On March 29th the hectic state legislative session ended! The media has focused on the “hands free” law that will alter how Georgians use phones in their cars, the state’s effort to expand broadband capabilities everywhere, and the high-profile stakes of the multiple statewide races – along with the political stances of some of the candidates who held onto their current legislative roles. But behind the scenes of this chaotic environment, the session ended well for credit unions.
In all, there were more than 4,500 pieces of legislation active in this second year of the two-year cycle of the state session, with more than 550 bills that required active monitoring, lobbying and efforts on behalf of credit unions due to their potential impact to the industry (both positive and negative). And with 236 state legislators, over 900 active lobbyists, and more than 3,700 groups represented by a lobbyist at the state Capitol (in addition to the unpredictable environment), it was a regular juggling act of issues, people, changes and challenges. But, credit unions had a positive year for the issues addressed on behalf of the industry. For all 550-plus bills please click here, but the top 55 bills addressed on behalf of the industry included:
PRIORITY BILL: Operational Improvements to Credit Union Charter: H.B. 780 by Rep. Bruce Williamson (R-Monroe) was the credit union priority bill to enact positive changes for the industry. It is the combined work between the DBF, credit unions, and others, and required consistent work from all involved to move it forward. Positive provisions for credit unions include nomenclature protections, a process for state chartered credit unions to utilize federal powers, strengthened liability language for directors, protections for director emeritus roles, outlining ability to purchase or fund specific life insurance plans, and eliminating the unnecessary regulatory burden to report all employee loans to the board. This bill PASSED on the last day of the session with the credit union provisions intact.
Abandoned Mobile Homes: H.B. 381 by Rep. John Corbett (R-Lake Park) was the bill from last year that saw more work, more versions and more amendments in 2018. This bill sought to provide property owners a legal method of disposing abandoned derelict mobile homes that are titled to someone other than the property owner, and GCUA worked with Rep. Corbett to ensure that proper notice is provided to any lienholder prior to disposal. While the bill seeks to resolve a negative issue, GCUA lobbied during the hearing process to remove language that could create greater liability for past-due rent once the mobile home is abandoned. This bill PASSED with the provisions obtained to protect lienholders.
Abandoned Watercraft Process: H.B. 665 by Rep. Eddie Lumsden (R-Armuchee) sought to addresses the process of how abandoned boats are handled, and was on the radar to ensure that there were no changes that impacted credit union lending operations. This bill DID NOT PASS.
Alarm Companies: H.B. 826 by Rep. Geoff Cauble (R-Locust Grove) was a bill to streamline the laws pertaining to how law enforcement responds to alarm notifications, and was amended in committee to allow alarm notices from gun retailers, drugstores and banking institutions to have a “direct response” from law enforcement. The bill DID NOT PASS, but was amended onto S.B. 368 on last hours of the session – but DID NOT PASS in this bill either.
Appraisal Management Companies: H.B. 775 by Rep. Alan Powell (R-Hartwell) sought to bring Georgia law on regulating appraisal management companies into compliance with federal law. GCUA worked with Rep. Powell to add an amendment to correct a provision that had excluded credit unions in the definition of federally regulated appraisal management companies with other financial institution-owned appraisal management companies. The bill was continually monitored afterwards to ensure that the amendment to protect credit unions from being disadvantaged was not removed, and the bill DID NOT PASS. Another attempt is anticipated in 2019.
Boat Titling: H.B. 357 by Rep. Ron Stephens (R-Savannah) sought to institute a boat titling process that would have been managed by the Department of Natural Resources to coincide with registration. This issue has been introduced for almost 20 years without moving, as it has not had a warm reception with legislators. This year’s bill inched closer than ever with passage of both the full House and the full Senate by March 27th, but DID NOT PASS in the final hours with the last procedural vote.
Business Courts: H.R. 993 by Rep. Chuck Efstration (R-Dacula) would provide for the voters to decide if the state should create a separate statewide business court structure for specific complex business cases (not cases against businesses, but cases between businesses). This bill PASSED after another bill was amended with language detailing how the courts would be structured and judges selected (as there was concern that H.R. 993 did not outline the processes to bring the court into existence).
