MARCH 18, 2016
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Gold Dome Legislation with Positive Provisions for Credit Unions Passes State Senate (Issue 1 of 6)
The full Georgia Senate gave its approval to the Department of Banking and Finance housekeeping bill, but the addition of an amendment means more legislative steps are still needed.

 
     
  Firearms Discrimination Bill Amended to Include Provisions to Protect Credit Unions (Issue 2 of 6)
The Georgia Senate Judiciary Committee passed a bill aimed at preventing discrimination against the gun industry, including an amendment designed to protect the interests of credit unions.

 
  Two More Days Remain of the State Session (Issue 3 of 6)
Only two days are left in the current state legislative session, with the final day scheduled for March 24, but many bills on a wide range of topics remain to be addressed.

 
  75% of U.S. House Members Sign onto CUNA Letter to CFPB to Help CUs (Issue 4 of 6)
A bipartisan group of U.S. Representatives sent the director of the Consumer Financial Protection Bureau a letter asking him to use his authority to exempt credit unions from some provisions of the Dodd-Frank financial-reform law.

 
  Merchant Lawsuit on EMV Chip Rules (Issue 5 of 6)
A merchants' group filed a class action lawsuit agains major credit card companies and large banks, alleging that they conspired to shift liability for fraudulent credit card transactions in the United States to the merchants.

 
  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.

 
 
 
CapitolLegislation with Positive Provisions for Credit Unions Passes State Senate (Issue 1 of 6)

The Department of Banking and Finance's Housekeeping Bill (HB 811) by Rep. Bruce Williamson (R-Monroe) passed the full Senate on Tuesday, March 15th. However, an unrelated amendment was attached on the floor of the Senate when it was debated. As such, the bill still requires a procedural vote or two before it can clear the legislative process. GCUA has spoken to several legislators in these final days answering questions to help keep this bill moving forward. The legislation seeks to make multiple revisions to Title 7 of Georgia law, the section that applies to credit unions, banks and other financial entities. Some of the positive provisions of note to credit unions include:

  • Streamline the federal parity section for credit unions that was successfully procured in 2015,
  • Outline a set process in 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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CapitolFirearms Discrimination Bill Amended to Include Provisions to Protect Credit Unions (Issue 2 of 6)

Readers of Creating Influence will recall all the work and time that has gone into lobbying the Firearms Dealer and Manufacturer Discrimination Act (SB 282)by Sen. Jesse Stone (R-Waynesboro). This is the bill that 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. GCUA has testified and lobbied heavily against the bill in the Senate, and it was amended to remove language of concern to credit unions that would have created a special class of lawsuit 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.

Even with the previous lawsuit language (private cause of action) removed from the bill, lobbying efforts continued on the issue as any gun bill in Georgia has a high likelihood of passing, and additional amendments would be needed to ensure that credit unions are not disadvantaged by membership restrictions or regulatory prohibitions. GCUA testified before the House Banking Committee on Thursday, March 10th to urge the committee to add the credit union amendment if the bill moves forward. While there was no action taken in that committee, the Senate Judiciary Committee added the entire language of SB 282 to another gun bill, HB 1060 by Rep. Rick Jasperse (R-Jasper), in the evening hours of Tuesday, March 15th. GCUA continued to push for the full credit union amendment (the gun industry and some legislators did not want to amend, or only allow an amendment for membership eligibility). We are pleased to share that while the bill passed the committee as expected, the full credit union amendment was included, which outlines that it is not considered discrimination for following law, regulation, or membership restrictions. In addition, the bill was also amended to create parity language between state and federal charters – specifically, if federal regulators pre-empt federal charters from the reach of the bill, state-chartered institutions will be pre-empted as well. As of press time this bill is awaiting selection in Senate Rules for consideration.

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TwoTwo More Days Remain of the State Session (Issue 3 of 6)

As of press time, the state Legislature only has two days remaining in its schedule, with the last day falling on March 24th.

