MARCH 4, 2016
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Calendar State Session: Nine Days Remaining for the Big Issues for CUs (Issue 1 of 5)
With only nine days left in this year's session of the Georgia Legislature, there are still several bills active that represent important issues for the state's credit union industry.

  Crossover Day Aftermath at State Session (Issue 2 of 5)
Several bills of interest to Georgia's credit union managed to advance out of their originating chambers by the end of the 30th day of the session, or Crossover Day as it is sometimes called.

  13 of the 14 Georgia Congressional Reps Join CFBP Letter! (Issue 3 of 5)
Almost all of Georgia's U.S. Representatives signed onto a letter to the Consumer Financial Protection Bureau encouraging that agency to use its discretion and exempt credit unions and community banks from some of its rulemaking process.

  Cybersecurity Information Sharing Act Guidelines (Issue 4 of 5)
The U.S. Department of Homeland Security (DHS) and the Department of Justice released interim guidance documents to implement the Cybersecurity Information Sharing Act of 2015 (CISA).

  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.

State Session: Nine Days Remaining for the Big Issues for CUs (Issue 1 of 5)

Georgia CapitolThe state Legislature was in session for day 30 and 31 this week, leaving only nine days remaining before the end (see related article below on day 30 and what that equates to in the Legislature). The last days of the session are anything but tame; the Legislature only gains more intensity on the downward slope to the finish line. From a credit union perspective, it will be all the more imperative to have a vigilant presence in hearings as bills will likely get amended quietly in the process as other interests push to get their issues passed. And that’s in addition to all the efforts to push credit union issues forward, and work to mitigate negative issues.

The Legislature will be in four days next week, with more hearings likely even on the “off” day; watch for it to be a heavy week of issues. In the midst of the myriad of bills being considered each day in the legislative process, there are four significant bills for credit unions expecting activity:

  • The Credit Union Clarification for Lending/Operation Procedures bill: HB 759 by Rep. Wendell Willard (R-Sandy Springs) had passed the full House prior to day 30, and is awaiting a hearing in the Senate Banking Committee, tentatively set for Tuesday March 8th. GCUA continues to lobby Senators to help continue the bill’s forward progress as it 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.
  • The Garnishment Process Overhaul Bill: SB 255 by Sen. Jesse Stone (R-Waynesboro) was one of the first bills to pass the Senate, and had been heard and passed a full House Judiciary Committee prior to day 30 also – but was recommitted to the committee for additional amendments forthcoming. 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 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). GCUA continues to work to ensure that 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.
  • The Department of Banking and Finance's Housekeeping Bill: HB 811 by Rep. Bruce Williamson (R-Monroe) previously passed the full House as well as a Senate Banking Committee prior to day 30, and awaits selection in the Rules Committee. 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 is pleased at how quickly the bill moved in the Senate, as it contains several positive provisions for credit unions, some of which include:
    • 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 a credit union 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.
  • Firearms Dealer and Manufacturer Discrimination Act: SB 282 by Sen. Jesse Stone (R-Waynesboro) passed the full Senate prior to day 30, 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, which is anticipated to have a hearing in the House Banking Committee soon, 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 due to the concerns expressed by credit unions and others in the Senate, more work continues and GCUA is in regular dialogue with the bill’s sponsor, industry groups, and House Banking Committee members to create greater protections for credit unions.
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LegislatureCrossover Day Aftermath at State Session (Issue 2 of 5)

On Monday, February 29th the state Legislature was in session for day 30, otherwise known as “crossover day.” This day is the deadline by which a bill must pass its originating chamber to have the ability to move forward as a stand-alone bill, and as such the Legislature was debating bills past 9:00 pm that evening. GCUA was on hand the entire time, monitoring the various bills that have the potential to impact credit unions and lobbying legislators on the issues. And while most of the issues of interest to credit unions had already successfully navigated past for day 30 (or stalled previously), some of the bills of interest that passed either the Senate or the House on that day include:

  • Real Estate Transfer Tax: The House passed a bill on February 29th that has been monitored by GCUA through the process continually as it opens the section of code pertaining to the real estate transfer tax – HB 364 by Rep. David Knight (R-Griffin). This bill has been watched closely throughout 2015 and the 2016 committee process to ensure that it did not change any provisions for credit unions, and is being utilized instead to address incorrect taxation on airport vendors. It now travels to the Senate to be considered in their committee process.
  • Liens: The Senate passed a bill on February 29th that has been watched closely through the process to protect against additional lien burdens – SB 206 by Sen. William Ligon (R-Brunswick). This bill originally 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 a credit union on the hook for unpaid water bills of any residential or commercial property in 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. It is clear that this bill will continue to attract additional amendments from other industries, as it has been amended several times to ensure that cities and counties can still place a lien on commercial property (as they do today), but will be monitored through the process as amendments are anticipated as it is heard in the House committee process.
  • Property: The House passed HB 1004 by Rep. Rick Jasperse (R-Jasper) on February 29th; this bill seeks to modernize the way in which clerks of court process information. It pertains to the records filed at the court and opens provisions that apply to condo associations as well as normal mortgage lending. It will continue to be monitored to protect against anything that would impact credit unions.
  • Notaries: The House passed HB 381 by Rep. Andy Welch (R-McDonough) – but not before they amended it on the floor to lessen the requirements set forth in the bill. 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, but was amended to institute the record-keeping requirement only for instances of electronic signature notarizations. Throughout the process the bill has been amended multiple times to make it less burdensome, and to ensure that regular business operations at financial institutions are safe.
  • EBT Cards and ATMs: The Senate passed SB 389 by Sen. Hunter Hill (R-Atlanta), a bill originally directed at ensuring that individuals do not abuse their welfare benefits. However, in a late amendment, the bill was altered to state that ATMs could not be utilized to access the EBT cards. GCUA has spoken with Sen. Hill, who acknowledges the issue the bill creates by placing burdens on the ATMs to police the issue. Work continues, stay tuned.

The above represents a handful of issues that passed their chambers by crossover, and can keep moving. However, there were several bills that did not make it past crossover day, leaving their chances of becoming law slim. These bills could move forward in topic, as bill contents could be inserted into another bill – but as stand-alone bills they cannot move forward. And while high-profile issues such as  opening up Georgia to casinos failed to pass by the deadline, some of the issues monitored on behalf of credit unions are left in the wake of crossover day:

