chartered financial institutions stronger parity with federally chartered institutions, outlines how a bank could convert to a credit union, requires out-of-state credit unions operating in Georgia to have federal insurance, provides the Department the ability to conserve a troubled credit union, requires the comprehensive audit of a credit union with assets $15 million and above be done by a licensed, independent public accountant or firm, sets a minimum standard of conduct of directors, and provides credit unions the ability (if they so choose) to pay on behalf of members the required amount to join the credit union.

Escrow Accounts: SB 95 by Sen. Michael Williams (R-Cumming) creates a new opportunity for credit unions to serve their members in a way not permitted now. The bill expands where real estate agents can deposit escrow funds, and broadens the law to include credit unions as one of the entities that can provide this service.

Sine die 3Issues Lobbied and Amended to Protect Credit Unions: Passed and On Way
to Governor

Payroll Cards: SB 88 by Sen. Burt Jones (R-Jackson) provides companies the option to pay employees with a payroll card, and the credit union lobbying team worked with multiple parties to address issues. This bill opened concerns regarding card and general non-interest account fees, interchange or other operational issues, and lobbying efforts were put forth to ensure there would be nothing that would prevent a person from having direct deposit with their credit union.

Deed Filing: HB 322 by Rep. Brian Strickland (R-McDonough) addresses concerns surrounding abandoned properties by placing a $500 penalty for noncompliance of recording a deed after foreclosure (original penalty was $5,000, with the period in which to file the deed shortened from 90 to 60 days). The credit union lobbying team worked to lessen the impact, as well as help procure amendments to change the penalty time frame after foreclosure from “recorded” date to “filed,” and provide a grace period for inadvertent mistakes. In the final days of the session the bill was amended to include HB 267 by Rep. Trey Kelly (R-Cedartown) on changing the witness requirements for deeds and mortgages, as well as language from the state on how it treats unclaimed property.

Unauthorized Practice of Law: HB 153 by Rep. Tom Weldon (R-Ringgold) 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). Prior to passage, an amendment was procured to help protect financial institutions from having their current lending operations impacted.

Lending: HB 202 by Rep. Paul Battles (R-Cartersville) overhauls the ad valorem appeal process. It retained the language sought on behalf of credit unions that clears up an issue that would have inadvertently required an appraisal before a foreclosure to record the fair market value.

Credit Cards: HB 299 by Rep. Emory Dunahoo (R-Gainesville) outlines in law the ability for additional industries to be permitted to charge a convenience fee on payments made by credit cards. It was sought by those entities that fall under the Georgia Industrial Loan Act, and was monitored closely to prevent unwelcome amendments on fees as well as state-level interchange attempts.

Sine die 4Issues Lobbied and Continually Monitored to Protect Credit Unions: Passed and On Way
to Governor

Federal Home Loan Bank: HB 552 on private capture insurance companies by Rep. Bruce Williamson (R-Monroe) was amended to include HB 624 to provide the Federal Home Loan Bank the same priority position with member insurance companies as it has with its member financial institutions.

Forfeitures: HB 233 by Rep. Alex Atwood (R-St. Simons Island) creates civil forfeiture standards, and retains a process by which financial institutions can recoup seized property.

Eldercare Financial Abuse: HB 72 by Rep. Wendell Willard (R-Sandy Springs) includes trust companies in the provisions and protections against suspected financial exploitation against the elderly.

Appraisals: HB 253 by Rep. Mandi Ballinger (R-Canton) intends to hold appraisal management companies to the same level of regulation as that of appraisers.

State Depository Board: SB 104 by Sen. Mike Dugan (R-Carrollton) is a cleanup bill on provisions in the state depository code, removing a member of the board and references to entities no longer in existence.

Regulatory Oversight: SB 148 by Sen. John Kennedy (R-Macon) transfers oversight of several areas from Department of Consumer Affairs to the Attorney General. Of interest it includes among others areas regarding contracts, credit cards and debtor and creditor relationships.

Debtor/Creditor Standards: 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 statutes that regulate debtor/creditor relationships and bring Georgia in line with the vast majority of other states. This bill was stripped of its original language in the final days of the session; however, it was inserted into the below SB 65 that passed.

Bankruptcy Exemptions: SB 65 by Sen. Jesse Stone (R-Waynesboro) makes one change in the bankruptcy exemption for debtor’s aggregate interest from $600/$5,000 to $1,200/$10,000. It was also amended in the process to include the above UCC debtor/creditor uniform standards language.

Interest and Usury: HB 347 by Rep. Dustin Hightower (R-Carrollton) opens the interest and usury section of law in Title 7, and while it pertains to calculating interest on child support payments it was watched closely to prevent unwanted amendments that could apply to how interest is regulated.

Condo Assessments: HB 245 by Rep. Matt Dollar (R-Marietta) allows certain condo associations to assess a special fee on their members, and was monitored closely as it is a vehicle for condo association interests to force financial institutions to pay back fees/fines upon foreclosure.

