Georgia House Bill HB876 Introduced / Bill

                    24 LC 55 0142
House Bill 876
By: Representatives Williamson of the 112
th
, Williams of the 148
th
, Dickey of the 145
th
,
Wade of the 9
th
, Chastain of the 7
th
, and others 
A BILL TO BE ENTITLED
AN ACT
To amend Titles 7, 10, and 53 of the Official Code of Georgia, relating to banking and
1
finance, commerce and trade, and wills, trusts, and administration of estates, respectively,2
so as to update terminology; to revise procedures concerning incorporators of banks and trust3
companies; to revise requirements of articles of incorporation of banks and trust companies;4
to revise procedures concerning approval of banks and trust companies; to revise provisions5
concerning subordinated securities; to revise procedures concerning approval of certain6
transactions; to provide for definitions; to revise requirements concerning certain meetings7
of credit unions; to revise duties of directors of credit unions; to revise provisions concerning8
certain loans made by credit unions; to remove a requirement that certain mortgage brokers9
register with the Department of Banking and Finance; to provide for certain requirements of10
foreign banks; to provide for refund of installment loan closing fees; to revise requirements11
of merchant acquirer limited purpose banks; to provide for exceptions; to revise the12
definition of bona fide discount points; to conform cross-references; to provide for effective13
dates; to provide for related matters; to repeal conflicting laws; and for other purposes.14
BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:15
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PART I
16
SECTION 1-1.17
Title 7 of the Official Code of Georgia Annotated, relating to banking and finance, is18
amended in Code Section 7-1-4, relating to definitions relative to financial institutions, by19
revising paragraph (37) as follows:20
"(37)(A)
  'Subsidiary' means a corporation or a company, as defined in Code Section21
7-1-605, that is controlled by a financial institution which owns at least a majority of22
its voting shares.  A financial institution shall be deemed to control such corporation23
or company if:24
(i)  Such financial institution, directly or indirectly or acting through one or more25
other persons, owns, controls, or has the power to vote more than 50 percent of any26
class of voting securities of such corporation or company;27
(ii)  Such financial institution controls in any manner the election of a majority of the28
directors or trustees of such corporation or company; or29
(iii)  The department determines, after notice and opportunity for hearing, that such30
financial institution, directly or indirectly, exercises a controlling influence over the31
management or policies of such corporation or company.32
(B)  Notwithstanding subparagraph (A) of this paragraph, a financial institution shall33
not be deemed to control a corporation or company solely due to the financial34
institution's ownership or voting power of securities of such corporation or company35
that is:36
(i)  Held in a fiduciary capacity, unless such financial institution has sole discretionary37
authority to exercise voting rights with respect to such corporation or company; or38
(ii)  Acquired in securing or collecting a debt previously contracted in good faith for39
a period of two years after the date of acquiring such ownership or voting power of40
securities."41
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SECTION 1-2.
42
Said title is further amended by revising Code Section 7-1-391, relating to prohibition of43
promoters' fees, as follows:44
"7-1-391.45
(a)  A bank or trust company shall not pay any fee, compensation, or commission for46
promotion in connection with its organization or apply any money received on account of47
shares or subscriptions, selling shares, or other services in connection with its organization,48
except legal fees, commissions or fees to disinterested third parties for sale of bank stock49
to others, and other usual and ordinary expenses necessary for its organization.50
(b)  A majority of incorporators shall file with the department at the time of filing of the
51
articles an affidavit:52
(1) Setting forth all expenses incurred or to be incurred in connection with the53
organization of the bank or trust company, subscription for its shares, and sale of its54
shares; and55
(2)  Stating that no fee, compensation, or commission prohibited by subsection (a) of this56
Code section has been paid or incurred.57
(c) In the event of a violation of this Code section the department may disapprove the58
articles on account of such violation."59
SECTION 1-3.60
Said title is further amended in Code Section 7-1-392, relating to articles of incorporation,61
advertisement of articles or notice of application, and naming registered agent, by revising62
paragraphs (8) and (9) of subsection (a) as follows:63
"(8)  The name, place and county of residence, and post office address of each64
incorporator;65
(9)  The name, occupation, citizenship, place and county of residence, and post office66
address of each of the first directors, which number shall not be less than five; and"67
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SECTION 1-4.
68
Said title is further amended in Code Section 7-1-393, relating to additional filings with69
department and fees, by revising paragraph (2) as follows:70
"(2)  The affidavit required by Code Section 7-1-391
 Reserved;"71
SECTION 1-5.72
Said title is further amended in Code Section 7-1-394, relating to investigation, approval or73
disapproval by department, and abbreviated procedures, by revising subsection (b) as74
follows:75
"(b) Within 90 days after receipt of the articles and the filings and fees from the76
incorporators as required by Code Section 7-1-393, the department shall approve or77
disapprove the proposed bank or trust company; provided, however, that, if the approval78
of a federal public body is also required with respect to the bank or trust company, then the79
department may elect to not act on the application until after such approval is given.  In80
giving approval, the department may impose conditions to be satisfied prior to the issuance81
of a permit to do business under Code Section 7-1-396.  If the department, in its discretion,82
shall approve the proposed bank or trust company with or without conditions, it shall83
deliver its written approval of the articles to the Secretary of State and notify the84
incorporators of its action, provided that if the approval of a federal public body is also85
required with respect to the bank or trust company, then the department may, at its option,86
withhold its written approval from the Secretary of State until such approval is given and87
may, at its option, withdraw its approval if the federal public body refuses to grant its88
approval to the bank or trust company.  If the department, in its discretion, shall disapprove89
the proposed bank or trust company, it shall notify the incorporators of its disapproval and90
state generally the unfavorable factors influencing its decision. The decision of the91
department shall be conclusive, except that it may be subject to judicial review as provided92
in Code Section 7-1-90."93
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SECTION 1-6.
94
Said title is further amended in Code Section 7-1-419, relating to subordinated securities, by95
revising subsections (c) and (d) as follows:96
"(c)  If at or after the payment or retirement of the subordinated securities of a bank or trust
97
company there is or would be a deficiency in the capital stock of the bank or trust98
company, such fact shall be reported to the department in advance of the payment or99
retirement.  The department may, upon receipt of such report, order a restoration of capital100
stock or take other appropriate remedial measures under this chapter.101
(d) Subordinated securities shall not be considered in determining the amount of ad102
valorem taxes payable by the bank or trust company."103
SECTION 1-7.104
Said title is further amended in Code Section 7-1-590, relating to definitions relative to105
representative offices and registration, by revising paragraph (4) as follows:106
"(4)  'Loan production office' is a form of a representative office, where the solicitation107
of loans or of leases of personal property may occur, but not the closing of loans, the108
disbursement of loan proceeds to the borrower, nor any other banking business.  It shall109
be established and registered as a representative office."110
SECTION 1-8.111
Said title is further amended in Code Section 7-1-606, relating to actions of bank holding112
companies unlawful without prior approval of commissioner and exceptions, by revising113
subparagraph (C) of paragraph (2) of subsection (a) as follows:114
"(C)  A bank holding company of a national bank with its main office in Georgia115
acquiring a Georgia bank holding company, as such term is defined in paragraph (10)116
of Code Section 7-1-621, shall notify provided that such bank holding company has117
notified the department upon filing an application with the appropriate federal or state118
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financial regulator and that the department has not objected to the transaction in119
accordance with the provisions of this subparagraph.  The notification requirements of120
this subparagraph shall be satisfied by furnishing the department with a copy of the121
application or applications filed with the applicable bank supervisory agencies seeking122
approval for the proposed transaction and such other information as the department may123
request.  In addition, the parties to such transaction shall file with the department and124
the Secretary of State a certificate of approval of the acquisition by the appropriate125
supervisory agencies prior to consummation of the transaction.  The department may,126
for good cause shown, object to the transaction by letter to the bank holding company127
of a national bank with its main office in Georgia, the Georgia bank holding company,128
and to the appropriate federal or state financial regulator before consummation of the129
transaction.  In the event of such objection, the acquisition cannot be consummated130
without the parties obtaining the approval of the department.  Unless the department has131
objected to the transaction, the department shall forward to the Secretary of State132
written confirmation that the requirements of this subparagraph have been satisfied; or"133
SECTION 1-9.134
Said title is further amended in Code Section 7-1-623, relating to acquisitions not requiring135
department approval and notifications, by revising subsections (a) and (c) as follows:136
"(a)  Subject to any applicable restrictions, an out-of-state bank holding company having137
a bank subsidiary with banking offices in Georgia may acquire a bank that does not have138
banking offices in this state, and an out-of-state bank holding company may acquire an139
out-of-state bank with branch offices in Georgia without the approval of the department."140
"(c)  An out-of-state bank holding company acquiring a Georgia bank holding company or141
Georgia state bank shall notify the department upon filing an application with the142
appropriate federal or state financial regulator.  The notification requirements of this143
subsection shall be satisfied by furnishing the department with a copy of the application or144
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applications filed with the applicable bank supervisory agencies seeking approval for the145
proposed transaction and such other information as the department shall request.  In146
addition, the parties to such transaction shall file with the department and the Secretary of147
State a certificate of approval of the acquisition by the appropriate supervisory agencies148
prior to consummation of the transaction.  The department may, for good cause shown,149
object to the transaction by letter to the out-of-state bank holding company, the Georgia150
bank holding company, and to the appropriate federal or state financial regulator before151
consummation of the transaction.  In the event of such objection, the acquisition cannot be152
consummated without the parties obtaining the approval of the department.  Unless the153
department has objected to the transaction, the department shall forward to the Secretary154
of State written confirmation that the requirements of this subsection have been satisfied."155
SECTION 1-10.156
Said title is further amended in Code Section 7-1-630, relating to initial subscribers, contents157
and filing of articles, other required filings, fee for investigation, and selection of initial158
directors, by revising paragraph (2) of subsection (e) and adding a new subsection to read as159
follows:160
"(2)  The number of directors, which must shall be not less than five nor more than 25,161
all of whom must shall be members, and their powers and duties, together with the duties162
of the executive officers elected by the board of directors;"163
"(h)  For the purposes of this article, the term 'executive officer' means an individual who164
performs significant managerial, supervisory, or policy-making functions on behalf of a165
credit union, including, but not limited to, the chief executive officer, president, chief166
financial officer, chief operating officer, and other individuals who perform such167
functions."168
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SECTION 1-11.