Credit Insurance: H.B. 938 by Rep. Darlene Taylor (R-Thomasville) was the bill that GCUA has worked on with the Insurance Commissioner’s office as it seeks to provide credit unions (and others) a form of regulatory relief with the option to obtain one license for credit insurance sales as opposed to licensing each individual. The bill would require regular education of those individuals tasked with selling the insurance in their roles to ensure that consumer protections are upheld in the event an institution opts to have one overreaching license. The bill PASSED.
Credit Freeze Changes: There were three separate bills that sought to remove the fee credit reporting agencies charge consumers who request a freeze: H.B. 866 by Rep. Scot Turner (R-Holly Springs), S.B. 345 by Sen. Jennifer Jordan (D-Smyrna) and S.B. 376 by Sen. David Shafer (R-Duluth). Both H.B. 866 and S.B. 376 moved forward in the process to be in the same position in the final days of the session, and S.B. 376 PASSED in the last day after it was amended with language from a previous bill (S.B. 465 by Sen. Ellis Black (R-Valdosta)) to clarify letters of credit issued from U.S. Territories. These bills and issues (credit freeze as well as letter of credit, interest and usury) were monitored closely through the process for any changes that could impact lending operations.
Cryptocurrency: There were hearings on cryptocurrencies (such as Bitcoin) to educate legislators on the growing fintech industry in Georgia. There was also S.B. 464 by Sen. Michael Williams (R-Cumming) which sought to allow taxes to be paid with this alternative format. This bill DID NOT PASS, but the topic of cryptocurrencies will continue to be monitored to ensure credit unions are not impacted.
Cybersecurity: S.B. 315 by Sen. Bruce Thompson (R-White) sought to address data breaches by criminalizing the unauthorized access of computer systems. This bill (and multiple versions) were monitored closely throughout the process to ensure that credit unions were not tasked with conflicting requirements between federal and state law governing the protection of financial data, and that legitimate business activity was not inadvertently wrapped into it. This bill PASSED.
Data Breach: H.B. 499 by Rep. Sherri Gilligan (R-Cumming), a bill from last year that sought to expand the consumer notice provisions in law where there is a data breach received more hearings and debate in 2018. GCUA was in dialogue with Rep. Gilligan to ensure that a provision in the bill remained that deems federally or state regulated entities in compliance, and this bill DID NOT PASS.
Deficiency Judgments: S.B. 86 by Sen. Jesse Stone (R-Waynesboro) was a bill from last year that saw lengthy hearing debate in 2018, and sought to regulate deficiency judgments and levies on real property – specifically requiring the confirmation of the sale before a deficiency can be pursued. GCUA monitored closely to ensure that credit unions were not impacted, and the bill DID NOT PASS.
Elder Abuse Protections/Power of Attorney Reform: H.B. 897 by Rep. Chuck Efstration (R-Dacula) sought technical changes to the power of attorney law from 2017. This bill was monitored to ensure that credit unions’ operational ability surrounding the power of attorney process was not negatively impacted (and that greater liability to financial institutions was not included in the legislation, while protecting the ability of authorities to investigate and prosecute financial elder abuse and fraud). This bill PASSED.
Elimination of Certain Tax Credit Programs: All throughout the summer, fall and winter months a study committee met to review tax credit/exemption programs to weigh a return on investment, whether the programs are working, and whether they should (or should not) be continued. An output of these hearings was S.B. 328 by Sen. John Albers (R-Alpharetta), which sought to eliminate three of the tax credit plans these hearings analyzed (drivers’ education, diesel, and a transportation fringe tax credit). This bill was amended in the process for an unrelated statewide federal tax change, and PASSED.
Elimination of Certain Tax Credit Programs (Study): S.B. 432 by Sen. John Albers (R-Alpharetta), a bill that originally sought to remove 70 tax exemptions and was then was changed to require a review of the exemptions was amended onto H.B. 93 by Rep. John Corbett (R-Lake Park). These 70 exemptions that were marked for impact analysis included groups such as the National Guard, churches, food banks, 4-H, disaster recovery and aquariums. None of the tax credits being analyzed impacts credit unions; however, the bill (and the various “vehicles” it did or could attach to) were monitored closely. These two bills DID NOT PASS; however, continued study on tax credit programs in the off session is anticipated.
