State Legislative Wrap-Up

The state session adjourned on April 2^nd, bringing to close a challenging yet positive legislative year for credit unions. In all there were more than 340 bills of interest to the industry that required monitoring, lobbying, amending and, for some, outright defeating to protect credit unions. And with it being the first year of a two-year cycle, all bills that did not pass carry over into 2020. To see all the bills please click here for the legislative tracking system; however, below is a legislative wrap-up of the key issues and where they stand:

• Affordable Housing Issues: The House will hold off-session hearings to study workforce housing as they passed HR 591 by Rep. Vance Smith (R-Pine Mountain). While the purpose is to attempt to limit what local cities/counties can apply towards home aesthetics with building codes, the study would delve into affordable housing options and would need to be monitored closely during the off session for any property-related issues that could impact lending.
• Appraisal Management Companies: HB 192 by Rep. Alan Powell (R-Hartwell) seeks to bring Georgia law on regulating appraisal management companies into compliance with federal statute. GCUA worked with Rep. Powell last year on this issue to correct language that did not contemplate credit unions’ ever being engaged in this business, and while the bill did not pass last year, this year’s version retains the credit union language. The bill passed this year and is being considered by the Governor.
• Auto Dealer-Franchisee Relationships: SB 122 by Sen. John Kennedy (R-Macon) seeks to update the way auto dealers and franchisees interact with each other, as well as how they protect data. And while it’s narrowly focused, it was monitored to ensure that what is sought doesn’t affect lending programs. It passed and is being considered by the Governor.
• Boat Titling: After more than 20 years of attempts in the state Legislature, a boat titling process has passed! HB 314 by Rep. Ron Stephens (R-Savannah) passed the full House for the final vote on April 2^nd; this bill seeks to create a boat titling procedure in Georgia regulated by the Department of Natural Resources. GCUA will stay engaged in the rulemaking process to help iron out any wrinkles (as it will be a new process and a department not used to titling), and the bill is being considered by the Governor.
• Business Court: Throughout the 2019 session there were two separate bills that sought to institute a new business court schematic for the state that was approved by voters in the 2018 elections: HB 239 by Rep. Chuck Efstration (R-Dacula) and SB 110 by Sen. Jesse Stone (R-Waynesboro) which were both in play up until the final hours of the last day. HB 239 passed, leaving SB 110 as a potential vehicle for issues in 2020.
• Charter Enhancements: HB 185 by Rep. Bruce Williamson (R-Monroe) passed and awaits the Governor’s signature; it creates operational improvements for the credit union charter which were identified during the summer of 2018 by the credit union task force. 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.
• Creditors’ Rights: HB 396 by Rep. Dale Washburn (R-Macon) would make it unlawful to defraud a creditor’s rights by transferring real property without consent. And while well-intended, this bill is monitored closely to ensure that it is not amended to include changes to the lending or foreclosure operations at credit unions. The bill did not pass this year and is presently in the Senate Judiciary Committee for consideration in 2020.
• Elderly Abuse Suspicions: HB 402 by Rep. Houston Gaines (R-Athens) seeks to expand the elderly exploitation reporting requirements for financial institutions to go beyond financial exploitation to include all abuse. In discussions with Rep. Gaines on the concerns about expanding this requirement onto financial institutions, he shared that he will work with the industry to address if the bill moves forward. This bill did not pass but is eligible for consideration in the House Human Relations and Aging Committee in 2020.
• Encouraging Savings: HB 193 by Rep. Emory Dunahoo (R-Gainesville) was introduced to allow Georgia financial institutions, if they so choose, to offer savings accounts that include a “sweepstakes” component (such as the Save to Win program), and was pursued to give credit unions an option to help encourage savings among members to make a dent in the number of individuals who cannot handle a $400 emergency. The bill passed and is being considered by the Governor.
• Filing Deeds: HB 694 by Rep. Billy Mitchell (D-Stone Mountain) seeks to make a change in how deeds are filed in DeKalb County. GCUA worked on this exact issue last year (Fulton County local bill) to procure language to ensure that the absence of the extra information did not invalidate the title, deed or lien paperwork, and this bill mirrors that same amendment. This bill passed and is being considered by the Governor.