169
Said title is further amended in Code Section 7-1-633, relating to organizational meeting of170
directors and commencing of business, by revising subsection (a) as follows:171
"(a)  Within 30 days after receipt of the certificate of incorporation from the Secretary of172
State, an organizational meeting of the board of directors named in the articles of173
incorporation shall be held for the purpose of accepting the certificate and bylaws,174
appointing an audit committee and
 a credit committee or, in lieu thereof, loan officers and175
an audit committee pursuant to Code Section 7-1-658, naming the president, and electing176
or appointing the other executive officers, as provided in Code Section 7-1-655, who shall177
serve until the first directors' meeting after the first annual meeting.  Notice of the meeting178
shall be given at least five days prior to the date of the meeting."179
SECTION 1-12.180
Said title is further amended in Code Section 7-1-635.1, relating to out-of-state credit unions,181
by revising subsection (e) as follows:182
"(e)  A credit union which is approved under this Code section shall be exempt from the183
requirements of Article 15 of Chapter 2 3 of Title 14."184
SECTION 1-13.185
Said title is further amended in Code Section 7-1-651, relating to membership and shares, by186
revising subsection (b) as follows:187
"(b)  Societies, associations, partnerships, limited liability companies, and corporations188
composed of persons who are eligible for membership or headquartered within the field of189
membership may be admitted to membership in the same manner and under the same190
conditions as such persons."191
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SECTION 1-14.
192
Said title is further amended by revising Code Section 7-1-655, relating to board of directors,193
credit and audit committees, officers, oaths of officials, removal from office, suspension of194
member, filling of vacancies, and notification to department of change in president or chief195
executive officers, as follows:196
"7-1-655.197
(a)  At the first annual meeting, the members shall elect from among their number a board198
of directors of no less than five nor more than 25 and at each annual meeting thereafter199
shall elect successors to the members of the board of directors whose terms of office expire200
at such annual meeting.201
(b)  Except as this Code section permits the bylaws of a credit union to provide otherwise,202
members of the board of directors elected at the first annual meeting shall serve until the203
next annual meeting and until their successors are elected and qualified
.  A credit union204
may in its bylaws provide for staggered elections for members of the board of directors;205
but in that event the bylaws shall provide that as nearly as possible one-third of the board206
shall be elected at each annual meeting.207
(c)  At the organizational meeting and at its first meeting after each annual meeting of the208
members, the board of directors shall appoint an audit committee, credit committee,209
chairperson, and secretary, and such other.  In addition, the board of directors may appoint210
other committees or executive officers consistent with the bylaws as the board deems211
desirable.  No member of the audit committee may be an employee of the credit union.212
(d)  The chairperson of the credit and audit committees shall be appointed by the board213
from among its number.  Both the credit and audit committees shall be accountable to the214
board and members of such committees may be removed by the board.215
(e)  Officers and the committee members elected or appointed at the organizational meeting216
shall serve until the first annual meeting.  Thereafter, the terms of such persons Directors217
shall be serve until their successors are chosen or have duly qualified.  An officer A218
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director elected or appointed to fill an unexpired term shall be elected or appointed for the219
balance of that term.220
(f)  All members of the board and all officers of directors and committee members shall be221
sworn to perform faithfully the duties of their several offices in accordance with this222
chapter and the bylaws or as otherwise lawfully established.  The oaths shall be subscribed223
in writing and a copy thereof shall be retained in the minutes of the meetings of the board. 224
The oaths shall not modify in any manner the legal duties of or the standard of care for225
members of the board of directors and officers committee members in the exercise of such226
duties.227
(g)  The entire board of directors or an individual director may be removed from office228
without cause by the vote of a quorum of members at a properly called meeting.229
(h)  The board may remove a director from office if:230
(1)  The director is adjudicated an incompetent by a court or is convicted of a felony;231
(2)  The director does not, within 60 days of his or her election or such longer time as232
may be specified in the bylaws, accept the office in writing or by attendance at a meeting233
and fulfill other requirements for holding the office;234
(3)  The director fails to attend regular meetings of the board for six successive meetings235
without having been excused by the board;236
(4)  The director was an employee or duly elected officer of the credit union and was237
discharged or resigned at the request of the board for reasons relating to performance of238
duties as an employee or officer of the credit union; or239
(5)  For any reason set forth in the bylaws of the credit union.240
(i)  The board of directors, by a two-thirds' vote of a quorum of the board, may suspend any241
member of the credit union's board of directors, for cause, until the next membership242
meeting, which shall be held not less than seven nor more than 60 days after such243
suspension.  The suspended person will be notified of the details of his or her suspension,244
and shall have the right to request a meeting with the board to reconsider his or her245
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suspension prior to the membership meeting.  Any suspended member of the board of
246
directors may be removed by a majority vote of a quorum of members at a properly called247
meeting.  At such meeting of the membership, the suspended person shall have the right248
to make a presentation to the members and the suspension shall be acted upon by the249
members at such meeting and the person shall be removed from, or restored to, the board.250
(j)  Vacancies in the board of directors, whether caused by removal or otherwise and251
including vacancies resulting from an increase in the number of directors, may be filled by252
the remaining members of the board, even though less than a quorum.253
(k)  The credit union shall immediately notify the department upon a change in president254
or chief executive officer.255
(l)  Each credit union shall keep minutes of the meetings of its members, board of directors,
256
and committees of directors."257
SECTION 1-15.258
Said title is further amended in Code Section 7-1-656, relating to duties of directors,259
meetings, prohibited activities, eligibility to vote, applicability of Code Section 7-1-490, and260
appointment of honorary director or director emeritus, by revising paragraphs (2) and (3) of261
subsection (a) as follows:262
"(2)  To determine from time to time rates of interest and dividends which shall be263
allowed on deposits and charged on, loans, and income consistent with this article and264
other applicable laws and to authorize any interest refunds on such classes of loans and265
under such conditions as the board prescribes;266
(3)  To fix the amount of the fidelity bond which shall be required of all directors,267
officers, employees, agents, or members having custody of funds, properties, or records;268
provided, however, that the amount of such fidelity bond shall not be less than such269
minimum requirements as shall be prescribed by regulation of the department and shall270
be in such form as may from time to time be approved by the department;"271
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SECTION 1-16.
