FEBRUARY 24, 2017
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Calendar Four Days to Go Until Crossover Day in State Legislature: Multiple Issues of Interest (Issue 1 of 5)
As of press time, the state legislature is now at day 24...with this week being filled with a chaotic volume of hearings of credit union interest, and multiple bills of note to the industry.

 
     
  Hearing on Bill to Protect Board Members (Issue 2 of 5)
On Monday, February 20th a House Judiciary subcommittee held a second hearing on a bill to strengthen credit union directors' protection against accusations of negligence.

 
  Judge Recommends Denying Wendy’s Motion to Dismiss Breach Lawsuit (Issue 3 of 5)
A magistrate judge in the Wendy's data breach lawsuit has recommended denying the restaurant chain’s motion to dismiss, according to an interim ruling released this week.

 
  Georgia Credit Unions Head to DC for GAC (Issue 4 of 5)
Credit unions from across the state are traveling to Washington, D.C., for the annual Governmental Affairs Conference (GAC) which begins on February 26th.

 
  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.

 
 
 
Four Days to Go Until Crossover Day in State Legislature: Multiple Issues of Interest (Issue 1 of 5)

As of press time, the state legislature is now at day 24...with this week being filled with a chaotic volume of hearings of credit union interest, and multiple bills of note to the industry. It is a hectic period of time, and the urgency stems from the point that any bill that has hopes of moving forward by the end of the session to be passed into law must pass it's originating chamber by day 28...which will be Friday of next week. This equates to hearings upon hearings, and bills continuously being introduced. Time is short, so activity is high...and there are over 250 bills being monitored on behalf of credit unions that are trying to get through the funnel in these remaining days. Some of the activity of note (in addition to the below article on HB 192):

  • Blighted Properties: HB 434 by Rep. Wendell Willard (R-Sandy Springs), a bill on eminent domain that is directed at counties and cities seizing blighted properties was addressed in two hearings this week on the 22nd and 23rd. This bill is being watched closely to ensure that lienholders are not negatively impacted.
  • Boat Titling: HB 357 by Rep. Ron Stephens (R-Savannah) was heard in Ways and Means committee (both Wednesday and Thursday of this week), and attempts to institute a boat titling process in Georgia. Work continues to ensure that this bill could be operationally sound for credit union lending operations.
  • Checks: a bill seeking to regulate "live" checks from industrial loans was heard on Wednesday, February 22nd in the Senate Banking Committee. The bill, SB 198 by Sen. Elena Parent (D-Decatur) seeks to prevent those small dollar lenders that fall under the Georgia Industrial Loan Act (and not credit unions) from mailing live checks that create a contract once they are cashed. While the bill did not receive a vote, it will continue to be monitored to ensure it does not inadvertently wrap in credit union credit card operations.
  • Data Breach: HB 82 by Rep. Sherri Gilligan (R-Cumming) was addressed again in House Judiciary on Friday the 17th. This bill was introduced to expand the consumer notice provisions in law where there is a breach of data, specifically to include instances where confidential data was provided to an unauthorized individual. In discussions with Rep. Gilligan, she shared that there was an issue in her county where the tax office accidentally provided Social Security numbers of the citizens to an unauthorized individual, and she is seeking to ensure that when this happens, it is disclosed to the public. This bill will be going through multiple changes, and is watched closely as it could attract any number of amendments surrounding data security.
  • Defining Payment: HB 174 by Rep. Eddie Lumsden (R-Armuchee) clarifies in law how insurance payments can be made, and delved into the specific details of financial institutions, accounts, and payments. Our thanks to Rep. Lumsden for his forward thinking to ensure that credit unions were taken care of fully in this bill.
  • Electronic Titling: HB 412 by Rep. Timothy Barr (R-Lawrenceville) seeks to require dealers to utilize only electronic titling, and was debated in a House Motor Vehicles hearing on Thursday the 23rd. This bill is monitored closely to ensure that it is not expanded to financial institutions.
  • Garnishments: SB 194 by Sen. Jesse Stone (R-Waynesboro) seeks to make technical adjustments to the garnishment law that passed in 2016, and is being monitored closely for any negative changes. It was debated in two Senate Judiciary Committee hearings this week on Tuesday and Thursday with no changes...yet.
  • HOA Clearance Letters: HB 410 by Rep. Sam Teasley (R-Marietta) was introduced this week to regulate the fees charged by homeowner associations for a clearance letter at a mortgage closing. GCUA has been in dialogue with the parties pursuing the bill as well as the homeowner association interests to help protect credit union operations from being implicated in their search for a “compromise”.
  • Ignition Interlock Devices: SB 212 by Sen. John Kennedy (R-Macon) was introduced this week which discusses the use of ignition interlock devices as they apply to DUIs. This bill will be watched closely in the legislative process to ensure that the reach of the legislation only regulates the provisional licenses tied to interlock devices, and not the devices themselves to protect second chance auto lending programs.
  • Motor Vehicles: HB 150 by Rep. Alan Powell (R-Hartwell) passed the full House on Wednesday, February 22nd. This bill seeks to allow the state another avenue to collect unpaid tolls. 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.
  • Power of Attorney Reform: HB 221 by Rep. Chuck Efstration (R-Dacula) has been in dialogue with GCUA and others since the start of January on reforming the power of attorney statue so as to have a uniform procedure, form, and create a stronger ability for the authorities to investigate and prosecute financial elder abuse and fraud. This bill had two separate hearings this week on Wednesday and Thursday, and will continue to be monitored closely to ensure that it does not create liability for credit unions.
  • Regulation: SB 67 by Sen. John Albers (R-Alpharetta) is another bill pursued in the Senate to alter how rules and regulations are created (and eliminated), and was addressed in the Senate Economic Development Committee hearing on Tuesday the 21st. While the intent is to limit regulations, it paints with a broad brush and could have the reverse effect and will continue to be monitored closely.
  • Tax Exemption Study: SR 222 by Sen. John Albers (R-Alpharetta) was heard in a Senate Finance committee on Wednesday the 22nd, and if it passes completely will need to be monitored closely in the off session as it seeks to create a study committee to review all tax exemptions in Georgia.
  • Tax Liens: HB 337 by Rep. Bruce Williamson (R-Monroe) passed a House Ways and Means Hearing (both on Wednesday and Thursday of 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.
  • Tax Reform: HB 329 by Rep. Jay Powell (R-Camilla) was just one of over 30 bills monitored this week touching tax law changes. This bill seeks to change the state income tax rate to 5.4%, which passed the House Ways and Means committee on Thursday the 23rd and will continue to be monitored closely (along with the large volume of tax bills) as any tax reform measure opens the opportunity for other changes.
  • Title Pawn Transactions: HB 353 by Rep. Brett Harrell (R-Snellville) was debated in the House Regulated Industries committee on Thursday the 23rd, 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. This bill is monitored closely to ensure that it does not change to impact credit unions.
  • Towed Vehicle Notification: HB 417 by Rep. Wendell Willard (R-Sandy Springs) was introduced this week and has a hearing scheduled for Friday the 24th as of press time in the Motor Vehicles Committe. This bill seeks to streamline the notification process for when a car is towed. GCUA was in dialogue with the bill sponsor as well as the towing lobby to ensure that the timeframe in which a lienholder can obtain the vehicle was not altered (and the collateral not lost).

