On May 9th, Governor Nathan Deal signed into law the credit union priority bill to help protect the personal liability level of board members. The Board Member Protection/Business Judgement Bill, HB 192 by Rep. Beth Beskin (R-Atlanta) was lobbied heavily by GCUA to strengthen the business judgment rule for financial institutions and general business – specifically to strengthen the protections of board members against charges of “ordinary negligence” in their decision-making process.
This bill was in reaction to the recent court case (FDIC v. Loudermilk) that ruled that the directors of the bank in question could be held personally liable for ordinary negligence committed in the actual decision-making process. As credit unions are also subject to the same business judgment law, this legal decision had negative ramifications for the industry. This Georgia court case lowered the personal liability bar of the board member (and increased the chances of them being sued personally), and this new law helps rectify that decision.
GCUA testified in the hearing process, lobbied hundreds of legislators, and was an active member of a coalition group that included the Department of Banking and Finance, the Georgia Banking Association, the Community Bankers Association, the GA Chamber of Commerce, the National Independent Business Association, and the Secretary of State’s office to push this his bill across the finish line against tough opposition.