272
Said title is further amended in Code Section 7-1-658, relating to loans, by revising273
subsection (c) and paragraph (5) of subsection (g) as follows:274
"(c)  Loans may be made to executive
 officers, directors, and committee members of the275
credit union under the same general terms and conditions as to other members of the credit276
union; provided, however, that no officer, director, committee member, or employee person277
shall participate in approving any loan in which he or she has a direct or indirect financial278
interest.  The approval of all loans to officers, directors, and committee members of the279
credit union shall be reported to the board of directors at its next meeting."280
"(5)  Unsecured obligations below the unsecured legal lending limit in conjunction with281
secured obligations below the secured legal lending limit so long as the total aggregate282
liability for both secured and unsecured obligations is $50,000.00 $150,000.00 or less."283
SECTION 1-17.284
Said title is further amended by revising Code Section 7-1-661, relating to fiscal year, special285
meetings of members, and voting and proxies, as follows:286
"7-1-661.287
The credit union fiscal year shall end at the close of business on December 31, unless the288
bylaws of the credit union specify a different fiscal year.  Special Unless the articles of289
incorporation or bylaws provide otherwise, special meetings of the members may be held290
by order of the chairperson of the board of directors, the president or chief executive291
officer, or at least 20 percent of the directors in office.  In addition, special meetings of the292
members may be held or on written request of 10 5 percent of the members or such other293
amount as the articles of incorporation or bylaws shall specify; provided, however, that294
such articles or bylaws shall not require written request from more than 25 percent of the295
members for a special meeting to be held.  At all meetings a member shall have but one296
vote.  No member may vote by proxy; but a society, association, partnership, or corporation297
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having membership in the credit union may be represented by one person duly authorized
298
by said society, association, partnership, or corporation to represent it.  At any meeting the299
members may decide on any matter of interest to the credit union and may overrule the300
board of directors, provided that
 the notice of the meeting shall have stated the question to301
be considered."302
SECTION 1-18.303
Said title is further amended in Code Section 7-1-1000, relating to definitions relative to304
licensing of mortgage lenders and mortgage brokers, by revising paragraphs (4), (16), (22)305
and (28) as follows:306
"(4)  'Commitment' or 'commitment agreement' means a statement by a lender required307
to be licensed or registered under this article that sets forth the terms and conditions upon308
which the lender is willing to make a particular mortgage loan to a particular borrower."309
"(16)  'Lock-in agreement' means a written agreement whereby a lender or a broker310
required to be licensed or registered under this article guarantees for a specified number311
of days or until a specified date the availability of a specified rate of interest for a312
mortgage loan, a specified formula by which the rate of interest will be determined, or313
a specific number of discount points if the mortgage loan is approved and closed within314
the stated period of time."315
"(22)  'Mortgage loan originator' means an individual who for compensation or gain or316
in the expectation of compensation or gain takes a residential mortgage loan application317
or offers or negotiates terms of a residential mortgage loan.  Generally, this does not318
include an individual engaged solely as a loan processor or underwriter except as319
otherwise provided in subsection (a.1) of Code Section 7-1-1002; a person or entity that320
only performs real estate brokerage activities and is licensed or registered in accordance321
with Georgia law unless the person or entity is compensated by a mortgage lender,322
mortgage broker, or other mortgage loan originator or by any agent of such mortgage323
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lender, mortgage broker, or other mortgage loan originator; and does not include a person
324
or entity solely involved in extensions of credit relating to time-share plans, as that term325
is defined in 11 U.S.C. Section 101(53D)."326
"(28) 'Registrant' means any person required to register pursuant to Code
327
Sections 7-1-1001 and 7-1-1003.2. Reserved."328
SECTION 1-19.329
Said title is further amended in subsection (a) of Code Section 7-1-1001, relating to330
exemption for certain persons and entities, registration requirements, authored actions of331
licensed mortgage lenders, and violations, by revising the introductory language and332
paragraphs (2.1), (14), and (19), by deleting "or" at the end of subparagraph (B) of paragraph333
(18), and by adding a new paragraph to read as follows:334
"(a)  The following persons shall not be required to obtain a mortgage loan originator,335
mortgage broker, or mortgage lender license and shall not be subject to the provisions of336
this article but may be subject to registration requirements, if registration of such persons337
is required by this article:"338
"(2.1)  Any wholly owned subsidiary of any bank holding company; provided, however,339
that such subsidiary shall be subject to registration requirements in order to facilitate the340
department's handling of consumer inquiries.  Such requirements are contained in Code341
Section 7-1-1003.3;"342
"(14)  A natural person employed by a licensed or registered mortgage broker, a licensed343
or registered mortgage lender, or any person exempted from the mortgage broker or344
mortgage lender licensing requirements of this article when acting within the scope of345
employment and under the supervision of the mortgage broker or mortgage lender or346
exempted person as an employee and not as an independent contractor, except those347
natural persons exempt from licensure as a mortgage broker or mortgage lender under348
paragraph (17) of this subsection.  To be exempt from licensure as a mortgage broker or349
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mortgage lender, a natural person shall be employed by only one such employer and shall
350
be at all times eligible for employment in compliance with the provisions and351
prohibitions of Code Section 7-1-1004.  Such natural person, who meets the definition352
of mortgage loan originator provided in paragraph (22) of Code Section 7-1-1000, shall353
be subject to mortgage loan originator licensing requirements.  A natural person against354
whom a cease and desist order has become final shall not qualify for this exemption while355
under the employment time restrictions of subsection (p) of Code Section 7-1-1004 if356
such order was based on a violation of Code Section 7-1-1002 or 7-1-1013 or whose357
license was revoked within five years of the date such person was hired;"358
"(19)  Any person who purchases or holds closed mortgage loans for the sole purpose of359
securitization into a secondary market, provided that such person holds the individual360
loans for less than seven
 14 days or less and does not service the loans, but with such361
loans being serviced instead by a person licensed as a mortgage lender or exempt from362
the licensing requirements of this article; or363
(20)  Any trust, the trustee of which is a bank that satisfies the exemption from licensure364
set forth in paragraph (1) of this subsection, that purchases or holds closed mortgage365
loans for the sole purpose of securitization or otherwise transferring the loans into a366
secondary market, provided that the loans held in the trust are not serviced by the trust367
or the trustee of the trust but are instead serviced by a person licensed as a mortgage368
lender or exempt from the licensing requirements of this article.  A trust that commences369
foreclosure proceedings on a mortgage loan held by the trust either through the trustee370
of the trust or otherwise shall not qualify for this exemption."371
SECTION 1-20.372
Said title is further amended in Code Section 7-1-1002, relating to transaction of business373
without a license, registration, or exemption prohibited, knowing purchase of mortgage loan374
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from unlicensed or nonexempt broker or lender prohibited, and liability of persons
375
controlling violators, by revising subsections (a) and (b) as follows:376
"(a)  It shall be prohibited for any person to transact business in this state directly or377
indirectly as a mortgage broker, a mortgage lender, or a mortgage loan originator unless378
such person:379
(1)  Is licensed or registered as such
 under this article by the department utilizing the380
Nationwide Multistate Licensing System and Registry;381
(2)  Is exempted from the licensing or registration requirements of this article pursuant382
to Code Section 7-1-1001;383
(3)  In the case of an employee of a mortgage broker or mortgage lender, has qualified384
to be relieved of the necessity for a license under the employee exemption in385
paragraph (14) of subsection (a) of Code Section 7-1-1001; or386
(4)  In the case of a mortgage loan originator, is supervised by a mortgage broker,387
mortgage lender, or exemptee on a daily basis while performing mortgage functions; is388
employed by and works exclusively for only one mortgage broker, mortgage lender, or389
exemptee; and is paid on a W-2 basis by the employing mortgage broker, mortgage390
lender, or exemptee, except those natural persons exempt from licensure as a mortgage391
broker or mortgage lender under paragraph (17) of subsection (a) of Code Section392
7-1-1001.  Each licensed mortgage loan originator shall register with and maintain a valid393
unique identifier issued by the Nationwide Multistate Licensing System and Registry. 394
For the purposes of implementing an orderly and efficient mortgage loan originator395
process, the department may establish licensing rules or regulations and interim396
procedures for licensing and acceptance of applications."397
"(b) It shall be prohibited for any person, as defined in Code Section 7-1-1000, to398
purchase, sell, or transfer one or more mortgage loans or loan applications from or to a399
mortgage loan originator, mortgage broker, or mortgage lender who is neither licensed nor400
exempt from the licensing or registration provisions of this article.  Such a purchase shall401
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not affect the obligation of the borrower under the terms of the mortgage loan.  The
402
department shall provide for distribution or availability of information regarding approved403
or revoked licenses."404
SECTION 1-21.405
Said title is further amended in Code Section 7-1-1003.2, relating to financial requirements406
for licensing and registration and bond requirements, by revising subsections (a), (b), and (c)407
as follows:408
"(a)  Each licensed or registered
 mortgage broker shall provide the department with a bond. 409
The bond for a mortgage broker shall be in the principal sum of $150,000.00 or such410
greater sum as the department may require as set forth by regulation based on an amount411
that reflects the dollar amount of loans originated, and the bond shall meet the other412
requirements of subsection (d) of this Code section.413
(b)  Except as otherwise provided in subsection (d) of this Code section, the department414
shall not license or register any mortgage lender unless the applicant or registrant provides415
the department with a bond.  The bond for a mortgage lender shall be in the principal sum416
of $250,000.00 or such greater sum as the department may require as set forth by regulation417
based on an amount that reflects the dollar amount of loans originated, and which bond418
shall meet the other requirements of subsection (d) of this Code section.419
(c)  Each mortgage loan originator shall be covered by the surety bond of his or her420
sponsoring licensed or registered mortgage broker or lender.  In the event that the mortgage421
loan originator is an employee of a licensed or registered mortgage broker or lender or422
under an exclusive written independent contractor agreement as described in paragraph423
(17) of Code Section 7-1-1001, the surety bond of such licensed or registered mortgage424
broker or lender may be used in lieu of the mortgage loan originator's surety bond425
requirement."426
H. B. 876
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SECTION 1-22.
