09 HB 141/AP
House
Bill 141 (AS PASSED HOUSE AND SENATE)
By:
Representatives Mills of the
25th
and Hill of the
21st
A
BILL TO BE ENTITLED
AN ACT
AN ACT
To
amend Chapter 1 of Title 7 of the Official Code of Georgia Annotated, relating
to financial institutions, so as to update definitions; to provide for penalties
for failure to provide requested information by financial institutions; to
include bank holding companies in the definition of financial institutions; to
include credit unions in restricted nomenclature; to broaden the definition of
legal lending limit; to provide for payment of dividends by Subchapter S banks;
to change the amount of par value; to provide for the investigative powers of
the Department of Banking and Finance; to provide for immunity from civil
liability for proper disclosure of information; to change certain provisions
relative to the renewal of licenses; to update the records required to be
retained by a licensee; to prohibit employment of persons that have a final
cease and desist order entered against them; to provide for transmittal of
certain monies within five days; to provide that mobile check cashing
facilities are subject to regulation; to amend Code Section 10-1-393, relating
to unlawful unfair or deceptive practices in consumer transactions an in trade
and commerce, so as to provide further illustration of an unfair or deceptive
trade practices applying to financial and other business institutions; to
provide for related matters; to provide for an effective date; to repeal
conflicting laws; and for other purposes.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION
1.
Chapter
1 of Title 7 of the Official Code of Georgia Annotated, relating to financial
institutions, is amended by revising paragraph (24) of Code Section 7-1-4,
relating to definitions relative to financial institutions, as
follows:
"(24)
'Net assets' means the amount by which the total assets exceed the total debts
of a financial institution. Total assets shall include but not be limited to
both tangible and intangible assets
(except
good will), including prepaid expenses,
prepaid taxes, and accrued income using book values determined in accordance
with generally accepted accounting principles applicable to financial
institutions.
Total assets
shall not include intangible assets in the form of good will, core deposit
intangibles, or other intangible assets related to the purchase, acquisition, or
merger of a bank charter. Total debts
shall include all liabilities, other than contingent liabilities, including
accrued expenses, deferred or unearned income, and valuation reserves, all
determined in accordance with generally accepted accounting principles
applicable to financial institutions."
SECTION
2.
Said
chapter is further amended by revising subsection (d) of Code Section 7-1-68,
relating to reports to the Department of Banking and Finance and publication of
summaries, as follows:
"(d)
Any financial institution which fails to prepare or publish any report or to
furnish any proof of publication, in accordance with this Code section,
or fails to
provide any facts or information requested under subsection (a) of this Code
section, shall pay the department a
penalty of $100.00 for each day after the time fixed by the department for
filing such report, making such publication, or furnishing such proof of
publication, but the department may, in its discretion, relieve any financial
institution from the payment of such penalty, in whole or in part, if good cause
be shown. If a financial institution fails to pay a penalty from which it has
not been relieved, the department may, through the Attorney General, maintain an
action at law to recover it."
SECTION
3.
Said
chapter is further amended by revising subsection (h) of Code Section 7-1-91,
relating to orders by the Department of Banking and Finance, as
follows:
"(h)
The term 'financial institution' as used in this Code section shall include
a bank holding
company as defined in Code Section 7-1-605
and those entities required to be licensed
pursuant to Article 4A of this chapter and any officer, director, employee,
agent, or other person participating in the conduct of the affairs of the
financial institution subject to the orders issued pursuant to this Code
section."
SECTION
4.
Said
chapter is further amended by adding a new subsection (a.1) and revising
subsection (c) of Code Section 7-1-243, relating to restrictions on using bank
and trust nomenclature, as follows:
"(a.1)
Except as provided in subsection (c) of this Code section, no person or
corporation except a credit union or a federal credit union shall use the words
'credit union', or any other similar name indicating that the business done is
that of a credit union upon any sign at its place of business or elsewhere, or
upon any of its letterheads, billheads, blank checks, blank notes, receipts,
certificates, circulars, advertisements, or any other written or printed
matter."
