FEBRUARY 19, 2016
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Gold Dome State Legislature on Overdrive
(Issue 1 of 5)

The completion of the 24th day of the state Legislature's session means there are only six days left before "crossover day," the day by which a bill must have passed its originating chamber in order to be eligible to move forward in the legislative process.

  Illustrating Regulatory Burden on Credit Unions (Issue 2 of 5)
A recently released analysis, commissioned by CUNA with the support of state credit union leagues, concludes that the annual regulatory burden on credit unions amounts to at least $7.2 billion.

  GA Congressman David Scott Speaks Out to Protect CU Payday Loan Alternatives (Issue 3 of 5)
Georgia U.S. Rep. David Scott, in a Congressional hearing on a Consumer Financial Protection Bureau proposal on short-term lending, expressed concerns that such regulations would hurt the same consumers CFPB is trying to help.

  Headed to DC for the GAC? Tweet It! (Issue 4 of 5)
Credit union representatives planning to attend CUNA's Governmental Affairs Conference in Washington, D.C., are asked to use Twitter to help others follow along online.

  Credit Unions in the News (Issue 5 of 5)
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.

Gold DomeState Legislature on Overdrive (Issue 1 of 5)

This week the state Legislature held session Tuesday through Friday, working through day 24 of the 40-day schedule. That leaves only six days before the "crossover day" on day 30, which is the point where a bill must pass the full floor of the chamber where it originated (House for House bills, Senate for Senate bills). What this equates to is longer debate sessions on bills, many more hearings, and a fluid process as legislators introduce new bills continuously.

Even as the schedule pace is hectic, GCUA is pleased that the three priority bills for credit unions to pass have already advanced out of their originating chambers, with both the Unauthorized Practice of Law Exemption Clarification (HB 759 by Rep. Wendell Willard (R-Sandy Springs)) and the DBF Housekeeping Bill (HB 811 by Rep. Bruce Williamson (R-Monroe)) awaiting consideration in the Senate Banking Committee, and the Garnishment Process Overhaul (SB 255 by Sen. Jesse Stone (R-Waynesboro)) waiting for a full House floor vote in the near future. Yet there is much more than these three bills to enact positive change for credit unions - overall there are more than 340 separate pieces of legislation that touch the industry being monitored, researched and lobbied on behalf of credit unions. Some of the activity from this week included:

  • On Tuesday, February 16th a House Ways and Means subcommittee heard HB 912 by Rep. Bruce Williamson (R-Monroe) which seeks to create a tax lien digest that will house all tax liens in the state. Sought by the Department of Revenue, this bill is being monitored to ensure that it does not attract negative amendments that could impact the priority lien status of financial institutions.
  • On Wednesday, February 17th the state Senate passed SB 282 by Sen. Jesse Stone (R-Waynesboro), but only after it was amended to remove language of concern to credit unions that would have created a private cause of action against any financial institution that discriminates against a gun retail establishment by refusing or ceasing to serve. The bill now directs the Attorney General’s office to investigate acts of financial services discrimination against the firearms industry. 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. While the bill was amended on the floor due to the concerns expressed by credit unions and others, more work continues, and GCUA is in regular dialogue with the bill’s sponsor and industry groups to create greater protections for credit unions.
  • On Wednesday, February 17th, HB 768 by Rep. Lee Hawkins (R-Gainesville) passed the Ways and Means Committee; this bill seeks to allow Georgia to participate in the new federal program designed to help disabled individuals save for qualified expenses (ABLE accounts). Prior to being heard this week, the tax credit language for depositors was removed from the bill in a February 1st subcommittee meeting, and will just allow Georgia to participate in the federal program.
  • On Tuesday, February 16th, the House Banking Committee heard testimony on 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 passed another hearing on Thursday, February 18th and now travels to Rules.
  • On Wednesday, February 17th the full House passed HB 869 by Rep. Alan Powell (R-Hartwell), which seeks to remove a provision in state law that requires real estate agents to deliver closing statements to sellers and maintain the documents in their files. In discussions with the industry, this bill has been introduced to bring Georgia in line with federal laws with the various changes with mortgage disclosures and privacy requirements. This bill is being monitored closely to ensure that there are no amendments by others alter the mortgage lending process in the state, and passed without unwanted amendments – but will continue to be watched closely to protect credit union lending operations.
  • On Wednesday, February 17th a House Judiciary subcommittee passed 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 and background checks as well as detailed (10 years) record-keeping by the notary, phased in over a period of time. It has been amended multiple times to make it less burdensome on notaries public, and to ensure that regular business operations are not impacted at financial institutions.
  • On Wednesday, February 17th HB 938 by Rep. Brian Prince (D-Augusta) was heard in a House Judiciary subcommittee meeting. This bill seeks to address blighted properties by providing the purchaser of a tax lien the ability to recoup the reasonable cost of upkeep of the property. No vote was taken; however, it is anticipated in another hearing.
  • On Wednesday, February 17th a House Judiciary subcommittee heard an overview of HB 918 by Rep. Chuck Efstration (R-Dacula), which seeks to modernize the power of attorney statutes (including financial power of attorney). The need to curb elder financial abuse was cited as the motive behind the bill. However, the implementation and practical application of the legislation are unclear, as there was concern from the committee members that the bill would tie the hands of financial institutions in speaking out when they see instances of fraud. No vote was taken, but amendments in an upcoming hearing are anticipated and any concerns will be preemptively addressed with the bill sponsor.
  • On Thursday, February 18th, the Senate Judiciary Committee addressed SB 206 by Sen. William Ligon (R-Brunswick). Readers of Creating Influence will recall that 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. After GCUA addressed this concern with Sen. Ligon, he recognized the issue and removed the onerous language from the bill prior to this hearing, as it was not his intent to supersede the priority status of credit unions and other financial institutions. The bill will continue to be monitored through the process.
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PaperworkIllustrating Regulatory Burden on Credit Unions (Issue 2 of 5)