427
Said title is further amended by revising Code Section 7-1-1003.3, relating to application for428
registration, as follows:429
"7-1-1003.3.430
An application to register as a mortgage lender or broker under this article shall be made
431
annually in writing, under oath, on a form provided by the department, subject to432
requirements specified by rules and regulations of the department. Reserved."433
SECTION 1-23.434
Said title is further amended in Code Section 7-1-1004, relating to investigation of applicant435
and its officers, audit, and education, experience, and other requirements relative to licensees436
and registrants, by revising subsections (b), (c), (i), (l), (m), (o), (p), (q), and (r) as follows:437
"(b)  Upon receipt of an application for license or registration, the department shall conduct438
such investigation as it deems necessary to determine that the mortgage broker and439
mortgage lender applicant and the individuals who direct the affairs or establish policy for440
the mortgage broker and mortgage lender applicant, including the officers, directors, or the441
equivalent, are of good character and ethical reputation; that the mortgage broker and442
mortgage lender applicant is not disqualified for licensure as a result of adverse443
administrative civil or criminal findings in any jurisdiction; that the mortgage broker and444
mortgage lender applicant and such persons meet the requirements of subsection (i) of this445
Code section; that the mortgage broker and mortgage lender applicant and such persons446
demonstrate reasonable financial responsibility; that the mortgage broker and mortgage447
lender applicant has reasonable policies and procedures to receive and process customer448
grievances and inquiries promptly and fairly; and that the mortgage broker and mortgage449
lender applicant has and maintains a registered agent for service in this state.450
(c)  The department shall not license or register any mortgage broker and mortgage lender451
applicant unless it is satisfied that the mortgage broker and mortgage lender applicant may452
H. B. 876
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be expected to operate its mortgage lending or brokerage activities in compliance with the
453
laws of this state and in a manner which protects the contractual and property rights of the454
citizens of this state."455
"(i)  The department shall not issue or may revoke a license or registration
 if it finds that456
the mortgage loan originator, mortgage broker, or mortgage lender applicant or licensee,457
or any person who is a director, officer, partner, covered employee, or ultimate equitable458
owner of 10 percent or more of the mortgage broker or mortgage lender applicant,459
registrant, or licensee or any individual who directs the affairs or establishes policy for the460
mortgage broker or mortgage lender applicant, registrant, or licensee, has been convicted461
of a felony in any jurisdiction or of a crime which, if committed within this state, would462
constitute a felony under the laws of this state.  Other than a mortgage loan originator, for463
the purposes of this article, a person shall be deemed to have been convicted of a crime if464
such person shall have pleaded guilty or nolo contendere to a charge thereof before a court465
or federal magistrate or shall have been found guilty thereof by the decision or judgment466
of a court or federal magistrate or by the verdict of a jury, irrespective of the467
pronouncement of sentence or the suspension thereof, and regardless of whether first468
offender treatment without adjudication of guilt pursuant to the charge was entered, or an469
adjudication or sentence was otherwise withheld or not entered on the charge, unless and470
until such plea of guilty, or such decision, judgment, or verdict, shall have been set aside,471
reversed, or otherwise abrogated by lawful judicial process or until probation, sentence, or472
both probation and sentence of a first offender have been successfully completed and473
documented, or unless the person convicted of the crime shall have received a pardon474
therefor from the President of the United States or the Governor governor or other475
pardoning authority in the jurisdiction where the conviction occurred.  For purposes of this476
article, a mortgage loan originator shall be deemed to have been convicted of a crime if he477
or she has pleaded guilty to, been found guilty of, or entered a first offender or nolo478
H. B. 876
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contendere plea to a felony in a domestic, foreign, or military court; provided, however,
479
that any pardon of a conviction shall not be a conviction."480
"(l)  Every mortgage broker and mortgage lender licensee, registrant,
 and applicant shall481
be authorized and required to obtain criminal background checks on covered employees. 482
Such criminal background checks shall be commercial background checks.  Licensees,483
registrants, and applicants shall be responsible for any applicable fees charged by the484
company performing the commercial background check. A licensee, registrant, or485
applicant may only employ a covered employee whose criminal history has been checked486
in this manner and has been found to be in compliance with all lawful requirements prior487
to the initial date of hire.  This provision shall not apply to directors, officers, partners,488
agents, or ultimate equitable owners of 10 percent or more or to persons who direct the489
company's affairs or establish policy, whose background shall have been investigated490
through the department before taking office, beginning employment, or securing491
ownership.  The department shall be entitled to review any applicant's, registrant's, or492
licensee's files to determine whether the required commercial background checks have been493
conducted and whether all covered employees are qualified. Notwithstanding the494
requirement that licensees, registrants, and applicants conduct such commercial495
background checks on covered employees, the department shall retain the right to obtain496
conviction data on covered employees pursuant to subsection (j) of this Code section.497
(m)  Upon receipt of fingerprints, fees, and other required information from the department,498
the Georgia Crime Information Center shall promptly transmit fingerprints to the Federal499
Bureau of Investigation for a search of bureau records and an appropriate report and shall500
promptly conduct a search of its own records and records to which it has access.  The501
Georgia Crime Information Center shall notify the department in writing of any derogatory502
finding, including, but not limited to, any conviction data regarding the fingerprint records503
check, or if there is no such finding.  All conviction data received by the department shall504
be used by the department for the exclusive purpose of carrying out the responsibilities of505
H. B. 876
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this article, shall not be a public record, shall be privileged, and shall not be disclosed to
506
any other person or agency except to any person or agency which otherwise has a legal507
right to inspect the file.  All such records shall be maintained by the department and the508
applicant or licensee or registrant
 pursuant to laws regarding such records and the rules and509
regulations of the Federal Bureau of Investigation and the Georgia Crime Information510
Center, as applicable."511
"(o)  The department may deny or revoke a license or registration or otherwise restrict a512
license or registration if it finds that the mortgage broker or mortgage lender applicant or513
any person who is a director, officer, partner, or ultimate equitable owner of 10 percent or514
more or person who directs the company's affairs or who establishes policy of the applicant515
has been in one or more of these roles as a mortgage lender, or broker, or registrant whose516
license or registration has been denied, revoked, or suspended within five years of the date517
of the application.518
(p)  The department shall not issue a license or registration to and may revoke a license or519
registration from a mortgage broker or mortgage lender applicant, or licensee, or registrant520
if such person:521
(1)  Has been the recipient of a final cease and desist order issued within the preceding522
five years if such order was based on a violation of subsection (i) of this Code section or523
Code Section 7-1-1002 or 7-1-1013;524
(2)  Employs any other person against whom a final cease and desist order has been525
issued within the preceding five years if such order was based on a violation of526
subsection (i) of this Code section or Code Section 7-1-1002 or 7-1-1013; or527
(3)  Has had his or her license revoked within five years of the date such person was hired528
or employs any other person who has had his or her license revoked within five years of529
the date such person was hired.530
(q)  Each mortgage broker and mortgage lender applicant, or licensee, and registrant shall,531
before hiring an employee, examine the department's public records to determine that such532
H. B. 876
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employee is not subject to the type of order described in subsection (p) of this Code
533
section.534
(r)  Within 90 days after receipt of a completed application and payment of licensing fees535
prescribed by this article, the department shall either grant or deny the request for license536
or registration
."537
SECTION 1-24.538
Said title is further amended in Code Section 7-1-1005, relating to renewal of licenses and539
registrations and expiration, by revising subsections (a), (b), (c), and (d) as follows:540
"(a)  Except as otherwise specifically provided in this article, all licenses and registrations541
issued pursuant to this article shall expire on December 31 of each year, and application542
for renewal shall be made annually on or before December 1 of each year.543
(b)  Any licensee or registrant making proper application on or before December 1 for the544
renewal of a license or registration for the following calendar year shall be permitted to545
continue to operate pending final approval or disapproval of the application if the546
application for the license or registration is not acted upon prior to January 1.  For purposes547
of this subsection, a 'proper application' shall include a requirement that all documentation548
requesting a renewal has been completed, the requisite continuing education has been549
successfully obtained, and payment has been made of all outstanding fines and applicable550
fees required by this article.551
(c)  No investigation fee shall be payable in connection with the renewal application, but552
an annual license or registration fee established by regulation of the department to defray553
the cost of supervision shall be paid with each renewal application, which fee shall not be554
refunded.555
(d)  Any person holding a license or registration pursuant to this article who fails to file a556
proper application for a license or registration renewal for the following license year on or557
before December 1 and who files an application after December 1 may be required to pay,558
H. B. 876
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in addition to the license or registration fees, a fine in an amount to be established by559
regulations promulgated by the department."560
SECTION 1-25.561
Said title is further amended in Code Section 7-1-1007, relating to licensee to give notice of562
certain actions brought against it by a creditor or borrower and notice to the department of563
cancellation of bond, by revising subsection (d) as follows:564