"(c)
Nothing in this Code section shall be construed to:
(1)
Prevent the use of the words 'banks,' 'banker,' 'banking,' 'banker's,' 'trust,'
or any similar word in a context clearly not purporting to refer to a banking or
a trust business or to a business primarily engaged in the lending of money,
underwriting or sale of securities, acting as a financial planner, financial
service provider, investment or trust adviser, or acting as a loan
broker;
(1.1)
Prevent the use of the words 'credit union', or any similar word in a context
clearly not purporting to refer to a credit union or to a business primarily
engaged in the lending of money, or accepting shares or deposits or acting as a
loan broker;
(2)
Prohibit advertisement in media distributed in or transmitted into this state by
persons or corporations lawfully engaged in the
banking,
credit union, or trust business outside of
this state; or
(3)
Prevent any person or corporation from continuing to use its name legally in use
on April 1, 1989."
SECTION
5.
Said
chapter is further amended by revising subsections (b) and (e) of Code Section
7-1-285, relating to limits on obligations to one person or corporation, as
follows:
"(b)
Except as provided in subsection (c) of this Code section, a bank shall not
directly or indirectly make loans to any one person or corporation which in
aggregate exceed 15 percent of the statutory capital base of the bank unless the
entire amount of such loans is secured by good collateral or other ample
security and does not exceed 25 percent of the statutory capital base. Except
as otherwise indicated in subsection (c) of this Code section, the purchase or
discount of agreements for the payment of money or evidences of indebtedness
shall be regarded as indirect loans to the person or corporation receiving the
proceeds of such transactions.
In
estimating loans to any individual person, all amounts loaned to firms and
partnerships of which he is a member shall be
included. In
estimating the legal lending limit for any individual person, loans to related
corporations, partnerships, and other entities shall be combined subject to
regulations established by the
department."
"(e)
The department may, by regulation not inconsistent with this Code section,
prescribe definitions of and requirements for transactions included in or
excluded from the indebtedness to which this Code section applies. The
department may also by regulation prescribe less restrictive limitations than
those listed in subsections (a) through (c) of this Code section for banks
meeting certain financial and management criteria. In addition, the department
may, by regulation or otherwise, specify that the liabilities of a group of one
or more persons or corporations or both shall be considered as owed by one
person or corporation for the purposes of this Code section because the group
relies substantially on a common source for the payment of its obligations or
makes common use of funds received by
it, or meets
other criteria established by the department for the combination of indebtedness
for legal lending limitation
purposes."
SECTION
6.
Said
chapter is further amended by revising paragraph (2) of subsection (a) of Code
Section 7-1-460, relating to restrictions on payment of dividends and limitation
of actions for dividends or distributions, as follows:
"(2)
Dividends may not be declared or paid at any time that the bank or trust company
does not have the paid-in capital and appropriated retained earnings required by
Code Section
7-1-411,
except the department may approve the payment of dividends by a Subchapter S
bank, prior to cumulative profitability, for the sole purpose of providing its
shareholders with a source of funds to pay federal and state income taxes on the
Subchapter S bank's income that is taxable to those
shareholders;"
SECTION
7.
Said
chapter is further amended by revising subsection (a) of Code Section 7-1-651,
relating to membership of credit unions, as follows:
"(a)
The membership of the credit union shall consist of the initial subscribers and
such other persons within the field of membership as may have subscribed to one
share and have paid for same together with the required entrance fee and
complied with all other requirements contained in the bylaws. No subscriber or
other member shall hold more than one share out of any class of shares. The
bylaws may provide for separate classes of shares for borrowers and depositors
and for the par value of each share for each class but in no event shall the par
value be less than
$5.00
$1.00."
SECTION
8.
Said
chapter is further amended by adding new subsections (c) through (h) of Code
Section 7-1-684.1, relating to examination of books and records of licensees by
the Department of Banking and Finance, as follows:
"(c)
The department, in its discretion, may:
(1)
Make such public or private investigations within or outside of this state as it
deems necessary to determine whether any person has violated this article or any
rule, regulation, or order under this article, to aid in the enforcement of this
article, or to assist in the prescribing of rules and regulations pursuant to
this article;
(2)
Require or permit any person to file a statement in writing, under oath or
otherwise as the department determines, as to all the facts and circumstances
concerning the matter to be investigated;
(3)
Disclose information concerning any violation of this article or any rule,
regulation, or order under this article, provided the information is derived
from a final order of the department; and
(4)
Disclose the imposition of an administrative fine or penalty under this
article.