  • The Credit Union Clarification for Lending/Operation Procedures bill, HB 759 by Rep. Wendell Willard (R-Sandy Springs), is presently awaiting selection in Senate Rules Committee for consideration for a vote. The road to keep this bill moving forward has been challenging, as the Senate and House have fallen into strategy moves of blocking legislators’ bills, including Rep. Willard’s, regardless of the content. GCUA continues to lobby for this bill as it is positive for the industry, and helps protect current operations (and thwart attempted lawsuits). More work continues. This bill was introduced 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. Stay tuned!
  • On Monday, March 14th the House Health and Human Services Committee held another hearing on SB 389 by Sen. Hunter Hill (R-Atlanta), a bill directed at ensuring that individuals do not abuse welfare benefits. GCUA has spoken with Sen. Hill on multiple occasions to address a late amendment the bill that referenced not permitting EBT cards to be used at ATMs. Our thanks to Sen. Hill for being receptive to the concerns, as he amended the bill further to ensure that credit unions and others with ATMs are not forced to police the issue, and clarified that the bill is only referencing food stamp benefits, which are not “cash value” cards or accessible at ATMs regardless. The bill presently is awaiting selection out of the House Rules Committee.
  • In the evening hours of Monday, March 14th, the Senate Finance Committee debated a bill that opens the real estate transfer tax provisions, 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 its committee process. It passed in the hearing, and is in Senate Rules awaiting selection – and will continue to be watched closely as the Senate amends bills during the floor debate frequently.
  • Also on Monday, March 14th’s Senate Finance Committee hearing HB 802 by Rep. Sam Teasley (R-Marietta) was passed and is awaiting selection in the Senate Rules Committee. This bill seeks to increase the tax deduction on contributions to 529 savings accounts.
  • On Monday, March 14th the full Senate passed HB 768 by Rep. Lee Hawkins (R-Gainesville); this bill seeks to allow Georgia to participate in the new federal program designed to help disabled individuals save for qualified expenses (ABLE accounts). In the hearing process prior, the tax credit language for depositors was removed from the bill and will just allow Georgia the opportunity to participate in the federal program.
  • The Garnishment Process Overhaul Bill (SB 255)by Sen. Jesse Stone (R-Waynesboro) was debated again in two House Judiciary Committee hearings on Monday, March 14th and Tuesday March 15th when it passed and moved onto the House Rules Committee. 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). We are pleased to share that before the bill was passed, one final amendment was added, to provide credit unions and other financial institutions more time to respond to garnishment notices on accounts. The bill originally stated 24 hours to assess the account, and it now has changed to allow five days to check the account and another 10 days to respond. This bill is slated to receive a full House vote on Tuesday, March 22nd and GCUA continues to work to ensure that what is being sought by the Legislature is not changed to become burdensome, nor change the law to suddenly require that only attorneys to be utilized in responding to garnishments.
  • On Tuesday, March 15th the full House passed SB 206 by Sen. William Ligon (R-Brunswick). This bill addresses water liens, specifically on commercial property that are unknown to the new owner/tenant. The bill has been monitored to protect credit union lending operations, as it has seen more amendments than any bill monitored. The bill provides an avenue for a purchaser to uncover whether there are any liens on the property, and an avenue to extinguish those liens if they are not shared at the onset. The bill has been sent back to the full Senate for a procedural vote before it can clear the legislative process.
  • On Wednesday, March 16th the full Senate passed HB 238 that was introduced by Rep. Ben Harbin, who retired in 2015 and is no longer at the Capitol. More interestingly, the Senate struck the entire text of the original bill and replaced it with SB 280, which is the tax reform legislation by Sen. Judson Hill (R-Marietta) that seeks to cap the mortgage interest deduction to pay for a personal income tax cut on individuals. This is a prime example of how anything can and does change in the final days of the session! The bill now moves back to the House; however, it is anticipated that it will not accept the Senate’s changes.
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Capitol75% of U.S. House Members Sign onto CUNA Letter to CFPB to Help CUs (Issue 4 of 6)

A bipartisan group of 329 members of the U.S. House sent a letter on March 14th to Consumer Financial Protection Bureau (CFPB) Director Richard Cordray urging the bureau to use its rulemaking exemption authority to protect credit unions and other community-based financial institutions from provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank).

The letter by Reps. Adam Schiff (D-CA) and Steve Stivers (R-OH) has garnered overwhelming support from both sides of the aisle and was an effort pursued by credit unions, Leagues and CUNA. GCUA is pleased that 100 percent of the House members from Georgia signed onto the letter at its request to help seek regulatory relief for credit unions.

This letter was well timed, as CFPB's Cordray testified on Wednesday, March 16th before the U.S. House Financial Services Committee, where he was questioned repeatedly about not using the CFPB’s exemption authority to help small financial institutions. Cordray had said to the nearly 5,000 credit union advocates attending the CUNA GAC last month that he believes the bureau cannot exempt credit unions from certain rulemakings. CUNA notes this letter to Cordray is a clear signal that three-quarters of the House of Representatives believe he is wrong, something that was reiterated in the Congressional hearing. The lawmakers' letter cites a section of Dodd-Frank that states the CFPB has the authority to adapt regulations by allowing it to exempt “any class” of entity from its rulemaking and asks the CFPB to ensure that its regulations do not have the unintended consequences of limiting services or increasing costs for credit union members.

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EMV cardMerchant Lawsuit on EMV Chip Rules (Issue 5 of 6)

Merchants have filed a class action, antitrust lawsuit against major credit card companies and some of the nation's largest banks. It charges that the defendants "conspired to shift billions of dollars in liability" for fraudulent credit card transactions in the United States to merchants. The suit revolves around an Oct. 1, 2015, deadline for merchants to set up card-reading systems that can accept cards with EMV-chip security technology. EMV cards contain a microchip that generates a new number every time the card is used at a pay terminal, making skimming – stealing the card’s information using an illegitimate card reader – almost impossible.

Under the EMV rules, merchants failing to meet the deadline now face liability for fraudulent charges that were previously covered primarily by card issuers. The lawsuit complains that class member merchants have been "unlawfully subjected" to the liability shift "despite having purchased EMV-chip compliant point of sale card readers" and having "otherwise complied." The lawsuit was filed last week in the U.S. District Court Northern District of California San Francisco Division.

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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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