"(d)  A licensee or registrant shall, within ten days after knowledge of the event, report in565
writing to the department:566
(1)  Any knowledge or discovery of an act prohibited by Code Section 7-1-1013;567
(2)  The discharge of any employee for dishonest or fraudulent acts; and568
(3)  Any administrative, civil, or criminal action initiated against the licensee, registrant,569
or any of its control persons by any government entity.570
Any person reporting such an event shall be protected from civil liability as provided in571
Code Section 7-1-1009."572
SECTION 1-26.573
Said title is further amended by revising Code Section 7-1-1008, relating to acquisition of574
10 percent or more of the voting shares or of the ownership of any other entity licensed or575
registered to conduct business under this article, as follows:576
"7-1-1008.577
(a)  Except as provided in this Code section, no person shall acquire directly or indirectly578
10 percent or more of the voting shares of a corporation or 10 percent or more of the579
ownership of any other entity licensed or registered to conduct business as a mortgage580
broker or mortgage lender under this article unless it first:581
(1) Files an application with the department in such form as the department may582
prescribe from time to time;583
H. B. 876
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(2)  Delivers such other information to the department as the department may require
584
concerning the financial responsibility, background, experience, and activities of the585
applicant, its directors and officers, if a corporation, and its members, if applicable, and586
of any proposed new directors, officers, or members of the licensee or registrant
; and587
(3)  Pays such application fee as the department may prescribe.588
(b)  Upon the filing and investigation of an application, the department shall permit the589
applicant to acquire the interest in the mortgage broker or mortgage lender licensee or590
registrant if it finds that the applicant and its members, if applicable, its directors and591
officers, if a corporation, and any proposed new directors and officers have the financial592
responsibility, character, reputation, experience, and general fitness to warrant belief that593
the business will be operated efficiently and fairly, in the public interest, and in accordance594
with law.  The department shall grant or deny the application within 60 days from the date595
a completed application accompanied by the required fee is filed unless the period is596
extended by order of the department reciting the reasons for the extension. If the597
application is denied, the department shall notify the applicant of the denial and the reasons598
for the denial.599
(c)  The provisions of this Code section shall not apply to:600
(1) The acquisition of an interest in a licensee or registrant directly or indirectly,601
including an acquisition by merger or consolidation by or with a person licensed or602
registered by this article or a person exempt from this article under Code Section603
7-1-1001;604
(2)  The acquisition of an interest in a mortgage broker or mortgage lender licensee or605
registrant directly or indirectly, including an acquisition by merger or consolidation by606
or with a person affiliated through common ownership with the licensee or registrant; or607
(3)  The acquisition of an interest in a mortgage broker or mortgage lender licensee or608
registrant by a person by bequest, descent, or survivorship or by operation of law.609
H. B. 876
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The person acquiring an interest in a mortgage broker or mortgage lender licensee or610
registrant in a transaction which is exempt from filing an application by this subsection611
shall send written notice to the department of such acquisition within 30 days of the closing612
of such transaction."613
SECTION 1-27.614
Said title is further amended in Code Section 7-1-1009, relating to maintenance of books,615
accounts, and records, investigation and examination of licensees and registrants by616
department, confidentiality, and exemptions from civil liability, by revising subsections (a)617
and (b), paragraph (5) of subsection (d), and subsection (g) as follows:618
"(a)  Mortgage brokers and mortgage lenders required to be licensed or registered under this619
article shall maintain at their offices or such other location as the department shall permit620
such books, accounts, and records as the department may reasonably require in order to621
determine whether such mortgage brokers and mortgage lenders are complying with the622
provisions of this article and rules and regulations adopted in furtherance thereof.  Such623
books, accounts, and records shall be maintained separately and distinctly from any other624
personal or unrelated business matters in which the mortgage brokers and mortgage lenders625
are involved.626
(b)  The department shall investigate and examine the affairs, business, premises, and627
records of any mortgage broker or mortgage lender required to be licensed or registered628
under this article insofar as such affairs, business, premises, and records pertain to any629
business for which a license or registration is required by this article.  The department may630
conduct such investigations and examinations as often as it deems necessary in order to631
carry out the purposes of this article, but shall conduct such investigations and632
examinations at least once every 60 months.  In order to avoid unnecessary duplication of633
examinations, the department may accept examination reports performed and produced by634
other state or federal agencies, unless the department determines that the examinations are635
H. B. 876
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not available or do not provide the information necessary to fulfill the responsibilities of
636
the department under this article.  Notwithstanding the provisions of this subsection, the637
department may alter the frequency or scope of investigations and examinations through638
rules and regulations prescribed by the department.  If the department determines, based639
on the records submitted to the department and past history of operations of the licensee640
in the state, that such investigations or examinations are unnecessary, then the department641
may waive such investigations and examinations.  In the case of registrants, the department
642
shall not be required to conduct such examinations if it determines that the registrant has643
been adequately examined by another bank regulatory agency."644
"(5)  Conduct an on-site examination without prior notice, with the licensee or registrant645
to pay the reasonably incurred costs for such examination, including out-of-state travel646
expenses, and the department shall be authorized to net such out-of-state expenses against647
the payments from the licensee or registrant."648
"(g)  Examinations and investigations conducted under this article and information obtained649
by the department in the course of its duties under this article are confidential, except as650
provided in this subsection, pursuant to the provisions of Code Section 7-1-70.  In addition651
to the exceptions set forth in subsection (b) of Code Section 7-1-70 and in paragraphs (3)652
and (4) of subsection (d) of this Code section, the department is authorized to share653
information obtained under this article with other state and federal regulatory agencies or654
law enforcement authorities.  In the case of such sharing, the safeguards to confidentiality655
already in place within such agencies or authorities shall be deemed adequate.  The656
commissioner or an examiner specifically designated may disclose such limited657
information as is necessary to conduct a civil or administrative investigation or proceeding. 658
Information contained in the records of the department which is not confidential and may659
be made available to the public either on the department's website, upon receipt by the660
department of a written request, or in the Nationwide Multistate Licensing System and661
Registry shall include:662
H. B. 876
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(1) For mortgage brokers and mortgage lenders, the name, business address, and
663
telephone, facsimile
 designated email address, and unique identifier of a licensee or664
registrant;665
(2)  For mortgage brokers and mortgage lenders, the names and titles of the principal666
officers;667
(3)  For mortgage brokers and mortgage lenders, the name of the owner or owners668
thereof;669
(4)  For mortgage brokers and mortgage lenders, the business address of a licensee's or670
registrant's agent for service; and671
(5)  The terms of or a copy of any bond filed by a licensee or registrant."672
SECTION 1-28.673
Said title is further amended by revising Code Section 7-1-1010, relating to annual financial674
statements, as follows:675
"7-1-1010.676
(a) If a mortgage broker is a United States Department of Housing and Urban677
Development loan correspondent, such broker shall also submit to the department the audit678
that is required for the United States Department of Housing and Urban Development.  The679
department may require the mortgage broker to have made an audit of the books and affairs680
of the licensed or registered business and submit to the department an audited financial681
statement if the department finds that such an audit is necessary to determine whether the682
mortgage broker is complying with the provisions of this article and the rules and683
regulations adopted in furtherance of this article.684
(b)  Each mortgage lender licensed or registered under this article shall at least once each685
year have made an audit of the books and affairs of the licensed or registered business and686
submit to the department at renewal an audited financial statement, except that a mortgage687
lender licensed or registered under this article which is a subsidiary shall comply with this688
H. B. 876
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provision by annually providing a consolidated audited financial statement of its parent
689
company and a financial statement, which may be unaudited, of the licensee or registrant
690
which is prepared in accordance with generally accepted accounting principles.  A lender691
who utilizes a bond in lieu of an audit need not supply such audit, unless specially required692
by the department.  An audit shall be less than 15 months old to be acceptable.  The693
department may by regulation establish additional minimum standards for audits and694
reports under this Code section."695
SECTION 1-29.696
Said title is further amended by revising Code Section 7-1-1011, relating to annual fees, as697
follows:698
"7-1-1011.699
(a)  The department may, by regulation, prescribe annual fees to be paid by licensees and700
registrants, which fees shall be set at levels necessary to defray costs and expenses incurred701
by the state in providing the examinations and supervision required by this article and its702
federally mandated participation in the Nationwide Multistate Licensing System and703
Registry, and which fees may vary according to whether a person is a licensee or registrant704
or is a mortgage loan originator, mortgage broker, or a mortgage lender.705
(b)(1)  As used in this subsection, the term 'collecting agent' means the person listed as706
the secured party on a security deed or other loan document that establishes a lien on the707
residential real property taken as collateral at the time of the closing of the mortgage loan708
transaction.709
(2)  There shall be imposed on the closing of every mortgage loan subject to regulation710
