FEBRUARY 17, 2017
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Good news Credit Union Regulatory Improvements Bill Passes House Early! (Issue 1 of 6)
A credit union-supported bill with several measures that would provide regulatory relief for the industry passed the full Georgia House and is headed for the Senate for consideration.

  Prize-Linked Savings Bill Passes Senate Committee
(Issue 2 of 6)

The Georgia Senate Banking Committee gave its OK to a bill that would allow credit unions to offer prize-linked savings accounts, which advocates hope would help promote better savings habits.

  State Legislature at Halfway Mark: 20 More Days to Go for Multiple Issues of Interest (Issue 3 of 6)
The state legislative session has reached the halfway mark in its 40-day schedule, and the "crossover day" by which bills need to pass their originating chambers has been moved up to day 28, from day 30.

  Credit Union-Backed Regulatory Relief Bill Introduced in Congress (Issue 4 of 6)
A U.S. Senator from South Dakota introduced a bill, supported by the credit union industry, that would require regulators to take risk into account when promulgating regulations.

  Secretary Price Now Confirmed – What Next for His Congressional Seat? (Issue 5 of 6)
Former U.S. Rep. Tom Price's resignation to assume a Cabinet post means a special election will need to be held to fill his House seat, and 18 people are already in the running.

  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.

Credit Union Regulatory Improvements Bill Passes House Early! (Issue 1 of 6)

LegislatureOn Tuesday, February 14th a priority bill for credit unions took a big step forward when it passed the full House. HB 143 by Rep. Bruce Williamson (R-Monroe), the Department of Banking and Finance’s housekeeping legislation, passed with a vote of 166 to 1, and is one of the few bills that have moved over to the Senate. This legislation contains multiple positive provisions for credit unions that are a direct result of their dialogue with a credit union task force that met in the summer of 2016. The 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.
  • clarify 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 “working” to the eligible criteria for field of membership (when an individual is working in the approved geographic area),
  • adding whole loans to the permissible items for investment, and
  • improving the law that governs fixed assets/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 their examinations, streamlines the calculation for lending limits, and increases the age in which a minor can open an account with a bank (but no changes to the law governing minor accounts at credit unions). The bill must go through the committee process on the Senate side before successfully becoming law.

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LegislaturePrize-Linked Savings Bill Passes Senate Committee (Issue 2 of 6)

On Wednesday, February 15th another positive bill for credit unions took a step forward in the process: the "Save Earn Win Bill" SB 134 by Sen. David Shafer (R-Duluth) passed the Senate Banking Committee and is now awaiting selection by the Senate Rules Committee for a vote. This bill, an issue addressed by GCUA for the past several months with Sen. Shafer, seeks to institute the ability for credit unions and banks to offer prize-linked savings accounts. There are more than 20 states where these accounts are offered, and through this bill GCUA is seeking to add this option for Georgia credit unions, without any mandates or added compliance burdens. And while the bill passed the committee, there is still much work to be done to keep the bill moving forward.

If passed this bill would allow Georgia credit unions, if they so choose, to offer a savings account that offer a "sweepstakes" component (such as the Save to Win program). This type of account would set entries into a sweepstakes for every predetermined amount saved by the member, encouraging savings habits and helping individuals of all walks of life build some sort of savings. This bill seeks to make a dent in the negative statistics of how few Americans could handle an unexpected $400 emergency, encourage individuals to even have a savings balance, and strengthen the ability of credit union members to have positive financial behaviors with other credit union products and services.

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20 daysState Legislature at Halfway Mark: 20 More Days to Go for Multiple Issues of Interest (Issue 3 of 6)

As of press time, the state Legislature is now at day 20 and at the halfway mark in the 40-day schedule. The session itself is set to run until March 30th, and the “crossover day” by which bills must pass their originating chamber has moved up from day 30 to day 28, thereby shortening the window of time in which bills need to move. However, the activity of this week showed no slowing, with multiple hearings and bills of interest to credit unions. As of press time there are more than 200 bills being monitored on behalf of credit unions. A sampling of activity of note (in addition to the above):