Executory Contracts: H.B. 456 by Rep. Debra Bazemore (D-Riverdale) sought to tighten laws surrounding executory contracts for a home (not mortgages or loans offered at credit unions). While this bill pertained solely to instances where an owner of property contracts with a buyer through an installment format, another version of the bill which could be problematic was presented in a hearing. This was monitored closely to ensure it did not impact lending procedures at credit unions and DID NOT PASS.
Foreclosure Protections for Active Military: H.B. 676 by Rep. Paulette Rakestraw (R-Powder Springs) was amended with changes sought to protect credit unions from falling under different requirements and protections surrounding lending to military. This bill would delay any foreclosure action during a servicemember’s active duty and for a protected period afterwards, and GCUA worked, testified and lobbied to amend the bill so that it tracked federal military law (Servicemembers Civil Relief Act) foreclosure protections to prevent confusion, as well remove negative provisions that opened the door to judicial foreclosure and expanded the protections beyond mortgage lending. This bill DID NOT PASS.
Forfeiture Law: H.B. 137 by Rep. Scot Turner (R-Holly Springs) would require that any forfeiture action brought under many titles, including forfeitures that fall under Title 7, must have a written contract when an attorney is appointed by the Attorney General or district attorney to represent the state in the forfeiture action. Bills that open the Title 7 section of law are watched closely for negative amendments as it is the section of law on credit unions and other financial institutions. This bill DID NOT PASS.
Funeral Expense Payments: H.B. 689 by Rep. Rick Williams (R-Milledgeville) sought to expedite the payment of funeral expenses when an individual dies without a will, and without a joint member on the account. Presently there is a 90-day waiting period in which the funds must be held before payment; this bill sought to abolish the waiting period and instruct financial institutions to pay funeral home expenses first before family members. However, after much discussion Rep. Williams agreed to amend his bill, and just reduce the waiting period to 45 days before they can be paid by the financial institution. And while this bill DID NOT PASS, it is anticipated to be reintroduced in 2019.
Garnishments: S.B. 194 by Sen. Jesse Stone (R-Waynesboro) sought technical corrections to the garnishment law that passed in 2016, and was monitored closely for undesired changes that could impact credit union operations. This bill PASSED without any negative amendments.
GILA: H.B. 902 by Rep. Earl Ehrhart (R-Powder Springs) sought to take those loan companies that fall under the Georgia Industrial Loan Act regulated by the Insurance Commissioner and move them to the Department of Banking and Finance. This bill was reviewed closely to ensure that none of the provisions of the new regulations would be applicable to credit unions. This bill DID NOT PASS.
Hemp Growers Study Committee: H.R. 1473 by Rep. Tom McCall (R-Elberton) will hold hearings in the off session on the challenges surrounding farmers growing hemp in Georgia. From a credit union perspective, these hearings on the issue will be monitored from the perspective of what things could or could not be done by financial institutions if the state moves forward. This bill PASSED.
HOA Charges for Clearance Letters: H.B. 410 by Rep. Alan Powell (R-Hartwell) sought to regulate what information HOAs share in letters requested for mortgage closings, what fees could be charged, and was hotly contested in hours of hearings and multiple versions of the bill. From a credit union perspective, it was important to keep this issue on close watch to ensure that credit union operations were protected and ensure that HOA interests did not insert language to supersede the lien status of the lender during the debate. This bill PASSED without negative language on lien status or lending processes.
HOA Issues: There were two identical bills that sought to overhaul the condo/homeowner association law: H.B. 748 by Rep. William Bodie, D-East Point and S.B. 374 by Sen. Donzella James (D-Atlanta). All HOA bills were monitored closely as they create an avenue for HOA interests to add language they have been pursuing to supersede the priority lien status of financial institutions. These bills DID NOT PASS.
Ignition Interlock Devices: S.B. 341 by Sen. Lee Anderson (R-Grovetown) sought to regulate what is included with ignition interlock devices. While it was focused on devices installed for DUIs, it was monitored to ensure it did not wrap in second-chance auto lending programs. This bill DID NOT PASS.
