FEBRUARY 3, 2017
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Maze Path to Reform: Bill to Rein In CFPB Introduced in Congress (Issue 1 of 5)
A U.S. Senator has introduced a bill that would replace the director of the Consumer Financial Protection Bureau with a five-member board of directors, a change that credit union advocates have lobbied for.

  Early Hearing on Credit Union Priority Bill (Issue 2 of 5)
The state House Banks and Banking Committee held a hearing on the Department of Banking and Finance's housekeeping bill, which includes many provisions suggested by a credit union task force in discussions last year.

  Bill Introduced to Modernize Georgia's Business Judgment Rule (Issue 3 of 5)
A bill introduced in the Georgia Legislature this week would give corporate board members, including members of credit union boards, more protection from charges of "ordinary negligence" in their decision-making.

  No Slowdown in Sight: Week 3 of State Legislative Session at Hectic Pace (Issue 4 of 5)
The Georgia Legislature has reached day 12 of its 40-day session, maintaining its fast pace and dealing with numerous issues that could have an impact on the credit union industry.

  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.

CapitolPath to Reform: Bill to Rein In CFPB Introduced in Congress (Issue 1 of 5)

This week Sen. Deb Fischer (R-NE) introduced a bill in Congress that attempts to institute several credit union-supported changes to the Consumer Financial Protection Bureau (CFPB). This legislation, S. 105, would replace the director of the CFPB with a board of directors composed of five individuals, with each board member appointed by the president and confirmed by the Senate. In addition, the bill directs that the president would appoint one member to serve as chair, and members would each serve staggered five-year terms, with no more than three members from the same political party.

If passed, the legislation would take effect on the date when at least three persons have been confirmed by the Senate to serve as members of the board of directors. Credit unions will recall that CUNA has a national Campaign for Common-Sense Regulation communication to Congress that was launched in January. One of the goals of this campaign was to lobby for a five-person CFPB board – so it is promising to see the bill introduced so quickly!

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Early Hearing on Credit Union Priority Bill (Issue 2 of 5)

HearingOn Wednesday, February 1st the House Banks and Banking Committee debated HB 143 by Rep. Bruce Williamson (R-Monroe). This bill, which is the Department of Banking and Finance’s housekeeping legislation, contains multiple pro-credit union provisions that are a direct result of the department’s dialogue with a credit union task force. Readers of Creating Influence will recall that during the summer months of 2016 there was a credit union task force dedicated specifically to generate ideas for potential improvements to credit union state law, and GCUA is pleased to see the direct output of those meetings incorporated in this bill to reduce compliance burdens and improve the operational environment for credit unions. These enhancements to improve credit union operations include:

  • creating flexibility and enhancements in the audit provisions for smaller credit unions by permitting different forms of audits to be held on a case by case basis.
  • clarifying nonmember deposits to be federally insured,
  • modifying the law governing merger votes to reflect what is in practice (and not require votes of both merging and merged institutions),
  • outlining that businesses headquartered within the field of membership may be eligible for in the same manner as a "person" for membership,
  • adding whole loans to the permissible items for investment, and
  • improving the law that governs real estate property held by the credit union.

The bill also outlines the ability of financial institutions to charge a convenience fee, outlines that a financial institution may operate on Sundays, permits the department to include third-party providers in its examinations, streamlines the calculation for lending limits, and increases the age at which a minor can open an account with a bank.

GCUA is pleased to see this bill move forward so quickly, as the provisions to enhance credit union operations are positive to the industry, and our thanks to the Department for engaging with credit unions and the task force to identify these improvements. Another hearing is anticipated as early as next week, when a vote may be taken on the legislation.

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Bill Introduced to Modernize Georgia's Business Judgment Rule (Issue 3 of 5)

CapitolOver the years in the state Legislature there have been attempts to strengthen general legal protections of businesses, which have been met with strong opposition in the Legislature with few successes. Credit unions have seen this firsthand on financial-related issues (such as the overdraft fee clarification language from 2015 which was a hard-fought and -won battle by credit unions). However, there has been a growing awareness in the Legislature that Georgia should improve its laws that apply to businesses (and less advantageous for increased lawsuits). As such, there has been a collective move afoot by multiple industries led by the Georgia Chamber of Commerce to try to improve the legal climate in Georgia, specifically on expanding the liability protection for board members. This week we saw the introduction of a bill to attempt this: HB 192 by Rep. Beth Beskin (R-Atlanta) on strengthening the business judgment rule for financial institutions and general business. From a credit union perspective, there is no business judgment rule in the law specific for governing credit unions – instead, credit unions are tied directly to the provisions in law governing the bank business judgment rule.

