New rules suggested by the Georgia Department of Banking and Finance are scheduled for consideration by the Department on Friday, December 5, 2014. To see the full list of proposed rules, visit this link: Proposed Changes to Georia Banking Law. Comments on the proposed rules will be taken until the close of business the day prior to the vote. The rules and their proposed changes are complex. This article highlights several components of the suggested amendments that are especially noteworthy for Georgia banks and interstate banks doing business in Georgia.
Eradication of Certain Registration Fees
Elimination of Registration Fees for Non-State Chartered Bank Holding Companies
In the past, holding companies of non-state chartered banks were required to pay an annual registration fee of $1,000.00. In addition to the basic fee, subsidiary corporations under those categories were also required to pay $500.00 each. Proposed Rule 80-5-1-.02 would eliminate both the annual base payment and the additional payment for subsidiaries.
Fines Related to Fee and Statement Reporting
Rule 80-5-1-.04 allows for a fine to be assessed for failure to comply with stipulations of the Georgia Residential Mortgage Act. Banks are responsible for submitting loan fees and fee statements. Proposed changes to the rule would replace existing requirements that agents must remit fee statements regardless of whether residential loans were placed and closed during a particular period. Under this amendment, the collecting agent maintains responsibility for submitting the loan fee. As a result of proposed changes under 80-11-3-.01, an agent who does not submit loan fees within six months of a due date is subject to a fine of 20% of the total loan fees.
Lawful and Unlawful Company Acquisitions
Under current requirements, it is unlawful for a holding company to have indirect or direct ownership of voting shares in an merchant acquirer limited purpose bank (MALPB) if such an acquisition would give the holding company 5% or more total voting shares. Changes proposed in 80-12-11-.03 clarify the specifics related to acquirement, ownership, and control. They limit the prohibition to holding companies controlling more than two MALPBs in a five year period.
Proposed changes would also allow exceptions for acquisitions of ownership or control of up to 25% of any voting shares under the following circumstances:
- Shares were acquired for the purposes of investment rather than for the purpose of influencing holding company control; and
- Written notice of the acquisition is submitted to the Department of Banking and Finance within 30 days after the end of the quarter in which the acquisition took place.
If the Department of Banking and Finance determines that the acquiring company is seeking to change or influence control of the holding company, the Department may require the company to “unwind the acquisition” or take other appropriate action to limit or otherwise restrict the ability of the company to exercise control over the holding company.
Comments to the Department of Banking and Finance must be received by the close of business on Thursday, December 4, 2014.
Comments should be sent to:
Kevin B. Hagler, Commissioner
Georgia Department of Banking and Finance
2990 Brandywine Road, Suite 200
Atlanta, GA 30341-5565
Fax: (770) 986-1654 or 1655
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