Improvement Zones: S.B. 358 by Sen. Michael Rhett (D-Marietta) sought to create banking improvement zones with the intent to encourage branches in areas where there are none. The bill encourages cities and counties to utilize public funds as a quasi-incentive for banks, and DID NOT PASS.
Motor Vehicle Titling: H.B. 761 by Rep. Jason Ridley (R-Chatsworth) sought to remove the requirement for auto dealers to utilize electronic titling, and was monitored closely for any amendments that would impact auto lending operations. It was amended in the final days to remove the original intent of the bill, reaffirming that all certificates of titles by motor vehicle dealers to be submitted electronically, but provided an exception to those dealers who sell less than 10 cars a month (and a subsequent amendment that may contradict electronic titling for dealers in general). This bill PASSED.
Occupational Taxes: H.R. 1258 by Rep. Shaw Blackmon (R-Bonaire) sought to create a study committee to analyze occupational taxes for legislation to be pursued in 2019. This was a reaction to the bill regarding the payment of occupational taxes (H.B. 858 by Rep. Shaw Blackmon (R-Bonaire), and GCUA engaged to ensure that it didn’t inadvertently wrap in credit unions. These bills DID NOT PASS.
Payments Between Insurers and Health Providers: H.B. 818 by Rep. Lee Hawkins (R-Gainesville) was directed solely at the fees charged between insurance providers and doctors’ offices (and not at consumer transactions). This bill was modified earlier in the legislative process to make it explicitly clear that it is applied to those insurance payments to the provider, and to prevent insurance companies from requiring providers to accept only payment via virtual credit card. This bill PASSED without any negative language that impacted payment transactions at credit unions.
Prize-Linked Savings: S.B. 134 by Sen. David Shafer (R-Duluth) was a bill from last year that sought to provide a prize-linked savings option that was not moving in 2018. To keep the issue clean and promote future movement, GCUA utilized the session to educate legislators on the need for this legislative change while working to protect the bill from being used as a “vehicle” for other issues. This bill DID NOT PASS; however, work will continue to tee up this issue for the future.
Real Estate Issues – Sovereign Immunity: H.B. 791 by Rep. Chuck Efstration (R-Dacula) was another in the multi-year attempt to alter sovereign immunity laws (where the state could be sued). This was amended in the process to make how quieting of title is handled in instances where the state is a party and watched to ensure mortgage lending operations were not impacted; this bill DID NOT PASS.
Real Estate Issues – Fulton County: H.B. 1036 by Rep. Chuck Martin (R-Alpharetta) would alter how any instrument or interest with real property is conveyed in Fulton County, and would require the tax parcel identification numbers (or numbers associated with any or all portions) be printed on the top of the first page of the instrument. This bill would create the unintended consequence of invalidating titles and disrupting mortgage lending (as well as title insurance) for any loan that involves real property in Fulton County, and GCUA worked with Rep. Martin, the State Bar, title insurers, and two banking industry trade groups to secure an amendment to protect titles being invalidated, and engaged the Senate to ensure that the version they passed was the version with the lending protections. This local bill PASSED.
Real Estate Lending Issues: S.B. 299 by Sen. Frank Ginn (R-Danielsville) sought to require any transaction involving the recording of real property to only be done by an attorney in good standing with the State Bar of Georgia. This bill would have forced all loans where the real property is collateral to go through an attorney – and, of note for many credit unions, this includes home equity loans. Sen. Ginn was receptive to the credit union concerns, and did not move forward with the language that would place operational burdens and more expenses on many credit unions. This bill DID NOT PASS.
Real Estate Issues – Taxation: H.R. 1317 by Rep. Andy Welch (R-McDonough) PASSED and creates an off-session study committee on how real property is taxed. This will be monitored closely to ensure it does not impact credit unions nor create compliance burdens with real estate lending operations.
Regulations: S.B. 338 by Sen. William Ligon (R-Brunswick) sought changes in how the state Legislature stops proposed regulations of state agencies, and how rules and regulations are proposed. This bill was monitored closely to ensure credit unions were not disparately impacted in this process. This bill had changed drastically in the House, but reverted to the process set forth in the original bill and PASSED.