  • SB 87 by Sen. Jesse Stone (R-Waynesboro), which seeks to adjust the bankruptcy code on how certain debts are discharged, passed the full Senate on Tuesday, February 14th.
  • HB 204 by Rep. Brett Harrell (R-Snellville), which seeks to ensure that tax bills only contain taxes and do not contain any fees for ancillary services, passed Ways and Means subcommittee on Tuesday, February 14th.
  • HB 327 by Rep. Jay Powell (R-Camilla) seeks to make changes to the TAVT law for autos, including how the fair market value of used cars is calculated. The bill seeks to correct some issues in how leases are taxed, and places used cars at the same tax calculation as new cars (the higher of book or retail price). The bill was debated at length, and another hearing is anticipated.
  • HB 337 by Rep. Bruce Williamson (R-Monroe) was introduced this week, and seeks to create a statewide tax lien registry. Previous discussions on the bill wrapped in the possibility of all liens; however, as drafted, it will only apply to tax liens, but will be monitored closely so as to protect lending operations at credit unions.
  • HB 329 by Rep. Jay Powell (R-Camilla) seeks to change the state income tax rate to 5.4 percent and will be monitored closely, as any tax reform measure opens the opportunity for other changes.
  • SB 2 by Sen. Mike Dugan (R-Carrollton) passed the Senate Economic Development Committee.  Deemed the regulatory “FAST Act,” it 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.
  • SR 222 by Sen. John Albers (R-Alpharetta) seeks to create a study committee to review all tax exemptions in Georgia. This will be monitored closely to protect the interests of credit unions.
  • HB 357 by Rep. Ron Stephens (R-Savannah) was introduced this week, and attempts to institute a boat titling process in Georgia. Versions of this bill have been introduced the past several years, and this one will be reviewed and monitored closely to ensure that if this version passes, it is operationally sound for credit union lending.
  • HB 353 by Rep. Brett Harrell (R-Snellville) was introduced this week, and seeks to regulate title pawn transactions and allow for an installment loan that can be paid monthly, as opposed to a one-time payment.
  • HB 381 by Rep. John Corbett (R-Lake Park) was introduced this week to regulate how abandoned and/or derelict mobile homes are handled by municipalities, and is monitored closely to ensure that lien-holders are not penalized in the process.

And while the second hearing for HB 192 by Rep. Beth Beskin (R-Atlanta) is still pending, one is anticipated on Monday of next week. This is the credit union-supported bill that seeks to strengthen the business judgment rule for financial institutions and general business – specifically to 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. This bill is in reaction to the 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. As credit unions are also subject to the same business judgment law, this legal decision has ramifications on credit unions (as well as all types of businesses), and this bill seeks to set the bar of liability back to where it was perceived to be before the court case – back to gross negligence.

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Cherry blossomsCredit Union-Backed Regulatory Relief Bill Introduced in Congress (Issue 4 of 6)

Sen. Mike Rounds (R-SD) introduced a CUNA-backed regulatory relief bill on February 14th that would require regulators to take risk into account when promulgating regulations. The Taking Account of Institutions with Low Operation Risk (TAILOR) Act (S. 366) would reduce regulatory burden for financial institutions with lower risk profiles, and CUNA wrote a letter of support, as tailored regulations are among the goals of the credit union Campaign for Common-Sense Regulation.

The legislation would apply to the NCUA and the Consumer Financial Protection Bureau, as well as other federal financial regulatory agencies. It would require them to take into consideration the risk profile and business models of individual financial institutions and tailor regulations accordingly. Additionally, S. 366 requires regulators to:

  • Provide an annual report to Congress outlining the steps they have taken to tailor their regulations; and 
  • Conduct a review of all the regulations issued by the agencies since the 2010 passage of the Dodd-Frank Act. If the review finds that the regulations do not conform to the TAILOR Act, the agency would be required to revise the regulations.
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SignSecretary Price Now Confirmed – What Next for His Congressional Seat? (Issue 5 of 6)

The opportunity to run for an open Congressional seat only happens on occasion, and when it does, there are consistently a large number of candidates that opt for the opportunity. And with previous U.S. Rep. Tom Price (R-6) officially confirmed late last week as Secretary of the Department of Health and Human Services in Washington, D.C., his departure created an opening for a special election and quick influx of “campaign season” for the Congressional seat. The 6th Congressional district includes parts of eastern Cobb County and northern Fulton County, and qualifying for this U.S. Representative role ran from February 13th to 15th. There are 18 separate individuals running for the spot! This election will be held on April 18th, and GCUA is in the process of analyzing the large group of candidates. A runoff, which will be likely given the large number of people running, will be held on June 20th. And it is important to note that the runoff would be between the top two individuals (and not the top individuals from each party). Stay tuned!

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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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