Boat Taxation: HB 457 by Rep. Lee Hawkins (R-Gainesville) changes the ad valorem tax on watercraft held at dealerships; it was monitored for amendments that would impact boat financing.

Sine die 5Issues Lobbied, Modified or Mitigated
to Protect Credit Unions:
No Final Passage by Day 40

Lien Superseding: 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. 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 has passed in several other states, and the association interests continue to push for Georgia to adopt similar laws. Several unrelated bills not listed here were monitored closely to ensure they were not amended to include this superseding language.

Tax Liens: HB 51 by Rep. Tommie Benton (R-Jefferson) 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 was monitored closely as it is a vehicle for homeowner associations’ superseding lien language to try to require foreclosing parties to pay past-due fees. HB 81 by Rep. Scot Turner (R-Holly Springs) seeks to alter a nuance in the law that allows 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. Both bills are eligible for action in 2016.

Boat Titling: HB 356 by Rep. Ron Stephens (R-Savannah) seeks to implement a taxation and titling process for boats similar to the one in place with the TAVT system for autos. This issue will likely be studied in the off session by GCUA and other interested parties for potential movement in 2016.

TAVT: HB 156 and HB 158 by Rep. Tom Rice (R-Norcross) seeks to change the method by which motor vehicles are valued for taxation, something of interest to credit unions in determining used auto values in lending. This issue did not move forward, but may gain traction in 2016.

Taxation: While the economy has improved along with the state tax collections, the funding requirements of state initiatives, departments and issues have the legislature seeking avenues for additional income. There were bills ranging from seeking to review all tax exemptions to those that touch specific areas such as the real estate transfer tax or the mortgage interest deduction. And while a tax reform proposal did not pass in 2015, it is likely the off session will hold various hearings on potential tax changes that will need to be monitored. Some of the tax related bills included:

  • SR 350 by Sen. Judson Hill (R-Marietta) urges Congress to enact the Fair Tax Act.
  • HB 435 by Rep. BJ Pak (R-Lilburn) is a tax-reform proposal that would lower the personal income tax, but cap the mortgage interest deduction.
  • HB 445 by Rep. John Carson (R-Marietta) is a proposal for extensive tax-reform that removes a large number of credits and deductions and expands several areas of what is taxable. Currently out of the 81 pages of changes, there are no financial transaction items in the bill, intangible property taxes, or credit union income taxes.
  • HB 466 and HB 467 by Rep. Jay Powell (R-Camilla) are two tax bills that open the code of law regarding sales and business tax, and while they presently do not do anything yet, they are watched carefully for changes.
  • SR 43 by Sen. John Albers (R-Roswell) 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.

Notary Public: HB 381 by Rep. Andy Welch (R-McDonough) would overhaul the process in which one becomes a notary public, require training as well as detailed record-keeping by the notary. This bill is one of many that may move forward in 2016.

Sine die 6TNC Insurance Standards: SB 196 by Sen. Brandon Beach (R- Alpharetta) was the Senate’s version of 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. SB 196 was amended to include the lienholder notification in committee; however, the Senate chose to move HB 190 forward.

Debt-Settlement Companies: HB 387 by Rep. Trey Kelley (R-Cedartown) seeks to permit debt-settlement companies to operate in Georgia. This bill was monitored to prevent credit unions from becoming wrapped into compliance requirements, as well as to protect consumers’ ability to utilize credit union accounts to pay back debts. It was amended in committee to ensure that credit unions were not blocked from offering accounts; however, the bill did not move forward. It is anticipated again in 2016.

Real Estate Transfer Tax: HB 364 by Rep. Jay Powell (R-Camilla) 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. While this bill did not pass, this issue will continue to be monitored.

Leasing: HB 462 by Rep. Alan Powell (R-Hartwell) seeks to outline certain consumer leases as pawn transactions, and not loans or extensions of credit. This legislation is monitored for any changes that could impact lending operations or create compliance burdens on credit unions, and may return in 2016.

Spendthrift Trusts: HB 456 by Rep. Tom Weldon (R-Ringgold) seeks to alter the state law regulating spendthrift trusts and how they are operated. This bill was amended to ensure creditors’ rights were not erased on existing loans, and was inserted into the above mentioned HB 197. However, this issue failed to advance in the final hour.

Cyber Security: There were several resolutions such as HR 473 by Rep. Dudgeon (R-Johns Creek) to bring cyber security and card breaches to the attention of Congress, the media and others, but no bills that sought to correct the issue (as it is broader than just the state!). However, this is an issue likely to be studied in the off session and will be monitored.

Foreclosure Right to Cure: 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 to the sale of the property. This bill is a prime vehicle for attempts to increase the foreclosure notice period and lengthen the time individuals can stay after a foreclosure is initiated. While it did not pass, it continues to be monitored closely.