It's one thing to express concern to Congress on the level of regulatory burden we face as an industry, but another to quantify that burden. Being able to illustrate the regulatory impact, the cost of regulation and how it impacts credit unions of various sizes and locales resonates much more strongly with policy makers. And such an analysis was released on Thursday, February 18th; in conjunction with the support of state credit union Leagues, CUNA commissioned Cornerstone Advisors to perform a rigorous analysis of the current financial impact of regulation on credit unions, and how much it has changed since 2010. The results were significant – the study found that the combined effect of increased costs and reduced revenues due to regulation amounted to at least $7.2 billion in financial impact for credit unions!

The full report is available here. This report was shared with all members of Congress this week, as well as the key officials at NCUA and CFPB – right before credit unions descend on Washington, D.C., for the GAC. The timing is ideal, and helps document what credit unions across Georgia have shared with their elected leaders: that credit unions are among the most regulated business in the country, and the amount of regulatory barriers they now face create regular and sometimes extreme challenges to operations!

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U.S. Rep. David Scott
GA Congressman David Scott Speaks Out to Protect CU Payday Loan Alternatives (Issue 3 of 5)

As the Consumer Financial Protection Bureau (CFPB) prepares to release a proposed rule for short-term, small-dollar loans, acting Bureau Deputy Director David Silberman agreed during questioning in a February 11th hearing in Congress that credit union Payday Alternative Loans (PALs) should be exempt from the proposal.

CUNA President/CEO Jim Nussle shared on the stance: "I would like to thank the CFPB for agreeing that the NCUA's PAL program should not be preempted in the forthcoming rulemaking for small-dollar and payday loans during an exchange at today’s hearing with Rep. Denny Heck (D-WA). We also appreciated the CFPB clarifying that it does not intend to disrupt the kind of thoughtful lending that credit unions do in response to a question from Rep. Keith Rothfus (R-PA). We understand this to mean that the CFPB does not plan to sweep consumer-friendly credit union small-dollar loans offered by both federal and state-chartered credit unions into its rule, which would ensure that credit unions' ability to provide safe and affordable alternatives is not inhibited," Nussle added. Heck mentioned to Silberman the role of credit unions and community banks in combating predatory loans, and asked if the bureau would be coordinating with regulators on their approaches.

"The National Credit Union Administration has adopted provisions for what they call Payday Alternative Loans to enable credit unions to make a product they think works. The evidence is a significant number of credit unions are taking advantage of that," Silberman said. "In the outline of the proposals under consideration, we indicated we would allow that to continue as essentially an exception to the general rule." Heck followed up by asking if the potential proposals would not preempt the PAL approach, and Silberman responded with, "Correct."

The NCUA's PAL program allows credit unions to offer short-term, small-dollar loans with a 28 percent  interest-rate cap including application fees, restrictions about how many loans can be taken out in a set period of time, and several other conditions. Many state-chartered credit unions also offer a small-dollar loan option in compliance with their state laws. Georgia Congressman Rep. David Scott (D-13) expressed concerns that the CFPB’s proposal would add a number of regulations that would hurt those consumers it is ostensibly trying to help, by making it harder to access capital.

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TweetHeaded to DC for the GAC? Tweet It! (Issue 4 of 5)

Credit unions are traveling to Washington, D.C., for the annual Governmental Affairs Conference (GAC) which begins on February 20th. For those traveling AND tweeting, please link us @GCUAGov on your posts and utilize the hashtag #CUNAGAC. Not attending, or not a tweeter/instagrammer? You can still check out the event as it unfolds by following @GCUAGov on Twitter.

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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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