Savings for Higher Education: H.B. 664 by Rep. Sam Teasley (R-Marietta) sought to increase the amount one can place in 529 plans for tax credit purposes. The bill was monitored through the process to help incent more to save – and watched for any negative amendments, but it DID NOT PASS.
Self-Settled Trusts: H.B. 441 by Rep. Barry Fleming (R-Harlem) sought to permit a new form of trust to be offered in Georgia, and was monitored closely to ensure creditors have the capability to claim on assets included in making a decision on a loan (if the assets were placed under the trust afterwards). This bill went through several amendments and was watched carefully to ensure that it would not morph into a version that did not contain the creditor protections. This bill PASSED with protections in place.
TAVT: H.B. 327 by Rep. Shaw Blackmon (R-Bonaire) sought several changes to the TAVT process for autos, placing used cars at the same tax calculation as new cars (the higher of book or retail price) if sold by a dealer (among other changes). This has been a multi-year effort to make these changes, and will continue as the bill DID NOT PASS. However, parts of this bill (along with several new sections) DID PASS in H.B. 329 in the final hours of the last day, which pertained not to how used cars were valued, but to how leased cars are taxed, requirements on dealers with trade-in values and what can be included, and changes to the formula that allocates how tax funds are distributed between state and local governments.
Tax Changes: There were more than 200 bills that sought to make changes to the tax code, how fair market value is calculated, how income tax credits are handled, nonprofit issues, and various proposals on exemptions. Almost each day GCUA attended multiple hearings specifically to protect against negative attempts on the industry, and to monitor for any changes to the bills through the process.
Tax Changes – Intangible Tax: H.B. 729 by Rep. Brett Harrell (R-Snellville) sought changes to how intangible tax is applied to real property. During the legislative process the bill was amended, but did not contain any negative language towards credit unions and PASSED.
Tax Liens: H.B. 661 by Rep. Bruce Williamson (R-Monroe) was the legislative reaction to the special hearing on November 27th that “stayed” the Department of Revenue’s (DOR) proposed rules on creating an electronic database for tax liens. However, the proposed rules went much farther (applied a new step that would require a certificate of clearance on all deed transactions). H.B. 661 was pursued to change the law to prevent the previous DOR rules from being proposed again later and to eliminate the need for a certificate of clearance. This bill PASSED and was signed into law on February 20th.
Tenant Laws: S.B. 443 by Sen. Jesse Stone (R-Waynesboro), which sought to change tenant laws as they apply to damage and security deposits, was added to H.B. 834 by Rep. Mandi Ballinger (R-Canton) which PASSED. Her underlying bill dealt with ending a lease in instances of abuse, and these were just two of the bills that dealt with tenant law. All the tenant bills were monitored to ensure that credit unions are not saddled with regulatory burdens or have their lending operations impacted.
Towed Vehicles: There were multiple bills that sought to change the laws surrounding towing procedures: H.B. 417 by Rep. Wendell Willard (R-Sandy Springs), H.B. 773 by Rep. Alan Powell (R-Hartwell), and S.B. 446 by Sen. Tyler Harper (R-Ocilla). These were watched closely to ensure lienholder notification provisions were not impacted. And while there were multiple amendments on the bill that traveled the farthest in the process (S.B. 446), it DID NOT PASS. However, it is anticipated that the legislature may look at a rewrite of towed-vehicle law to allow a streamlined process for abandoned vehicles to be disposed of, and will continue to be monitored closely to protect credit unions.
Trash Liens: H.B. 693 by Rep. Brett Harrell (R-Snellville) sought to remove a provision in law that has allowed cities and counties to foreclosure on real property over the nonpayment of a trash bill. This effort of Rep. Harrell has been a multi-year focus to prevent fees being treated as the same level as taxes. The bill, which doesn’t remove the right to file trash liens, but changes the process to make it more transparent to the homeowner and less of a “super lien,” DID NOT PASS.
Wire Transfer Fees: H.B. 66 by Rep. Jeff Jones (R-Brunswick) sought to place a fee on wire transfers, and would create operational and disparity issues for credit unions and others required to collect. Much dialogue took place with Rep. Jones and other legislators regarding the concerns of what he was pursuing to prevent any undue compliance burdens on credit unions. This bill DID NOT PASS.