DECEMBER 18, 2015
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Happy Holidays!
Creating Influence will not be published on Christmas Day,
December 25, or New Year's Day, January 1.
Publication will resume with the January 8, 2016 issue.

Share Share a Message of Support on FOM with NCUA (Issue 1 of 5)
The deadline for comments on NCUA's proposal for wide-ranging changes to its field of membership rules is February 8, 2016. Credit union advocates are urged to support the proposal.

  House Financial Services Committee Passes Two Bills Supported by Credit Unions (Issue 2 of 5)
With support from two U.S. Representatives from Georgia, the U.S. House Financial Services Committee passed bills that would help protect consumer data and provide credit unions some transparency with NCUA.

  10 Issues for Credit Unions to Watch in the Upcoming 2016 GA Legislature (Issue 3 of 5)
The second half of the Georgia Legislature's current session begins on January 11. Credit union involvement is needed for numerous bills that have the potential to affect the industry, for better or for worse.

  Register Now for State Governmental Affairs Day (Issue 4 of 5)
Registration is under way for the 2016 State Governmental Affairs Day, also known as Grassroots Academy. The event, set for January 26, is designed to provide valuable insight into the legislative and political environment.

  Credit Unions in the News (Issue 5 of 5)
The credit union message is getting out, as evidenced by coverage of the industry in a wide range of media outlets, from newspapers to magazines to the broadcast media.

Share a Message of Support on FOM with NCUA (Issue 1 of 5)

TenAs highlighted in the last edition of Creating Influence, NCUA has proposed wide-ranging changes to field of membership (FOM) rules. The proposal was published in the Federal Register last week, and the comment deadline has been set for February 8, 2016. GCUA sent out a call to action on December 14th asking all Georgia credit unions to engage their staff and volunteers in submitting an electronic message of support on the field of membership proposal to counteract the negative messages they are receiving from banker trade group efforts. If you have not done so yet, you can utilize the GCUA grassroots action center to submit pre-written letters.

For years, credit unions, Leagues and CUNA have advocated to NCUA that it has the ability to legally amend their FOM rules (something that it has not done historically). However, with this new proposal NCUA has stated that the changes sought have been partially driven by NCUA’s perception that many state FOMs are more beneficial to SCUs. Whether you are state or federally chartered, all credit unions benefit from a strong dual chartering system to ensure that credit unions have progressive laws and rules in which to serve members.

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TreeHouse Financial Services Committee Passes Two Bills Supported by Credit Unions
(Issue 2 of 5)

On December 9th the House Financial Services Committee passed two bills that credit unions, Leagues and CUNA have been lobbying for to help protect consumer data, as well as provide credit unions some transparency with NCUA. These were the Data Security Act of 2015 (H.R. 2205) and the NCUA Budget Transparency Act (H.R. 2287). There are two Georgia Congressmen who sit on this committee: U.S. Rep. Lynn Westmoreland (R-3) and U.S. Rep. David Scott (D-13). Our thanks to them for their partial or full support of these issues: Rep. Scott voted in favor of both Data Security and NCUA Budget Transparency, and Rep. Westmoreland voted in favor of the NCUA Budget Transparency. While this is just one step in the legislative process, if passed fully these bills would:

NCUA Budget Transparency:

  • Require the NCUA to publish its budget in the Federal Register, and
  •  Accept comments on the budget and address those comments.

Data Security:

  • Create a single data security standard for all entities that handle sensitive consumer information;
  • Create a data breach notification standard, and allow card issuers to disclose and identify to members or customers the details of a data breach, which would deflect reputational risk to financial institutions for breaches that occur through retailers’ systems;
  • Provide federal regulators the authority to enforce the provisions of the bill; and
  • Recognize that credit unions and other financial institutions already have strict data security standards set forth under the Gramm-Leach-Bliley Act, and do not impose any additional standards on them.

GCUA and CUNA issued an action alert prior the hearing to engage credit unions in support of H.R. 2205, urging them to contact their legislators. More than 230 credit union advocates in Georgia quickly responded in the short period of time in the call to action to pass these bills – thank you for engaging on the issue!