  • Boat Titling: HB 356 by Rep. Ron Stephens (R-Savannah) sought to bring boats under the same TAVT and titling process as the state has with autos. All of the debate on the bill centered on TAVT issues and concerns of where TAVT funds would be sent between area of purchase, residence or locale of use – and proved to be too much weight for the bill. The issue will continue to be monitored to ensure that if boat titling does pass in a related bill, lending operations are not impacted.
  • Blighted Properties: SB 422 by Sen. JaNice VanNess (R-Conyers) arose last week, and appears to be a priority issue for the Senator. The bill would force upkeep of neglected properties, outlines prescriptive requirements for the owner and directs the county to pay for any noncompliance upkeep, and then place a lien and/or foreclose on the property. On the day the bill was introduced, Sen. VanNess procured a quick hearing; however, it did not move forward. Since then, Sen. VanNess has introduced two separate study committee resolutions that, if passed, would create the window for legislation similar to this to pass in 2017.
  • Power of Attorney: HB 918 by Rep. Chuck Efstration (R-Dacula) and SB 397 by Sen. Judson Hill (R-Marietta) both seek to modernize the power of attorney statutes (including financial power of attorney). Curbing elder financial abuse was cited as the motive behind the bills. However, the implementation and practical application of the legislation creates operational issues for credit unions and other financial institutions, as it would tie the hands of financial institutions in speaking out when they see instances of fraud. Neither bill moved forward, but potential “vehicles” where this language could be added will be monitored.
  • Tax Executions: This session there have been multiple bills that seek to change the law on tax executions, creating a tax lien digest, or regulate on how property is handled and who’s responsible for funds. From a credit union perspective these were monitored and any issues that would impact credit unions addressed. However, all but one failed to move forward. There was HB 938 by Rep. Brian Prince (D-Augusta) which 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. It did not move past the House Judiciary Committee process. HB 653 by Rep. Don Parsons (R-Marietta) did not pass a House Ways and Means hearing once it was uncovered that the intent was to allow a private debt collector the ability to supersede all liens (including those of financial institutions), and HB 912 by Rep. Bruce Williamson (R-Monroe) which sought to create a tax lien digest that would house all tax liens in the state, failed to move forward in the House Ways and Means committee process. Out of the tax liens bills, there’s just one remaining: HB 51 by Rep. Tommie Benton (R-Jefferson), which passed a Senate hearing in January and has been sitting in Senate Rules waiting selection. The bill, introduced last year, 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. Along with the tax lien bills that did not pass, it continues to be monitored closely as it is a vehicle for homeowner associations’ superseding lien language to try to require foreclosing parties to pay past-due fees.
  • Cybersecurity: This was an issue that received a lot of attention in the off session, with multiple hearings during the summer and fall. The main vehicle for creating state-level cybersecurity requirements this session was 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. This bill stalled in the committee process. However, there will likely be more study hearings in the off session on the issue and it will continue to be monitored. The topic creates the avenue for those industries who seek to mandate chip-and-PIN cards at Georgia financial institutions.
  • Tax Reform: 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 (including the mortgage interest deduction) and eliminating the mortgage insurance and real estate taxes deduction to “pay” for the lower state tax rate. The Senate Finance Committee had passed SB 280 by Sen. Judson Hill (R-Marietta) which was the outcome of those off-session hearings; however, it did not pass the full Senate by crossover. There are several bills that passed that could be amended with this language, so the issue of tax reform will continue to be watched carefully.
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U.S. Capitol13 of the 14 Georgia Congressional Reps Join CFBP Letter! (Issue 3 of 5)

The last edition of Creating Influence highlighted credit unions’ efforts during the GAC to persuade members of Georgia's Congressional delegation to sign onto a letter to the Consumer Financial Protection Bureau. This list has grown; as of press time, 13 of the 14 Congressional Representatives from Georgia have signed onto the letter to encourage the CFPB to utilize its discretion and exempt credit unions and community banks from some of their rulemaking process. These individuals are: Representatives Buddy Carter (R-1), Sanford Bishop (D-2), Lynn Westmoreland (R-3), Hank Johnson (D-4), John Lewis (D-5), Rob Woodall (R-7)Austin Scott (R-8), Doug Collins (R-9), Jody Hice (R-10), Barry Loudermilk (R-11), Rick Allen (R-12), David Scott (D-13) and Tom Graves (R-14). Our thanks to almost the ENTIRE Georgia Congressional delegation in the House for or signing onto this "Dear Colleague" letter to push for fewer regulatory burdens from the CFPB!

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SecurityCybersecurity Information Sharing Act Guidelines (Issue 4 of 5)

Both the U.S. Department of Homeland Security (DHS) and the Department of Justice released interim guidance documents to implement the Cybersecurity Information Sharing Act of 2015 (CISA). The bill requires both agencies to establish a voluntary information-sharing process to encourage sharing of cyber threat information between the government and the private sector. The documents address the requirements for sharing information with the DHS National Cybersecurity and Communications Integration Center, which shares information among public and private sector partners to build awareness of vulnerabilities, incidents and mitigations. Cyber and industrial control systems users can subscribe to information products, feeds and services at no cost. The documents include:

  • Guidance to assist non-federal entities to share cyber threat indicators and defensive measures with federal entities under CISA;
  • Sharing of cyber threat indicators and defensive measures by the federal government under CISA;
  • Interim procedures related to the receipt of cyber threat indicators and defensive measures by the federal government; and 
  • Privacy and civil liberties interim guidelines.

Credit unions and other entities can share information through the DHS website, by email to DHS and by DHS’s Automated Indicator Sharing resource

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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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