under this article which, as defined in Code Section 7-1-1000, includes all mortgage711
loans, whether or not closed by a mortgage broker or mortgage lender licensee or712
registrant, a fee of $10.00.  The fee shall be paid by the borrower to the collecting agent713
at the time of closing of the mortgage loan transaction.  The collecting agent shall remit714
H. B. 876
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the fee to the department at the time and in the manner specified by regulation of the
715
department.  Revenue collected by the department pursuant to this subsection shall be716
deposited in the general fund of the state.717
(3)  The fee imposed by this subsection shall be a debt from the borrower to the collecting718
agent until such assessment is paid and shall be recoverable at law in the same manner719
as authorized for the recovery of other debts.  Any collecting agent who neglects, fails,720
or refuses to collect the fee imposed by this subsection shall be liable for the payment of721
the fee."722
SECTION 1-30.723
Said title is further amended by revising Code Section 7-1-1013, relating to prohibition of724
certain acts, as follows:725
"7-1-1013.726
It shall be prohibited for any person transacting a mortgage business in or from this state,727
including any person required to be licensed or registered
 under this article and any person728
exempted from the licensing or registration requirements of this article under Code Section729
7-1-1001, to:730
(1)  Misrepresent the material facts, make false statements or promises, or submit false731
statements or documents likely to influence, persuade, or induce an applicant for a732
mortgage loan, a mortgagee, or a mortgagor to take a mortgage loan, or, through agents733
or otherwise, pursue a course of misrepresentation by use of fraudulent or unauthorized734
documents or other means to the department or anyone;735
(2)  Misrepresent or conceal or cause another to misrepresent or conceal material factors,736
terms, or conditions of a transaction to which a mortgage lender or broker is a party,737
pertinent to an applicant or application for a mortgage loan or a mortgagor;738
(3)  Fail to disburse funds in accordance with a written commitment or agreement to739
make a mortgage loan;740
H. B. 876
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(4)  Improperly refuse to issue a satisfaction of a mortgage loan;
741
(5)  Fail to account for or deliver to any person any personal property obtained in742
connection with a mortgage loan such as money, funds, deposit, check, draft, mortgage,743
or other document or thing of value which has come into the possession of a licensee or
744
registrant and which is not the property of the licensee or registrant, or which the745
mortgage lender or broker is not in law or at equity entitled to retain;746
(6)  Engage in any transaction, practice, or course of business which is not in good faith747
or fair dealing, or which operates a fraud upon any person, in connection with the748
attempted or actual making of, purchase of, transfer of, or sale of any mortgage loan;749
(7)  Engage in any fraudulent home mortgage underwriting practices;750
(8)  Induce, require, or otherwise permit the applicant for a mortgage loan or mortgagor751
to sign a security deed, note, loan application, or other pertinent financial disclosure752
documents with any blank spaces to be filled in after it has been signed, except blank753
spaces relating to recording or other incidental information not available at the time of754
signing;755
(9)  Make, directly or indirectly, any residential mortgage loan with the intent to foreclose756
on the borrower's property.  For purposes of this paragraph, there shall be a presumption757
that a person has made a residential mortgage loan with the intent to foreclose on the758
borrower's property if the following circumstances can be demonstrated:759
(A)  Lack of substantial benefit to the borrower;760
(B)  Lack of probability of full payment of the loan by the borrower; and761
(C)  A significant proportion of similarly foreclosed loans by such person;762
(10)  Provide an extension of credit or collect a mortgage debt by extortionate means; or763
(11)  Purposely withhold, delete, destroy, or alter information requested by an examiner764
of the department or make false statements or material misrepresentations to the765
department or the Nationwide Multistate Licensing System and Registry or in connection766
with any investigation conducted by the department or another governmental agency."767
H. B. 876
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SECTION 1-31.
768
Said title is further amended by revising Code Section 7-1-1014, relating to regulations769
governing disclosure required to applicants for mortgage loans, as follows:770
"7-1-1014.771
In addition to such other rules, regulations, and policies as the department may promulgate772
to effectuate the purposes of this article, the department shall promulgate regulations773
governing the disclosure required to be made to applicants for mortgage loans, including,774
without limitation, the following requirements:775
(1)  Any person required to be licensed or registered
 under this article shall provide to776
each applicant for a mortgage loan prior to accepting an application fee or any third-party777
fee such as a property appraisal fee, credit report fee, or any other similar fee a disclosure778
of the fees payable and the conditions under which such fees may be refundable;779
(2)  Any mortgage lender required to be licensed or registered under this article shall780
make available to each applicant for a mortgage loan at or before the time a commitment781
to make a mortgage loan is given a written disclosure of the fees to be paid in connection782
with the commitment and the loan, or the manner in which such fees shall be determined783
and the conditions under which such fees may be refundable; and784
(3)  Any mortgage lender required to be licensed or registered under this article shall785
disclose to each borrower of a mortgage loan that failure to meet every condition of the786
mortgage loan may result in the loss of the borrower's property through foreclosure.  The787
borrower shall be required to sign the disclosure at or before the time of the closing of the788
mortgage loan.789
The department may prescribe standards regarding the accuracy of required disclosures and790
may provide for applicable administrative or civil penalties or fines for failure to provide791
the disclosures or to meet the prescribed standards."792
H. B. 876
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SECTION 1-32.
793
Said title is further amended by revising Code Section 7-1-1015, relating to rules relative to794
escrow accounts, as follows:795
"7-1-1015.796
The department may promulgate rules with respect to the placement in escrow accounts by797
any person required to be licensed or registered
 by this article of any money, fund, deposit,798
check, or draft entrusted to it by any persons dealing with it as a residential mortgage loan799
originator, mortgage broker, mortgage lender, or servicer."800
SECTION 1-33.801
Said title is further amended in Code Section 7-1-1016, relating to regulations relative to802
advertising, by revising paragraph (2) as follows:803
"(2)  All advertisements, including websites, disseminated by a licensee or a registrant in804
this state by any means shall contain the name, which shall conform to a name on record805
with the department, and unique identifier, which shall clearly indicate that the number806
was issued by the Nationwide Multistate Licensing System and Registry, of the licensee807
or registrant."808
SECTION 1-34.809
Said title is further amended in Code Section 7-1-1017, relating to suspension or revocation810
of licenses, registrations, or mortgage broker education approval, notice, judicial review, and811
effect on preexisting contract, by revising paragraph (1) of subsection (a) and subsections (b),812
(c), (d), (e), and (f) as follows:813
"(a)(1) The department may suspend or revoke an original or renewal license,814
registration, or mortgage broker education approval on any ground on which it might815
refuse to issue an original license, registration, or approval or for a violation of any816
provision of this article or of Chapter 6A of this title or any rule or regulation issued817
H. B. 876
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under this article or under Chapter 6A of this title, including failure to provide fees on a
818
timely basis, or for failure of the licensee or registrant
 to pay, within 30 days after it819
becomes final, a judgment recovered in any court within this state by a claimant or820
creditor in an action arising out of the licensee's or registrant's business in this state as a821
mortgage loan originator, mortgage lender, or mortgage broker or for violation of a final822
order previously issued by the department."823
"(b)  Notice of the department's intention to enter an order denying an application for a824
license or registration under this article or of an order suspending or revoking a license or825
registration under this article shall be given to the applicant, or licensee, or registrant in826
writing, sent by email to the email address of record for the applicant, or licensee, or827
registrant, or registered or certified mail or statutory overnight delivery addressed to the828
principal place of business of such applicant, or licensee, or registrant.  Within 20 days of829
the date of the notice of intention to enter an order of denial, suspension, or revocation830
under this article, the applicant, or licensee, or registrant may request in writing a hearing831
to contest the order.  If a hearing is not requested in writing within 20 days of the date of832
such notice of intention, the department shall enter a final order regarding the denial,833
suspension, or revocation.  If a person refuses to accept service of the notice or order by834
registered or certified mail or statutory overnight delivery and the notice sent by email to835
the email address of record has not been delivered to the person, the notice or order shall836
be served by the commissioner or the commissioner's authorized representative under any837
other method of lawful service; and the person shall be personally liable to the838
commissioner for a sum equal to the actual costs incurred to serve the notice or order.  This839
liability shall be paid upon notice and demand by the commissioner or the commissioner's840
representative and shall be assessed and collected in the same manner as other fees or fines841
administered by the commissioner.  Any final order of the department denying, suspending,842
or revoking a license or registration shall state the grounds upon which it is based and shall843
be effective on the date of issuance.  The department shall promptly send a copy of such844
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order by mail addressed to the principal place of business of such applicant, or licensee, or845
registrant and post a copy of such order on the Nationwide Multistate Licensing System846
and Registry.  For purposes of this subsection, the term 'email address of record' means the847
email address that the applicant, or licensee, or registrant has designated as their email848
address for regulatory contact on file with the Nationwide Multistate Licensing System and849
Registry.850
(c) A licensee or registrant may, at the discretion of and with the consent of the851
department, agree to a voluntary suspension of its license or registration for a period of852