• Gift Card Fraud: HB 488 by Rep. Martin Momtahan (Dallas) seeks to combat organized retail crime through the regulation of what data is obtained in the sale of gift cards. While the intent is to prevent fraud, there are problems with the application and GCUA worked to help prevent compliance burdens on credit unions. The bill did not pass but is eligible for consideration in the House Judiciary Non-Civil Committee in 2020.
• Habitat for Humanity: The original language from HB 313 by  Rep. Spencer Frye (D-Athens) that was moved forward as HB 344 by Rep. Matthew Gambill (R-Cartersville) passed and went to the Governor for his consideration. This bill seeks to address a property tax issue for Habitat for Humanity and how its properties are assessed before they are turned over to the new owners. It was monitored as it opens sections of law that pertain to lending, nonprofits and tax exemptions. The original bill, HB 313, is still eligible for action in 2020 and opens the same concerns (as it could be amended for other purposes).
• Hemp Farming: Regulated and legalized hemp farming passed with HB 213 by Rep. John Corbett (R-Lake Park) and is now being considered by the Governor. This bill, as well as the other marijuana-related bills, were monitored to ensure that no barriers to financial services (other than the existing barriers on a federal level) are created.
• HOA Clearance Letters: SB 178 by Sen. PK Martin (R-Lawrenceville) seeks to regulate what information HOAs share in letters requested for mortgage closings, and what fees could be charged, and is a hotly contested issue. This bill did not pass but is eligible in the Senate Special Judiciary Committee for action in 2020. GCUA secured an amendment in the process to include requirements for Fannie Mae loans added to the “list” of items that can be considered standard request, and this issue will continue to be monitored to ensure that credit union operations are protected and HOA interests do not insert language to supersede the lien status of the lender.
• Improvement Zones: SB 20 by Sen. Michael Rhett (D-Marietta) is the same “banking improvement zone” bill attempted in previous years; it attempts to encourage cities and counties to utilize public funds as a quasi-incentive for banks, but is problematic in its application and the expectations it sets. It was watched closely as it is an attractive bill for other interests to take and use for negative bills that could impact financial institution law. This bill did not pass and was stripped of its contents in the final hour of the session by legislators who were seeking another bill.
• Landlord Tenant Provisions: HB 346 by Sen. Sharon Cooper (R-Marietta) outlines protections for tenants by preventing retaliation (or eviction) by a landlord in the event of a complaint. This bill is directed at “slumlords,” but was monitored to ensure it did not wade into financial issues. The bill passed and is being considered by the Governor.
• Liability Protection and Clear Operations for Funeral Home Payments: HB 490 by Rep. Jason Ridley (R-Chatsworth) reflects a year’s worth of work with Rep. Rick Williams (R-Milledgeville) on his previous attempts to expedite the payment of funeral expenses. There is a waiting period in which the funds must be held before payment if the person passed without a will or joint account holder, and in 2018 he sought to abolish the waiting period and instruct the financial institutions to pay funeral home expenses first before anyone. However, Rep. Williams was very open to working with the industry to ensure that what is pursued is positive for credit unions. He modified his original effort to remove the onerous language and included liability protection for the financial institution as well as a clear system in which to apply for payment. The bill passed and is awaiting consideration by the Governor.
• Lien bills: There were multiple bills that sought changes to the laws surrounding various liens, including HB 387 by Rep. Eddie Lumsden (R-Armuchee), which addresses liens for private nonprofit fire departments on properties, and HB 492 by Rep. Bonnie Rich (R-Suwanee), which seeks to change how dispossessory writ of possessions are utilized for evictions. Both bills passed and are being considered by the Governor, and were monitored to ensure they did not impact foreclosure processes.
• Mass Tax Exemption Review: SB 120 by Sen. John Albers (R-Alpharetta) passed and is being considered by the Governor, and seeks to create a lengthy tax exemption review. This bill originally called for an analysis and cost-return on 53 separate income and sales tax exemptions and credits, with the intent on determining which work and which do not (and as such, should not be continued). It now allows the House Ways and Means Committee as well as the Senate Finance Committee to do this analysis by requesting three exemptions at a time.
• Mortgage Licensing Exemptions: HB 212 by Rep. Clay Pirkle (R-Ashburn) creates an exemption for mobile home dealers if they are not facilitating a mortgage. And while it’s directed at federal law changes, it was amended in the process to be a more narrowly defined version to ensure it does not create unintended consequences for the lending environment in the state. It was monitored to ensure that it did not bring Georgia law out of sync with federal requirements and accidentally bring more compliance burdens onto credit unions. It passed and is being considered by the Governor.