(d)(1)
For the purpose of conducting any investigation as provided in this Code
section, the department shall have the power to administer oaths, to call any
party to testify under oath in the course of such investigations, to require the
attendance of witnesses, to require the production of books, records, and
papers, and to take the depositions of witnesses; and for such purposes the
department is authorized to issue a subpoena for any witness or for the
production of documentary evidence. Such subpoenas may be served by certified
mail or statutory overnight delivery, return receipt requested, to the
addressee's business mailing address, by examiners appointed by the department,
or shall be directed for service to the sheriff of the county where such witness
resides or is found or where the person in custody of any books, records, or
paper resides or is found. The required fees and mileage of the sheriff,
witness, or person shall be paid from the funds in the state treasury for the
use of the department in the same manner that other expenses of the department
are paid.
(2)
The department may issue and apply to enforce subpoenas in this state at the
request of a government agency regulating sellers of checks or money
transmitters of another state if the activities constituting the alleged
violation for which the information is sought would be a violation of this
article if the activities had occurred in this state.
(e)
In case of refusal to obey a subpoena issued under this article to any person, a
superior court of appropriate jurisdiction, upon application by the department,
may issue to the person an order requiring him or her to appear before the court
to show cause why he or she should not be held in contempt for refusal to obey
the subpoena. Failure to obey a subpoena may be punished as contempt by the
court.
(f)
Examinations and investigations conducted under this article and information
obtained by the department in the course of its duties under this article are
confidential, except as provided in this subsection, pursuant to the provisions
of Code Section 7-1-70. In addition to the exceptions set forth in subsection
(b) of Code Section 7-1-70, the department is authorized to share information
obtained under this article with other state and federal regulatory agencies or
law enforcement authorities. In the case of such sharing, the safeguards to
confidentiality already in place within such agencies or authorities shall be
deemed adequate. The commissioner or an examiner specifically designated may
disclose such limited information as is necessary to conduct a civil or
administrative investigation or proceeding. Information contained in the
records of the department which is not confidential and may be made available to
the public either on the department's website or upon receipt by the department
of a written request shall include:
(1)
The name, business address, and telephone, fax, and license numbers of a
licensee or registrant;
(2)
The names and titles of the principal officers;
(3)
The name of the owner or owners thereof;
(4)
The business address of a licensee's or registrant's agent for
service;
(5)
The terms of or a copy of any bond filed by a licensee or registrant;
and
(6)
The name, business address, telephone number, and fax number of all agents of a
licensee.
(g)
In the absence of malice, fraud, or bad faith, a person is not subject to civil
liability arising from the filing of a complaint with the department or
furnishing other information required by this Code section or required by the
department under the authority granted in this article. No civil cause of
action of any nature shall arise against such person:
(1)
For any information relating to suspected prohibited transactions furnished to
or received from law enforcement officials, their agents, or employees or to or
from other regulatory or licensing authorities;
(2)
For any such information furnished to or received from other persons subject to
the provisions of this title; or
(3)
For any such information furnished in complaints filed with the
department.
(h)
The commissioner or any employee or agent is not subject to civil liability, and
no civil cause of action of any nature exists against such persons arising out
of the performance of activities or duties under this article or by publication
of any report of activities under this Code
section."
SECTION
9.
Said
chapter is further amended by revising Code Section 7-1-685, relating to renewal
of licenses and the annual license fee, as follows:
"A
license may be renewed for a period to be established by regulations of the
department upon the filing of an application conforming to the requirements of
Code Section 7-1-683 with such modifications as the department may allow. No
investigation fee shall be payable in connection with such renewal application;
but an annual license fee established by regulation of the department to defray
the cost of supervision shall be paid with each renewal application, which fee
shall not be refunded or prorated if the renewal application is approved.
If a
renewal application is filed with the department before expiration of an
existing license, the license sought to be renewed shall continue in force until
the issuance by the department of the renewal license applied for or until 20
days after the department shall have refused to issue such renewal
license."
SECTION
10.
Said
chapter is further amended by revising subsection (b) of Code Section 7-1-686,
relating to a notice of action or change in number of locations by a licensee,
as follows:
"(b)
A licensee shall give notice to the department by registered or certified mail
or statutory overnight delivery of the name and address of any new or additional
locations at which it engages in the business of selling or issuing checks over
the number previously reported in either its original or renewal application and
shall show to the department that the bond or assets required under Code Section
7-1-683 have been increased accordingly. This notice shall be given to the
department by the licensee as follows:
(1)
For the period January 1 through June 30 of each year, on
or
before the first business day of
September; and
(2)
For the period July 1 through December 31 of each year, on
or
before the first business day of
March.