time to be agreed upon by the parties.  Such order of suspension shall be considered a final853
order and shall be forwarded to the licensee or registrant in the same manner as any other854
final order.  Grounds for such a voluntary suspension shall be the same as provided in855
subsection (a) of this Code section, and the licensee or registrant may waive its right to an856
administrative hearing before issuance of the suspension. With the consent of the857
department, a licensee or registrant may voluntarily surrender its license or registration. 858
A voluntary surrender of a license or registration shall have the same effect as a revocation859
of said license or registration.  A voluntary surrender of a license shall be regarded as a860
final order of the department.861
(d)  A decision of the department denying a license or registration application, original or862
renewal, shall be conclusive, except that it may be subject to judicial review under Code863
Section 7-1-90. A decision of the department suspending or revoking a license or864
registration shall be subject to judicial review in the same manner as a decision of the865
department to take possession of the assets and business of a bank under Code Section866
7-1-155.867
(e)  Except as otherwise provided by law, a revocation, suspension, or surrender of a868
license or registration shall not impair or affect the obligation of a preexisting contract869
between the licensee and another person.870
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(f)  Nothing in this article shall preclude a mortgage broker or mortgage lender whose
871
license or registration
 has been suspended or revoked from continuing to service mortgage872
loans pursuant to servicing contracts in existence at the time of the suspension or873
revocation for a period not to exceed six months after the date of the final order of the874
department suspending or revoking the license or registration."875
SECTION 1-35.876
Said title is further amended in Code Section 7-1-1018, relating to cease and desist orders,877
enforcement procedure, civil penalties, and fines, by revising subsection (a) as follows:878
"(a)  Whenever it shall appear to the department that any person required to be licensed or879
registered under this article or employed by a licensee or who would be covered by the880
prohibitions in Code Section 7-1-1013 has violated any law of this state or any order or881
regulation of the department, the department may issue an initial written order requiring882
such person to cease and desist immediately from such unauthorized practices.  Such cease883
and desist order shall be final 20 days after it is issued unless the person to whom it is884
issued makes a written request within such 20 day period for a hearing.  The hearing shall885
be conducted in accordance with Chapter 13 of Title 50, the 'Georgia Administrative886
Procedure Act.'  A cease and desist order to an unlicensed person that orders such person887
to cease doing a mortgage business without the appropriate license shall be final 30 days888
from the date of issuance, and there shall be no opportunity for an administrative hearing. 889
If the proper license or evidence of exemption or valid employment status during the time890
of the alleged offense is delivered to the department within the 30 day period, the order891
shall be rescinded by the department.  If a cease and desist order is issued to a person who892
has been sent a notice of bond cancellation and if the bond is reinstated or replaced and893
such documentation is delivered to the department within the 20 day period following the894
date of issuance of the order, the order shall be rescinded.  If the notice of reinstatement of895
the bond is not received within the 20 days, the license shall expire at the end of the 20 day896
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period, and the person shall be required to make a new application for license and pay the
897
applicable fees.  In the case of an unlawful purchase of mortgage loans, such initial cease898
and desist order to a purchaser shall constitute the knowledge required under subsection (b)899
of Code Section 7-1-1002 for any subsequent violations.  Any cease and desist order sent900
to the person at both his or her personal and business addresses pursuant to this Code901
section that is returned to the department as 'refused' or 'unclaimed' shall be deemed as902
received and sufficiently served."903
SECTION 1-36.904
Said title is further amended in Code Section 7-1-1114, relating to certificate of authority,905
notification of revocation of certificate of authority, and foreign corporation requirements,906
by revising subsection (c) as follows:907
"(c)  Notwithstanding the definition of the term 'foreign corporation' in paragraph (13) of908
Code Section 14-2-140, all of the provisions of Article 15 of Chapter 2 of Title 14, relating909
to foreign corporations, shall apply to all foreign banks establishing and maintaining a910
Georgia state branch or Georgia state agency in this state.  Such foreign banks shall file an
911
annual registration with the Secretary of State as set forth in Code Section 14-2-1622."912
SECTION 1-37.913
Said title is further amended by revising Code Section 7-3-17, which is reserved, as follows:914
"7-3-17.915
Notwithstanding the provisions of subsection (b) of Code Section 13-1-14, when any916
installment loan upon which a closing fee has been charged by a licensee is prepaid by any917
means within 90 days of the date of the loan, the borrower shall be entitled to a refund or918
credit of the closing fee, calculated as follows: the installment lender shall determine, on919
a daily pro rata basis over the original term of the loan, the amount of the closing fee that920
has accumulated prior to the prepayment.  The installment lender shall refund or credit the921
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borrower with the pro rata amount that has not accumulated prior to the prepayment;922
provided, however, that the installment lender may retain from the collected closing fee the923
greater of the accumulated pro rata closing fee or $25.00. Reserved."924
SECTION 1-38.925
Said title is further amended by revising Code Section 7-9-2, relating to definitions relative926
to merchant acquirer limited purpose banks, as follows:927
"7-9-2.928
As used in this chapter, the term:929
(1)  'Articles of incorporation' or 'articles' means the articles or certificate of incorporation930
of a corporation and shall include, when used in reference to a limited liability company,931
the articles or certificate of organization of a limited liability company.932
(2)  'Bylaws' means the bylaws of a corporation and shall include, when used in reference933
to a limited liability company, the operating agreement, regulations, or similar documents934
regarding the governance and management of a limited liability company.935
(3) 'Commissioner' means the commissioner of banking and finance.936
(1.1)(4) 'Control person' means any individual who directs the affairs or controls or937
establishes policy for a merchant acquirer limited purpose bank.938
(2)(5) 'Corporation' means a corporation organized under the laws of this state, the939
United States, or any other state, territory, or dependency of the United States or under940
the laws of a foreign country.  Such term shall include a similarly organized limited941
liability company.942
(3)(6) 'Department' means the Department of Banking and Finance.943
(7)  'Director' means a director of a corporation and shall include, when used in reference944
to a limited liability company, a manager or managing member of a limited liability945
company, as applicable.946
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(4)(8) 'Eligible organization' means a corporation that at all times maintains an office in947
the State of Georgia at which it or its parent, affiliates, or subsidiaries employ at least 250948
persons residing in this state who are directly or indirectly engaged in merchant acquiring949
activities or settlement activities, including providing the following services related to950
merchant acquiring activities or settlement activities, either for the eligible organization951
or on behalf of others:952
(A)  Administrative support;953
(B)  Information technology support;954
(C)  Financial support; and955
(D)  Tax and finance support.956
(5)(9) 'Holding company' means any company that controls a merchant acquirer limited957
purpose bank.  For purposes of this paragraph, the terms 'company' and 'control' shall958
have the meanings set forth in Code Section 7-1-605.959
(10)  'Incorporator' means the incorporator or organizer of a corporation and shall include,960
when used in reference to a limited liability company, an organizer of a limited liability961
company.962
(6)(11) 'Merchant' means an individual or entity authorized by a payment card network963
to accept payments in exchange for goods or services.964
(7)(12) 'Merchant acquirer limited purpose bank' means a corporation organized under965
this chapter and the activities of which are limited to those permitted under Code Section966
7-9-12.967
(8)(13) 'Merchant acquiring activities' means the various activities associated with968
effecting transactions within payment card networks, including obtaining and maintaining969
membership in one or more payment card networks; signing up and underwriting970
merchants to accept payment card network branded payment cards; providing the means971
to authorize valid card transactions at client merchant locations; facilitating the clearing972
and settlement of the transactions through a payment card network; providing access to973
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one or more payment card networks to merchant acquirer limited purpose bank affiliates,
974
customers, or customers of its affiliates; sponsoring the participation of merchant acquirer975
limited purpose bank affiliates, customers, or customers of its affiliates in one or more976
payment card networks; and conducting such other activities as may be necessary,977
convenient, or incidental to effecting transactions within payment card networks.978
(8.1)
(14) 'Merchant funds' means funds received by a merchant acquirer limited purpose979
bank as a result of its performance of clearing, settlement, or any other authorized980
activities which are ultimately payable to a merchant.981
(9)(15) 'Payment card network' means any organization, group, system, or other982
collection of individuals or entities that is organized to allow participants to accept or983
make payments for goods or services using a credit card, debit card, or any other payment984
device.985
(10)(16) 'Self-acquiring activities' means the act of a merchant, for itself or through an986
affiliated entity, engaging in merchant acquiring or settlement activities on its own behalf987
for payments it, or its affiliated entity, receives for goods and services it, or its affiliated988
entity, provides to consumers.989
(11)(17) 'Settlement activities' means the processing of payment card transactions to send990
to a payment card network for processing, to make payments to a merchant, and,991
ultimately, for cardholder billing.992
(18)  'Shareholder' means a person in whose name shares are registered in the records of993
a corporation and shall include, when used in reference to a limited liability company, a994
member of a limited liability company.995
(19)  'Shares' means any class of shares of capital stock of a corporation and shall include,996
when used in reference to a limited liability company, the membership interests of a997
limited liability company."998
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SECTION 1-39.