Foreclosure Process: HB 173 by Rep. LaDawn Jones (D-Atlanta) would require additional language on foreclosure notices. In the course of a hearing, changes to the foreclosure process or forcing the financial institution to pay for losses incurred by the city/county for deeds not filed post foreclosure was debated. This issue will continue to be monitored in 2016.

Corporations: HB 295 by Rep. Bert Reeves (R-Marietta) makes minor changes to who is defined as a registered agent for a company, and alters the language on nonprofit corporations. While the changes are small, the bill is one to continue to monitor in 2016 as it could be a vehicle for unwanted language on who can sign for garnishments as well as how nonprofits can be dissolved.

Private Label Credit Cards: HB 389 by Rep. Brett Harrell (R-Snellville) seeks to provide an income tax deduction on charged-off bad debt on private-label credit cards, and is monitored for any negative changes that could include state-level interchange issues. This bill did not move forward but will continue to be monitored.

Boards of Directors: SB 128 by Sen. John Kennedy (R-Macon) makes a variety of changes to how boards of directors operate and is being monitored to protect against any negative language being added, including language that could increase liability of board members.

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SuccessLegislative Success Depends on You! (Issue 2 of 4)

The success of credit unions in the state session can be summed up in three sentences:

  1. Bills that needed to be stopped because of their negative impact on credit unions were stopped.
  2. Bills that needed to be amended to mitigate compliance burdens or undue constraints on credit unions were amended.
  3. Bills that would create a positive operational environment for credit unions passed.

All of this takes effort, research, lobbying, consistent messaging and energy – but it also takes you. Why? A lobbying stance on issues carries more weight when a legislator can tie an issue, a concern, a statement back home to an individual they know in their district. Especially if it is a person they know and trust, and have built a strong relationship with back home. And if that trusted individual contacts them during the session on an issue, it resonates much more strongly than all the lobbyists at the Capitol combined.

During the off session, make an effort to get to know your legislators. Engage with them in local events, meetings, invite them to your credit union. Become someone that they know and trust - and you can help shape your credit union’s future success for years to come. Already have a relationship with a legislator? Please share that with GCUA today!

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U.S. Rep. Doug Collins
U.S. Rep. Barry Loudermilk, left, with Andrea Shorr of LGE Community CU
Credit Unions Engaging with Congressmen
(Issue 3 of 4)

While the state session is hectic and intense, members of the General Assembly have the luxury of being “out” once they adjourn until January (barring any off-session special hearings and/or sessions on issues). This period of time is ideal to connect with your state legislators when they are back home where you are. Unlike the state Legislature, Congress is in session throughout the year. However, federal legislators do travel back to Georgia regularly - holding town halls, attending events and working in their in-district offices before heading back to Washington, D.C. On April 2nd credit unions around the state connected with two members of the U.S. Congress while they were home in their districts:

  • The Northeast GA Chapter hosted U.S. Congressman Doug Collins (R-9) at their meeting. Rep. Collins shared his thoughts with the group on the value credit unions provide to communities and their members, and illustrated some of the issues being addressed by Congress. Many individuals in the chapter have made an effort to connect with the Congressman at events since he first came to Washington, D.C., and his involvement with the Chapter is another connection of relationship building with the legislator!
  • On April 2nd, Andrea Shorr with LGE Community CU attended the grand opening of the new district office for U.S. Congressman Barry Loudermilk (R-11). Rep. Loudermilk is just one of several area legislators with whom Shorr has built a relationship in the district!

Great job connecting these two Congressmen with the industry! We encourage everyone to seek out opportunities to engage your chapter, your credit union or just you personally with your legislators. It grows the ability of credit unions to shape legislation before it becomes regulation, thereby helping all credit unions across the state succeed. If you connect with your legislator, please pass it along to GCUA.

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U.S. House Passes Five Regulatory Relief Bills! (Issue 4 of 4)

U.S. CapitolFive credit union-supported regulatory relief bills passed the House on April 13th:

  1. The Capital Access for Community Financial Institutions Act of 2015 (H.R. 299) which would allow privately insured credit unions to join the Federal Home Loan Bank program;
  2. The Privacy Notice Modernization Act (H.R. 601) which would require financial institutions to send privacy policy notifications only when the policy has changed;
  3. Helping Expand Lending Practices in Rural Communities Act (H.R. 1259) which would direct the Consumer Financial Protection Bureau (CFPB) to establish an application process for determining whether an area should be defined as "rural," which would impact products credit unions in those areas could offer;
  4. Bureau Advisory Commission Transparency Act (H.R. 1265) which would open up meetings of the CFPB's Credit Union Advisory Council to the public; and 
  5. The SAFE Confidentiality and Privilege Enhancement Act (H.R. 1480) would allow state and federal regulatory officials with financial services industry oversight authority to access information provided to the Nationwide Mortgage Licensing System and Registry without the loss of confidentiality protections provided by federal and state laws.
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