Failure
to provide such notice shall be punished with a fine, other administrative
action, or both. At any time the department is shown that a licensee has
decreased the number of locations at or through which it proposes to engage in
the business, the department may decrease the bond or security requirements
accordingly."
SECTION
11.
Said
chapter is further amended by revising subsection (a) of Code Section 7-1-687.1,
relating to records required to be kept by licensee for a five-year period, as
follows:
"(a)
Each licensee shall make, keep, and reserve the following books, accounts, and
other records for a period of five years:
(1)
A record of each check sold;
(2)
A general ledger which shall be posted at least monthly containing all assets,
liabilities, capital, and income and expense accounts;
(3)
Settlement sheets received from agents;
(4)
Bank statements and bank reconciliation records;
(5)
Records of outstanding checks;
(6)
Records of each check paid;
and
(7)
A list of the names and addresses of all of the licensee's
agents.;
(8)
A copy of all Currency Transaction Reports that are required to be filed by the
licensee; and
(9)
For money transmitters, records of all money transmissions sent or
received."
SECTION
12.
Said
chapter is further amended by adding a new Code section to read as
follows:
"7-1-689.2.
The
department may not issue a license to an applicant and may revoke a license from
a licensee if such person employs any other person against whom a final cease
and desist order has been issued within the preceding five years if such order
was based on a violation of this article. Each applicant and licensee shall,
before hiring an employee, examine the department's public records to determine
that such employee is not subject to a cease and desist
order."
SECTION
13.
Said
chapter is further amended by adding a new subsection (d) of Code Section
7-1-692, relating to prohibited actions by licensees, as follows:
"(d)
All licensees or agents of licensees shall transmit monies received by them
within five business days of receiving such monies, unless the licensee's
written terms and conditions call for an agent to make an earlier transmission
of funds. Failure to timely transmit funds shall subject the licensee to fines
and may result in the revocation of its license. In the case of an agent,
failure to timely transmit funds may result in the imposition of fines and the
designation of a licensee's agent being refused or suspended by the
department."
SECTION
14.
Said
chapter is further amended by revising Code Section 7-1-703, relating to license
renewal, as follows:
"A
license or
registration may be renewed for a period
to be established by regulations of the department upon the filing of an
application substantially conforming to the requirements of Code Section 7-1-701
with such modifications as the department may specify and as may be necessary.
No investigation fee shall be payable in connection with such renewal
application; but an annual license
or
registration fee established by regulation
of the department to defray the cost of supervision shall be paid with each
renewal application, which fee shall not be refunded or prorated if the renewal
application is approved.
If a
renewal application is filed with the department before expiration of an
existing license, the license sought to be renewed shall continue in force until
the issuance by the department of the renewal license applied for or until 20
days after the department shall have refused to issue such renewal
license."
SECTION
15.
Said
chapter is further amended by revising subsection (b) and adding a new
subsections (e) through (i) of Code Section 7-1-704, relating to enforcement of
provisions by the Department of Banking and Finance, as follows:
"(b)
To assure compliance with the provisions of this article and in consideration of
any application to renew a license or registration pursuant to the provisions of
Code Section 7-1-703, the department or its designated agent may examine the
books and records of any licensee or registrant to the same extent as it is
authorized to examine financial institutions under this chapter. Each licensee
or registrant shall pay an examination fee as established by regulations of the
department to cover the cost of such examination.
The
department, in its discretion, may:
(1)
Make such public or private investigations within or outside of this state as it
deems necessary to determine whether any person has violated this article or any
rule, regulation, or order under this article, to aid in the enforcement of this
article, or to assist in the prescribing of rules and regulations pursuant to
this article;
(2)
Require or permit any person to file a statement in writing, under oath or
otherwise as the department determines, as to all the facts and circumstances
concerning the matter to be investigated;
(3)
Disclose information concerning any violation of this article or any rule,
regulation, or order under this article, provided the information is derived
from a final order of the department; and
(4)
Disclose the imposition of an administrative fine or penalty under this
article."