What Rep. Beskin’s bill seeks to do is strengthen the protections of board members from charges of "ordinary negligence" in their decision making, leaving them liable only for gross negligence, fraud or bad faith. In GCUA’s dialogue with Rep. Beskin, she is hopeful for the bill’s passage as she sees this as a problem that needs to be addressed. And while the legislative temperament was not conducive to this last year, 2017 may be the year when there may be collective protections passed – something important to credit unions as there was a recent court case (FDIC v. Loudermilk)that decided that the directors of the bank in question could be liable for ordinary negligence committed in the decision-making process. This legal decision could spill over into all types of businesses, including credit unions. Stay tuned -  this will be a difficult bill to pass given the opposition of the trial attorneys throughout the state and in the Legislature!

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Georgia CapitolNo Slowdown in Sight: Week 3 of State Legislative Session at Hectic Pace (Issue 4 of 5)

The state Legislature was in session this week Monday through Thursday, marking up to day 12 in the 40-day schedule. Legislators have commented privately that the pace and level of issues is high and hectic for this early in the session. This is acutely accurate from a credit union lobbying perspective also, as there are already 130-plus bills that are being tracked and monitored for the industry, and more than 18 hearings and meetings where GCUA was engaged to help protect credit union interests at the Capitol this week alone. Some of the activity of note to credit unions this week included:

  • Real Property: A House Judiciary subcommittee held a hearing on HB 76 by Rep. Rick Jasperse (R-Jasper) on Monday, January 30th and then full Judiciary Committee on Tuesday, January 31st. This bill seeks to enhance the law that changed last year on electronic filing of plats as well as condo plans, and is monitored for multiple property and lien superseding issues. GCUA will continue to watch it through the process to circumvent any issues.
  • Trust Revisions: HB 121 by Rep. Chuck Efstration (R-Dacula) is one of the bills seeking to reform the trust code, this one as it applies to minors, and is monitored to protect against unwanted amendments that could impact credit unions. The bill was heard in a Judiciary subcommittee on Monday, January 30th and in full committee on Tuesday, January 31st, and is pending selection in Rules.
  • Regulatory “FAST Act”: SB 2 by Sen. Mike Dugan (R-Carrollton) was debated in a Senate Economic Development Committee hearing on Tuesday, January 31st. This bill seeks to quicken the process by which new businesses are authorized to operate in Georgia, and seeks to ensure that any examinations are done with ample notice – and that any regulatory rule is approved by the Attorney General’s office. The bill was couched as a reform bill to help small businesses succeed; this legislation will be monitored closely.
  • Disciplinary Actions on Real Estate Appraisers: The House Regulated Industries Committee passed HB 39 by Rep. Alan Powell (R-Hartwell) on January 31st. This bill seeks to clarify the penalties for any real estate appraiser who is found guilty of his or her code of conduct, while providing the flexibility to address extraneous situations. This bill now goes to the Rules Committee for its consideration for the full House, and is monitored to ensure there are no changes that would impact mortgage lending operations at credit unions.
  • Motor Vehicle Issues: While there has been no hearing yet as of press time, there’s been much work and dialogue on HB 150 by Rep. Alan Powell (R-Hartwell). This bill seeks to allow the state to hold a motor vehicle registration if the owner has unpaid tolls, and would provide for an avenue for the state to collect the funds. In dialogue with the bill sponsor we learned that some of these toll debts were upwards of $10,000 – so research has been put forth to ensure that credit unions are not jeopardized in their auto lending procedures. The bill is intended to add toll debts to those that can be recouped through the Department of Revenue through its debt setoff collection via "garnisheeing" income tax refunds. However, it will be monitored closely to ensure that it doesn't change to implicate the title of the vehicle and auto loan.
  • Sales Tax Changes: HB 93 by Rep. John Corbett (R-Lake Park) seeks to alters how businesses that are exempt from sales tax recoup any tax that should not have been paid. This bill, and many others similar in nature, are monitored to ensure that, when the Legislature makes changes to the tax code, it is not implicating credit unions.
  • Wire Transfer Fees: GCUA learned this week that the bill HB 66 by Rep. Jeff Jones (R-Brunswick) has been reassigned to another subcommittee of Ways and Means. This legislation seeks to require a fee on all wire transfers, and this second version of the bill attempts to exempt credit unions from the provisions. However, more work continues as the issue is fluid.

In addition to the above, there were multiple Ways and Means hearings on tax-related issues, and while none of these implicates credit unions at the moment, they are watched closely. There were also several new bills introduced this week that are still pending activity, a fraction of which were:

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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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