999
Said title is further amended in Code Section 7-9-4, relating to application, fees, and1000
minimum number of employees, by revising subsection (c) as follows:1001
"(c)  The merchant acquirer limited purpose bank shall have, within one year after the date1002
it receives its charter
 begins operations, no fewer than 50 employees located in this state1003
devoted to merchant acquiring activities; provided, however, that a merchant acquirer1004
limited purpose bank may contract with an eligible organization for the performance of1005
merchant acquiring activities, settlement activities, or any of the other services identified1006
in paragraph (4)(8) of Code Section 7-9-2, and when a merchant acquirer limited purpose1007
bank enters into such contracts with an eligible organization for merchant acquiring1008
activities, settlement activities, or any other services identified in paragraph (4)(8) of Code1009
Section 7-9-2, the minimum number of employees in this state shall be determined by the1010
commissioner at a level to assure the continued and substantive presence of the merchant1011
acquirer limited purpose bank in this state for the purpose of conducting its corporate1012
affairs and operations.  If a merchant acquirer limited purpose bank contracts with an1013
eligible organization that is an affiliate of the merchant acquirer limited purpose bank, the1014
commissioner shall consider the eligible organization's or its parent's, affiliates', or1015
subsidiaries' employees engaged on behalf of the merchant acquirer limited purpose bank1016
as employees of the merchant acquirer limited purpose bank for purposes of complying1017
with this subsection."1018
SECTION 1-40.1019
Said title is further amended in Code Section 7-9-5, relating to articles of incorporation,1020
filing, publication, registered agent, and administration by board of directors, by revising1021
paragraph (5) of subsection (a), subsection (c), and subsection (e) as follows:1022
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"(5)  A statement that 'This corporation is subject to the "Georgia Merchant Acquirer
1023
Limited Purpose Bank Act"' or 'This limited liability company is subject to the "Georgia
1024
Merchant Acquirer Limited Purpose Bank Act,"' as applicable;"1025
"(c)  The applicant shall file with the department the articles of incorporation, together with1026
any fee required by the department.  Such filing shall constitute an application for a charter1027
and approval to operate as a merchant acquirer limited purpose bank.  Immediately upon1028
the filing of the articles of incorporation, the department shall certify a copy of the articles1029
and return it to the applicant, who shall, in conformity with Code Section 7-1-7 and on the1030
next business day following the filing of the articles, transmit for publication in the1031
newspaper which is the official organ of the county where the merchant acquirer limited1032
purpose bank will be located a copy of the articles or, in lieu thereof, a statement that reads1033
substantially as follows:1034
'An application for a charter to operate as a merchant acquirer limited purpose bank to be1035
known as the _______ and to be located at ______________ in _____________ County,1036
Georgia, will be made to the Secretary of State of Georgia in accordance with Chapter1037
9 of Title 7 of the Official Code of Georgia Annotated, the "Georgia Merchant Acquirer1038
Limited Purpose Bank Act."  A copy of the articles of incorporation charter documents1039
of the proposed merchant acquirer limited purpose bank and the application have been1040
filed with the Department of Banking and Finance.'1041
The articles of incorporation or the statement must shall be published once a week for two1042
consecutive weeks with the first publication occurring within ten days of receipt by the1043
newspaper of the articles of incorporation or statement."1044
"(e)  The administration of business and affairs of a merchant acquirer limited purpose bank1045
shall be the responsibility of a board of directors consisting of at least three directors, a1046
majority of whom shall be residents of this state.  Upon request by a merchant acquirer1047
limited purpose bank, the department may waive or reduce the requirement that a majority1048
of the directors be residents of this state."1049
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SECTION 1-41.
1050
Said title is further amended by revising Code Section 7-9-8, relating to issuance of1051
certificate of incorporation by the Secretary of State, as follows:1052
"7-9-8.1053
The Secretary of State shall immediately issue a certificate of incorporation or certificate
1054
of organization to a proposed merchant acquirer limited purpose bank upon submission of:1055
(1)  Written approval of the articles of incorporation by the department with a copy1056
attached;1057
(2)  An affidavit executed by the duly authorized agent or publisher of a newspaper1058
swearing that the articles of incorporation or a summary statement publication as1059
provided for in Code Section 7-9-5 have been published; and1060
(3)  All required fees and charges required by law1061
so long as name of the proposed merchant acquirer limited purpose bank continues to be1062
reserved or is available.  The Secretary of State shall retain on file a copy of the certificate,1063
the articles of incorporation, the department's approval of the articles of incorporation, and1064
the publisher's certificate."1065
SECTION 1-42.1066
Said title is further amended by revising Code Section 7-9-11.8, relating to rights and1067
remedies of shareholders, as follows:1068
"7-9-11.8.1069
(a)  A shareholder of a merchant acquirer limited purpose bank which is a party to a plan1070
of proposed merger or consolidation under this chapter who objects to such plan shall be1071
entitled to the rights and remedies of a dissenting shareholder as determined under Chapter1072
2 of Title 14, known as the 'Georgia Business Corporation Code' or under Article 10 of1073
Chapter 11 of Title 14, as applicable.1074
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(b)  A resulting merchant acquirer limited purpose bank into which other or others have
1075
been merged or consolidated may require the return of original certificates of stock
1076
representing shares held by each shareholder in each or either of the merged or1077
consolidated institutions, or in lieu thereof may:1078
(1)  Issue to each shareholder new certificates for such number of shares of the resulting1079
acquirer limited purpose bank; or1080
(2)  Cause to be paid or delivered to each shareholder the amount of cash or securities of1081
any other corporation or combination of cash and such securities as, under the plan of1082
merger or consolidation, such shareholder is entitled to receive."1083
PART II1084
SECTION 2-1.1085
Said title is further amended in Code Section 7-6A-2, relating to definitions relative to the1086
Georgia Fair Lending Act, by revising paragraph (4) as follows:1087
"(4)  'Bona fide discount points' means loan discount points knowingly paid by the1088
borrower for the express purpose of reducing, and which in fact do result in a bona fide1089
reduction of, the interest rate applicable to the home loan; provided, however, that the1090
undiscounted interest rate for the home loan does not exceed by more than one percentage1091
point the required net yield for a 90 day standard mandatory delivery commitment for a1092
home loan with a reasonably comparable term from either the Federal National Mortgage1093
Association or the Federal Home Loan Mortgage Corporation, whichever is greater1094
average prime offer rate as defined in 12 C.F.R. 1026.35 that applies to a comparable1095
transaction, as published by the United States Consumer Financial Protection Bureau as1096
of the last date the discounted interest rate for the transaction is set before1097
consummation."1098
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PART III
1099
SECTION 3-1.1100
Title 10 of the Official Code of Georgia Annotated, relating to commerce and trade, is1101
amended in Code Section 10-1-439.1, relating to definitions relative to firearms industry1102
nondiscrimination, by revising paragraph (1) as follows:1103
"(1)  'Financial services' means any service or product offered to the consumer or business1104
market by a bank, trust company, building and loan association, credit union as defined1105
by Code Section 7-1-4, any merchant acquirer limited purpose bank as defined in1106
paragraph (7)
(12) of Code Section 7-9-2, or a federally chartered banking institution that1107
accepts state deposits."1108
SECTION 3-2.1109
Title 53 of the Official Code of Georgia Annotated, relating to wills, trusts, and1110
administration of estates, is amended in Code Section 53-12-2, relating to definitions relative1111
to trusts, by revising subparagraph (B) of paragraph (4) as follows:1112
"(B)  Any other corporation or limited liability company organized or existing under the1113
laws of any state of the United States, other than Georgia, and chartered or licensed1114
under the laws of such state; and"1115
PART IV1116
SECTION 4-1.1117
(a)  Except as provided for in subsection (b), this Act shall become effective on July 1, 2024.1118
(b)  This part and Part II of this Act shall become effective on June 1, 2024.1119
H. B. 876
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SECTION 4-2.
1120
All laws and parts of laws in conflict with this Act are repealed.1121
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