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Ten10 Issues for Credit Unions to Watch in the Upcoming 2016 GA Legislature (Issue 3 of 5)

The Georgia Legislature begins the second half of a two-year state session on January 11th. Given the high level of activity that GCUA has been engaged in over the past several months on state issues, 2016 will have no shortage of bills that impact credit unions,  and will require significant time and energy to proactively advance credit unions and prevent state-level compliance obstacles from being created. The second half of a legislature means anything that did not pass in 2015 is still eligible, and with more than 2,400 separate pieces of legislation, and more than 200 that were of interest to credit unions, already in play, thousands more that will need to be reviewed for potential impact of credit unions. Here are 10 issues of interest to credit unions already anticipated:

  1. Garnishment Law Correction

    In the fall of 2015, a judge in the Northern District ruled the state’s garnishment statute unconstitutional due to its not requiring creditors to tell debtors that some money (such as Social Security, workers’ compensation and welfare) is not eligible to be garnisheed, and not providing an avenue to get back funds that were taken in error. After the ruling, the clerk of court for Gwinnett County immediately halted garnishments and this action has had ripple effects across Georgia’s courts. GCUA has been in regular dialogue with legislators as it is imperative for credit unions to have a garnishment process that works. Whether from the perspective of a creditor or the receiver of a garnishment, it is important that the legislative correction is clear on implementation. A solution is needed, but it also needs not to be onerous on operations or open an institution up to lawsuits. GCUA continues work on this issue until it is resolved.

  2. EMV/Chip and PIN Mandate Attempts

    Since October of 2015 GCUA has seen an influx of activity from the national retailers’ association working inside Georgia to urge state elected officials to mandate that all financial institutions  implement chip and PIN technology - mischaracterizing it as THE one way to eliminate ALL breaches. Credit unions have worked to educate members of Congress on the impact of data breaches, and this is just the most recent attempt by retailers to try to shift and redefine the issue. GCUA has been in dialogue with key legislators to counteract the retailers’ efforts, and this topic was the subject of the most recent Hike at Home on November 30th. It is clear that this issue is far from being over, with multiple lobbying groups in state pushing on behalf of retailers. Placing Georgia credit unions at a different standard than the rest of the country would create an operational disadvantage, impose an undue financial burden, impact interchange, and create a misconception with members that their data is instantly and fully safeguarded.

  3. State Charter Enhancements

    During 2015, GCUA conducted a thorough review of legislative priorities to create the environment for credit union success in the years ahead. In that process, potential changes in law/regulation to create new value and opportunities were identified to simplify the regulatory process, eliminate constraints on credit unions, and improve the state charter holistically from both the legislative and the regulatory perspective. Changes sought on behalf of Georgia credit unions include broad-spectrum enhancements to the charter, improving field of membership avenues, relaxing restrictions on credit union operations, expanding options for investments and accounts, clarifying lending provisions, and eliminating the constraints on auditing and general compliance requirements. GCUA continues dialogue with the Department of Banking and Finance to pursue credit union charter enhancements in 2016 and 2017.

  4. LobbyistsCyber Security

    During the off session there have been multiple study committees of the House and Senate to gain insight into the evolving world of cyber security. While this issue is shaped on a global level and expands beyond the borders of the state, it is one that will be of interest to multiple legislators and lobbyist groups, and several bills should be anticipated on this topic in 2016. While cyber security is of paramount importance to all, the most well-meaning bill can have detrimental operational consequences, and GCUA has already addressed issues pursued by other industries using “cyber security” and fraud as their talking points to push their own interests – interests that would have impacted credit unions.

  5. Foreclosure Process Changes

    Year over year there has been a large volume of bills introduced to alter the foreclosure practices and procedures of this state. There have been attempts to increase the foreclosure period and/or change lending procedures, allow debtors to stay in their homes until a deed under power is filed, some that would have completely overhauled the entire foreclosure process, and attempts to change Georgia to a judicial foreclosure state. This trend will continue, as some legislators believe that it is too easy for financial institutions to foreclose and is unfair to the borrower. Negative foreclosure changes would increase costs on Georgia credit unions as they would directly affect the time and expense of the foreclosure process.

  6. Tax Reform

    During the off session there were several study committee meetings to consider changing state tax to a modified version of a FairTax plan. The most recent hearing was last week on December 11th. There is interest among certain legislators in pursuing proposals to broaden the tax base, just as much as there is concern among other elected officials over doing anything to negatively impact the bond rating for the state. Whether a full FairTax system is pursued, or a combination of lowered income tax and expanded tax on goods, services and digital downloads, remains to be seen. Tax proposals are monitored to protect against any inadvertent change to the credit union tax exemption. And, while taxing some financial services (such as safe-deposit fees) is typical in FairTax attempts, those that would widen it to financial services (tangible and intangible) could create a negative impact on consumer behavior and create undue regulatory burdens.

