On March 25th the full House passed SB 37 by Sen. William Ligon (R-Brunswick) which seeks to address a Georgia Court of Appeals decision that conflicts with the longstanding legal footing surrounding guarantees (Moye decision). GCUA has testified in favor of this bill in hearings in the Senate and House as this decision allowed for the recognition of a verbal (and not written) cancellation of a guarantee, and could have impacts on lending. This bill seeks to ensure that any commitment (and change to or cancellation of said agreement) to lend, answer for a debt, default, etc., must be done in writing. As of press time the bill is awaiting one additional vote in the Senate due to the changes made in the House before it can travel to the Governor for his consideration. However, this movement is positive for the entire lending process in Georgia and is a good example of how working in concert with other organizations (as the Georgia Bankers Association brought this idea forward in the pre-session industry trade meeting) can benefit all financial institutions.
If the bill receives its last procedural vote, it joins the bill with key credit union charter enhancements in its wait to be considered by the Governor in the 40 days after the session adjourns after April 2nd. This bill, HB 185 by Rep. Bruce Williamson (R-Monroe), passed on March 18th and creates operational improvements for the credit union charter that were identified during the summer of 2018 by the credit union task force dedicated specifically to generate ideas for changes to the credit union state law. These improvements include:
- Addressing operational issues when there’s a merger between credit unions,
- Clearing up federal insurance and membership issues if a credit union purchases a bank,
- Outlining a clear and fair process for member expulsion by a credit union,
- Clarifying processes and definitions, including that of purchasing/selling loan participations for credit unions, and
- Renaming supervisory committee to audit committee to avoid confusion that the duties are the same as the duties of a supervisory committee for a federally chartered credit union.