FEBRUARY 12, 2016
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Two Positive News on Two Priority Bills for Credit Unions in State Legislature
(Issue 1 of 6)

Two bills of importance to the credit union industry cleared major hurdles this week as one was passed unanimously by the state House and the other got the approval of the full Senate.

  DBF Housekeeping Bill Passes House (Issue 2 of 6)
The state House of Representatives passed the Department of Banking and Finance's housekeeping bill, which includes several provisions relevant to the operations of credit unions.

  20 Days Down, 20 to Go: State Session on a Fast Track
(Issue 3 of 6)

The state Legislature has reached the halfway point in its 40-day session, and while some victories have been achieved, more work remains to protect industry interests in the rest of the session.

  Addressing Bankers' Push in D.C. to Halt FOM Improvements (Issue 4 of 6)
The president and CEO of the Credit Union National Association wrote to the leadership of the Senate Ways and Means Committee to counter the banking industry's comments on proposed changes in NCUA's field of membership rules.

  Credit Union Legislative Night (Issue 5 of 6)
Georgia credit union leaders boosted industry influence with legislators and other elected and appointed officials at a reception held in conjunction with Affiliates board meetings.

  Credit Unions in the News (Issue 6 of 6)
The credit union message continues to spread, as evidenced by coverage of the industry in a wide range of media outlets, from newspapers to magazines to the broadcast media.

LegislaturePositive News on Two Priority Bills for Credit Unions in State Legislature (Issue 1 of 6)

Great news for credit unions – this week two of the priority bills for the industry passed a major legislative hurdle with a full floor vote, one in the Senate and the other in the House:

  • On Monday, February 8th the Credit Union Clarification for Lending/Operation Procedures bill, HB 759  by Rep. Wendell Willard (R-Sandy Springs), passed the full House unanimously! Our thanks to all 156 of the Representatives in the House voting that day who supported the bill and moved it forward. The bill now travels to the Senate, which has taken the informal posture of not hearing House bills. However, GCUA continues to lobby Senators to help continue the bill’s forward progress. This legislation was introduced specifically to clarify that credit unions are included by definition in the unauthorized practice of law exemption for financial institution operations (this is the exemption that allows credit unions to lend, initiate HELOCs, discuss issues with members, or address compliance issues without an attorney present). From an operational standpoint credit unions have been treated as though they were included in the exemption – however, by the letter of the law, they are not. This bill was introduced by Rep. Willard at the request of GCUA to proactively improve the definition in existing law, and help clarify it to protect credit unions in their operations.
  • On Tuesday, February 9th the Garnishment Process Overhaul Bill, SB 255 by Sen. Jesse Stone (R-Waynesboro), also passed the full Senate unanimously! This bill seeks to correct Georgia’s garnishment process, and is a priority for Georgia credit unions to pass. In 2015 a federal judge ruled the garnishment statute unconstitutional in the state, thereby halting ALL garnishments altogether in some counties, and spreading to more areas of Georgia. This will be a rewrite of how garnishments are processed in Georgia, so please note that changes are to be expected in your credit union’s operational procedures of when you respond, how you respond, and what new notices need to be provided (as the case centered around the lack of notice to consumers). However, throughout the session GCUA continues to work to ensure what is being sought by the Legislature is not burdensome, and does not change the law to suddenly require that only attorneys to be utilized in responding to garnishments.
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Gold DomeDBF Housekeeping Bill Passes House
(Issue 2 of 6)

On Thursday, February 11th the Department of Banking and Finance's Housekeeping legislation, HB 811 by Rep. Bruce Williamson (R-Monroe), passed the full House and now travels to the Senate. This bill seeks to make multiple revisions to Title 7 of Georgia law, the section that applies to credit unions, banks and other financial entities in the marketplace. GCUA fielded several questions in the Capitol on the bill, and spoke with legislators to help address uncertainties they had beforehand to help move the bill and the positive changes it seeks to make forward. These changes include:

  • Remove references to entities that no longer exist (building and loan associations),
  • Streamline the federal parity section for credit unions that was successfully procured in 2015,
  • Outline a set process by which a credit union could remove or suspend a director,
  • Create a basis for the department's purview over virtual currency,
  • Outline a procedure for credit unions to hold real estate in specific instances subject to a majority vote of its directors without prior approval of the department, and
  • Remove prohibitions for state-chartered institutions against a fee for checks drawn on that institution.
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20 Days Down, 20 to Go: State Session on a Fast Track (Issue 3 of 6)

LegislatureAs of Thursday, February 11th the state legislative session is at the halfway point, with 20 days in and 20 more to go. But while it has been fast, it has also been an intense flood of activity for the industry that no one could have anticipated, with issues upon issues, and multiple bills introduced daily that require monitoring and tracking, researching and lobbying any number of legislators in a given day. Committee hearing activity of interest from this week includes:

  • On Monday, February 8th a House Judiciary subcommittee met to discuss HB 381 by Rep. Andy Welch (R-McDonough). This bill seeks to overhaul the process by which one becomes a notary public, and would require training, background checks as well as detailed (10 years) record-keeping by the notary. This is the second hearing on the bill, and they did not take action yet, but it is anticipated to go through more amendments and be addressed in the near future.
  • On Monday, February 8th the full Senate passed SB 283 by Sen. John Kennedy (R-Macon). This bill, concerning the state Treasury, seeks to make a technical adjustment to the formula for large dollar pools of public funds (such as UGA’s deposits) due to Basel III changes. It now travels to the House.
  • On Tuesday, February 9th the Senate Judiciary Hearing was to address SB 206 by Sen. William Ligon (R-Brunswick). This bill contained a problematic provision that would automatically provide public and private water facilities the ability to supersede the priority lien status of credit unions and other financial institutions, putting your credit union on the hook for unpaid water bills of any residential or commercial property you foreclosure. On Monday evening, GCUA sat down to speak with Sen. Ligon on the concern, and he immediately recognized the issue and committed to fix the bill, as it was not his intent. Our thanks to Sen. Ligon for his help; the bill was removed from the hearing schedule, but will be monitored when it comes up in the future.
  • On Tuesday, February 9th GCUA testified in a Senate Banking hearing on concerns with SB 282 by Sen. Jesse Stone (R-Waynesboro). This bill seeks to create a private cause of action against any financial institution that discriminates against a gun retail establishment by refusing to serve (or ceasing to serve). This bill is being pursued by the gun industry in states around the country to send a message to the federal government and regulators against "Operation Choke Point" actions. If Georgia passes this state legislation, it would impair a credit union's ability to make a business decision, and would place financial burdens on credit unions to prove that they were not discriminating, even if the reason for refusal to serve had to do with field of membership or MBL constraints. The Senate passed the bill, but several legislators have expressed concerns on the legislation brought up in testimony. More work continues.
  • On Wednesday, February 10th the Senate Science and Technology Committee met to discuss cybersecurity, and to hear a presentation of the revamped SB 276 by Sen. John Albers (R-Roswell). This bill seeks to set provisions and time frames for notifying consumers in the event of a data breach, and has provisions for those companies who are already regulated for this. These bills are desirable vehicles to those industries who seek to mandate chip-and-PIN cards at Georgia financial institutions, and while the topic came up in the hearing, there is no mandate language in the bill on cards. But, the issue is being monitored closely to protect credit unions.
  • On Wednesday, February 10th the Special Joint Senate/House Committee on Revenue Structure met to discuss tax reform proposals. Readers of Creating Influence will recall that there were several off-session study committee meetings held by the Senate on tax reform; seeking to lower the income tax rate for the state and eliminate or reduce several deductions to “pay” for the lower state tax rate. No action was taken on any bill, but this issue will continue to be watched carefully.
  • On Thursday, February 11th the House Judiciary Committee met to discuss the Garnishment Process Overhaul Bill SB 255 by Sen. Jesse Stone (R-Waynesboro). GCUA is pleased to see this bill get traction so quickly on the House side, and anticipates it may be one of the first bills to make it completely through the Legislature. Stay tuned.
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U.S. CapitolAddressing Bankers' Push in D.C. to Halt FOM Improvements (Issue 4 of 6)

For the past several editions of Creating Influence, the importance of all credit unions to engage in the call to action to support NCUA’s field of membership (FOM) proposal has been reiterated. And this week illustrated precisely why your voice was needed: CUNA President/CEO Jim Nussle wrote to national tax policy leaders on Tuesday, February 9th to refute the bankers’ message to Congress of why and how credit unions exist and operate. Nussle's letter to Senate Finance and House Ways and Means Committee leadership came as a response to a Feb. 5 letter from the American Bankers Association involving the NCUA FOM proposal.

"The NCUA proposal that the bankers are so concerned with would further facilitate the fulfillment of the credit union mission. It would update current rules that are outdated and filled with burdensome processes and requirements. The proposal is clearly within the scope of the Federal Credit Union Act, which gives the NCUA board authority to promulgate implementing regulations. In our view, the proposal is not only well within the scope of the law but it does not go nearly as far as regulations, which were on the books between 2003 and 2010, and as we outline in our comment letter on the proposal, we believe NCUA could go much further to facilitate consumer access to credit unions than they have," Nussle added.

In addition to inaccuracies about the FOM proposal, the bankers' letter attempts to tie it to the unrelated issue of the credit union tax status. Nussle said credit unions' tax status is "very good public policy" because credit union members and nonmembers alike see more than $10 billion each year in benefits as a result of how credit unions operate. "The bankers’ true motivation is the elimination of credit unions in the marketplace. If the federal tax status were reversed conventional wisdom suggests that many credit unions would convert charters and operate as banks, unfettered by the many charter restrictions credit unions now face, and available to be acquired by larger banks," Nussle wrote. "This would represent a failure of public policy because credit unions provide a market alternative that helps moderate increases in bank fees and charges for all consumers," he added. "Without credit unions, consumers would be greatly disadvantaged, and in some cases, be forced out of the financial mainstream."

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ReceptionCredit Union Legislative Night (Issue 5 of 6)

On Tuesday, February 9th, credit union leaders spent time sharing their insight and thanks with members of the state Legislature, growing influence for the industry at a reception held in conjunction with the February League and GCUS Board Meetings, as well as the Advocacy Policy Committee and GA CUPAC Trustees meeting. This event has become a perennial favorite of legislators, who joined the credit union leaders despite the arctic air and threat of snow – sharing that it is something they do not want to miss. Joining credit unions and the legislators were several statewide elected constitutional officers, as well as top ranking officials from the Department of Banking and Finance: Commissioner Kevin Hagler, Deputy Commissioner Lori Godfrey and Deputy Commissioner/Legal Counsel Bo Fears. Our thanks to them for sharing so much of their time and insight. The goal of this evening is to create the opportunity to connect with these individuals, build relationships with legislators, and weave in support for the above mentioned credit union bill HB 759. Our thanks to the credit union board and committee members in attendance; you helped grow the level of connections for the industry and excelled!

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NewsCredit Unions in the News (Issue 6 of 6)

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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