One key bill of note for credit unions is HB 143 by Rep. Bruce Williamson (R-Monroe), which is the Department of Banking and Finance's housekeeping legislation. This bill was one of the fortunate ones to move out of the House last week, and is presently awaiting a hearing from Senate Banking once they get past this week. 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, and is a priority for GCUA to improve operations and enhance membership laws at credit unions.

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Hearing on Bill to Protect Board Members (Issue 2 of 5)

On Monday, February 20th a House Judiciary subcommittee held the second hearing for HB 192 by Rep. Beth Beskin (R-Atlanta). GCUA testified in favor of this bill before the committee as it seeks to strengthen the business judgement rule for financial institutions and general business...specifically to strengthen the protections of board members from charges of "ordinary negligence" in their decision making. This bill is in reaction to the recent court case (FDIC v. Loudermilk) that decided that the directors of that 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 judgement law, this legal decision has ramifications on credit unions (as well as all types of businesses).

While the state legislature was not in session on Monday, the committee opted to utilize this off day so as to commit over four hours for this second hearing to dissect this important issue. The path forward for this legislation is unclear given the opposition, but work and lobbying continues heavily for the bill. There were several questions in the hearing on how the bill defines negligence, conflicting with the current law and policy...so a new version of the bill is anticipated soon so as to ensure that it is consistent with current law and have something workable for the committee. Much work is still left to be done...with a smaller window of time to have it move forward.

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Judge Recommends Denying Wendy's Motion to Dismiss Breach Lawsuit (Issue 3 of 5)

A magistrate judge in the Wendy's data breach lawsuit has recommended denying the restaurant chain's motion to dismiss, according to an interim ruling released this week. CUNA urged the court to reject the motion to dismiss in a brief filed in September with the U.S. District Court for the Western District of Pennsylvania. In July, CUNA joined a lawsuit against Wendy's, a class action lawsuit brought against the company alleging Wendy's failed to comply with industry standards to protect payment card and customer data.

The Ohio-based Wendy's first reported a suspected breach in February 2016, as it discovered unauthorized software in its payment processing computers, affecting as many as 6,000 locations. The federal judge presiding over the case referred Wendy's motion to dismiss to a magistrate judge, who has now recommended denying the motion. The recommendation is merely advisory, and the motion to dismiss has not yet officially been denied. However, generally federal judges adopt such recommendations.

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Georgia Credit Unions Head to DC for GAC (Issue 4 of 5)

Credit unions from across the state are traveling to Washington, D.C., for the annual Governmental Affairs Conference (GAC) which begins on February 26th. This conference also involve coordinated trips to members of Congress which are instrumental in sharing the credit union perspective on issues and pursing legislation to benefit the industry.

For those traveling AND tweeting, please link us @GCUAGov on your Twitter posts and utilize the hashtag #CUNAGAC. Not attending, or not a tweeter/instagrammer? You can still see 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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