• PACE Financing: SB 162 by Sen. Matt Brass (R-Newnan) sought to allow a finance arrangement available in over 20 states by allowing home improvement loans via tax assessments that are tied to the property and not the individual. This bill sought to expand the current schematic to include disaster improvements as well as broadband access, and GCUA worked to help defeat this bill on in the House. Later in the session it was stripped of its contents for short-term rental regulations, but did not pass.
• Payroll Cards: HB 110 by Rep. Tom Kirby (R-Loganville) sought to clarify language surrounding paying employees via payroll cards, and outlined that the method of payment is at the discretion of the employer. This bill did not move forward out of the committee; however, during the process, the language was added to HB 373, which passed.
• Peer to Peer Car Sharing: Peer to peer car sharing regulation was debated much in the session as HB 337 by Rep. Shaw Blackmon (R-Bonaire); however, it did not pass due to more time needed to address issues. GCUA will continue to be engaged in the process to ensure that the car is covered by insurance throughout the entire time, and action on the bill is anticipated in 2020.
• Protecting the Lending Environment: In the late hours of March 29^ththe full Senate 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 far reaching 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. This bill 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.
• Reciprocal Deposits: SB 157 by Sen. John Kennedy (R-Macon) seeks to allow deposit placement services as an alternative to collateralization of public deposits. As drafted the bill is narrow in its approach and seeks to allow Georgia to be the last of the 50 states to allow this option. This bill passed the full House on March 26^th and now heads to the Governor for his consideration.
• Self-Settled Trusts: This year’s effort of others to allow self-settled trusts in Georgia (as it has come up for several years now) are both SB 186 by Sen. Bill Cowsert (R-Athens) as well as HB 497 by Rep. Bonnie Rich (R-Suwanee). These bills seek to permit this new form of trust account to be offered in Georgia and are monitored closely to ensure that creditors have the capability to claim on assets that were included in deciding on a loan (if the assets were placed under the trust afterward). While neither bill passed the full process, both are still eligible for action in 2020.
• TAVT Changes: This year’s attempt at a TAVT changes bill, HB 365 by Rep. Shaw Blackmon (R-Bonaire), became SB 65 by Sen. Tyler Harper (R-Ocilla) during the session, passed and is awaiting consideration of the Governor. It seeks to end a multi-year fight between new and used auto dealers, and place autos sold at both locales on the same process for calculating fair market value at the retail selling price (but does not change how the fair market value is calculated on casual sales). HB 365 was stripped of its original contents in the final hours of the session and amended as a taxation bill on transportation services, which is still eligible in 2020.
• Tax Bills: There is a significant amount of time spent in the various tax committee hearings as the state addresses a wide variety of tax, tax exemption and nonprofit issues in any given session. As of the end of the session there were more than 140 tax bills monitored on behalf of credit unions, with most of these carrying over into 2020 for possible action.
• Tax Executions: SB 216 by Sen. Jeff Mullis (R-Chickamauga) was amended late in the process to include how tax executions are communicated and held. The bill passed and is under consideration of the Governor; it was monitored for any tax amendments or amendments that impact the lending or foreclosure process.
• Title Insurance: SB 202 by Sen. William Ligon (R-Brunswick) sought to expand title insurance to include the personal property taken as collateral for a commercial loan. This bill passed, and was monitored through the process for any unwanted amendments that could impact lending.
• Towed Vehicles: For the past few years there have been bills to alter the towing laws in Georgia. This year saw a complete overhaul of the entire section of that law: HB 307 by Rep. Alan Powell (R-Hartwell). And while the original version of the bill was negative as it lengthened the period of time in which a towing facility would notify a lienholder to 20 days, GCUA worked closely with Rep. Powell and interested parties to shorten this to keep credit unions and other from having a delay in realizing that a vehicle had been impounded and notified promptly before a lien is foreclosed upon the car. And with proactive engagement preventing negative amendments from being added in the final days, the bill passed and is under consideration of the Governor.
• Wire Transfer Fees: HB 532 by Rep. Jeff Jones (R-Brunswick)was another attempt to require a fee on wire transfers. GCUA has worked over the past several years to educate legislators on the concerns of this and how it would create compliance burdens and operational disparities between state and federal chartered credit unions. While it did not pass, it is eligible in 2020.