  7. Gold DomeEBT Cards

    Over the past few years there have been bills that sought to place limits on what can be purchased with state-issued EBT (electronic benefits) cards or how cash value could be accessed. While these bills are directed at preventing individuals using public assistance funds to buy items like tattoos, alcohol, gift cards and tobacco, the restrictions sought would have placed additional burdens on the entities where the cards would be presented, and would have prevented ATM access. EBT legislation, depending upon how it is written, has the potential to increase costs and compliance burdens on credit unions, and creates operational issues.

  8. Defining Financial Institutions and Services

    In more cases than not, the most negative potential consequences of legislation are by mere accident - often when bills are drafted that reference a financial institution or financial transaction, the words “bank” and/or “FDIC” are used. If left unaltered these bills could have detrimental effects on the manner in which credit unions lend, serve members or operate, period. Identifying these issues, often buried in innocuous bills, takes constant review and work, and continual educational efforts during and after the session to increase legislators’ awareness of credit unions and their unique needs (and terminology). GCUA has been engaged with legislators in the off session to proactively improve the definitions in existing law to protect credit unions in their lending operations.

  9. Auto and Boat Lending Procedures: TAVT

    Debate continued in post-session hearings dedicated to potential changes to the TAVT auto tax, as well as possibly bringing boats under the same TAVT and titling process. The TAVT on autos was instituted to replace the annual motor vehicle ad valorem tax, and each year since the change there have been minor changes pursued by the Legislature. Interjected into these fall hearings on the topic has been the possibility of creating a boat titling process for the state.

    When the state originally converted from the birthday tax to the TAVT system, there were unforeseen challenges in some pockets of the state in terms of inconsistent tax valuation by certain county tax offices. Any additional change to the valuation of used autos is monitored closely so that consistent implementation can be achieved and to ensure that credit union auto lending procedures are not impacted. On the idea of boat titling: While the crux of the issue is more on creating a TAVT process for boats (and debate on where funds would be sent between area of purchase, residence, or locale of use), the titling piece is one to monitor to ensure that if passed, lending operations are not impacted.

  10. Superseding Lien Priority

    There will likely be a continued push by other groups to increase the exposure of the financial institution involved in a foreclosure. These attempts have included association assessments and/or the creation of priority lien status for certain obligations such as homeowners associations that want to supersede the priority lien status of credit unions and other financial institutions. This issue was defeated by one vote in a 2015 Senate hearing after GCUA and others testified against it, but its return is anticipated. Superseding the financial institution’s lien priority would directly add to the expense for credit unions of unpaid association dues (which are the obligation of the consumer), and places the secondary mortgage market for Georgia at risk, impacting credit union’s ability to make more loans.

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2015 Grassroots Academy participants
Register Now for State Governmental Affairs Day (Issue 4 of 5)

Registration is under way for the state governmental affairs day for credit unions - the 2016 Grassroots Academy, an all-day immersion in the legislative issues, environment and people that alter how credit unions operate. 

Each year is different (and there are several of you who have attended ALL of them over the years!), and is the opportunity for credit unions to hear firsthand from state leaders on what to anticipate in the Georgia General Assembly and Congress, gain insight into the legislative and political environment, how it can impact the way credit unions in Georgia serve their members, and what credit unions can do to shape their future.

This event is on January 26th downtown across from the Capitol, and the group will travel to the Gold Dome that afternoon to hear from key state legislators (comfortable shoes and a coat recommended!). For more details, speakers, and registration information please click here. Update as of press time – an  additional speaker has been confirmed for the lineup, rounding out what was already a full day: Bill Nigut, Senior Executive Producer over television, radio and news for GPB Media. We are pleased he will join the credit unions at lunch to share his insight and perspective on the political arena, with more than 30 years as a journalist and 20 years of that as the national and state political reporter for Atlanta.

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NewsCredit Unions in the News (Issue 5 of 5)

Credit unions continue to earn media coverage statewide and beyond. Whether it’s in a local newspaper, niche magazine or radio show, the credit union message is shared through a multitude of outlets across Georgia. Click here to see recent coverage of Georgia’s credit unions "In the News."

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