"(e)(1)
For the purpose of conducting any investigation as provided in this Code
section, the department shall have the power to administer oaths, to call any
party to testify under oath in the course of such investigations, to require the
attendance of witnesses, to require the production of books, records, and
papers, and to take the depositions of witnesses; and for such purposes the
department is authorized to issue a subpoena for any witness or for the
production of documentary evidence. Such subpoenas may be served by certified
mail or statutory overnight delivery, return receipt requested, to the
addressee's business mailing address, by examiners appointed by the department,
or shall be directed for service to the sheriff of the county where such witness
resides or is found or where the person in custody of any books, records, or
paper resides or is found. The required fees and mileage of the sheriff,
witness, or person shall be paid from the funds in the state treasury for the
use of the department in the same manner that other expenses of the department
are paid.
(2)
The department may issue and apply to enforce subpoenas in this state at the
request of a government agency regulating check cashing of another state if the
activities constituting the alleged violation for which the information is
sought would be a violation of this article if the activities had occurred in
this state.
(f)
In case of refusal to obey a subpoena issued under this article to any person, a
superior court of appropriate jurisdiction, upon application by the department,
may issue to the person an order requiring him or her to appear before the court
to show cause why he or she should not be held in contempt for refusal to obey
the subpoena. Failure to obey a subpoena may be punished as contempt by the
court.
(g)
Examinations and investigations conducted under this article and information
obtained by the department in the course of its duties under this article are
confidential, except as provided in this subsection pursuant to the provisions
of Code Section 7-1-70. In addition to the exceptions set forth in subsection
(b) of Code Section 7-1-70, the department is authorized to share information
obtained under this article with other state and federal regulatory agencies or
law enforcement authorities. In the case of such sharing, the safeguards to
confidentiality already in place within such agencies or authorities shall be
deemed adequate. The commissioner or an examiner specifically designated may
disclose such limited information as is necessary to conduct a civil or
administrative investigation or proceeding. Information contained in the
records of the department that is not confidential and may be made available to
the public either on the department's website or upon receipt by the department
of a written request shall include:
(1)
The name, business address, and telephone, fax, and license numbers of a
licensee or registrant;
(2)
The names and titles of the principal officers;
(3)
The name of the owner or owners thereof;
(4)
The business address of a licensee's or registrant's agent for service;
and
(5)
The name, business address, telephone number, and fax number of all locations of
a licensee.
(h)
In the absence of malice, fraud, or bad faith, a person is not subject to civil
liability arising from the filing of a complaint with the department or
furnishing other information required by this Code section or required by the
department under the authority granted in this article. No civil cause of
action of any nature shall arise against such person:
(1)
For any information relating to suspected prohibited conduct furnished to or
received from law enforcement officials, their agents, or employees or to or
from other regulatory or licensing authorities;
(2)
For any such information furnished to or received from other persons subject to
the provisions of this title; or
(3)
For any such information furnished in complaints filed with the
department.
(i)
The commissioner or any employee or agent is not subject to civil liability, and
no civil cause of action of any nature exists against such persons arising out
of the performance of activities or duties under this article or by publication
of any report of activities under this Code
section."
SECTION
16.
Said
chapter is further amended by adding a new Code section to read as
follows:
"7-1-707.2.
The
department may not issue a license or registration to an applicant and may
revoke a license from a licensee or a registration from a registrant if such
person employs any other person against whom a final cease and desist order has
been issued within the preceding five years if such order was based on a
violation of this article. Each applicant, licensee and registrant shall,
before hiring an employee, examine the department's public records to determine
that such employee is not subject to a cease and desist
order."
SECTION
17.
Said
chapter is further amended by adding a new Code section to read as
follows:
"7-1-707.3.
The
operation of a mobile check cashing facility must be conducted in accordance
with the rules of the
department."
SECTION
18.
Code
Section 10-1-393, relating to unlawful unfair or deceptive practices in consumer
transactions, is amended in subsection (b) by adding a new paragraph to read as
follows:
"(34)
For any person, firm, partnership, business, association, or corporation to
willfully and knowingly accept or use an individual taxpayer identification
number issued by the Internal Revenue Service for fraudulent purposes and in
violation of federal
law."
SECTION
19.
This
Act shall become effective on July 1, 2009.
SECTION
20.
All
laws and parts of laws in conflict with this Act are repealed.