Georgia 2023-2024 Regular Session

Georgia House Bill HB876 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
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2		-	House Bill 876 ~~(AS PASSED HOUSE AND SENATE)~~
	1	+	24 LC 55 0142
	2	+	House Bill 876
3	3		By: Representatives Williamson of the 112
4	4		th
5	5		, Williams of the 148
6	6		th
7	7		, Dickey of the 145
8	8		th
9	9		,
10	10		Wade of the 9
11	11		th
12	12		, Chastain of the 7
13	13		th
14	14		, and others
15	15		A BILL TO BE ENTITLED
16	16		AN ACT
17	17		To amend Titles 7, 10, and 53 of the Official Code of Georgia, relating to banking and
18	18		1
19	19		finance, commerce and trade, and wills, trusts, and administration of estates, respectively,2
20	20		so as to update terminology; to revise procedures concerning incorporators of banks and trust3
21	21		companies; to revise requirements of articles of incorporation of banks and trust companies;4
22	22		to revise procedures concerning approval of banks and trust companies; to revise provisions5
23	23		concerning subordinated securities; to revise procedures concerning approval of certain6
24	24		transactions; to provide for definitions; to revise requirements concerning certain meetings7
25	25		of credit unions; to revise duties of directors of credit unions; to revise provisions concerning8
26	26		certain loans made by credit unions; to remove a requirement that certain mortgage brokers9
27	27		register with the Department of Banking and Finance; to provide for certain requirements of10
28	28		foreign banks; to provide for refund of installment loan closing fees; to revise requirements11
29	29		of merchant acquirer limited purpose banks; to provide for exceptions; to revise the12
30	30		definition of bona fide discount points; to conform cross-references; to provide for effective13
31	31		dates; to provide for related matters; to repeal conflicting laws; and for other purposes.14
32	32		BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:15
33	33		H. B. 876
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35	35		PART I
36	36		16
37	37		SECTION 1-1.17
38	38		Title 7 of the Official Code of Georgia Annotated, relating to banking and finance, is18
39	39		amended in Code Section 7-1-4, relating to definitions relative to financial institutions, by19
40	40		revising paragraph (37) as follows:20
41	41		"(37)(A)
42	42		'Subsidiary' means a corporation or a company, as defined in Code Section21
43	43		7-1-605, that is controlled by a financial institution which owns at least a majority of22
44	44		its voting shares. A financial institution shall be deemed to control such corporation23
45	45		or company if:24
46	46		(i) Such financial institution, directly or indirectly or acting through one or more25
47	47		other persons, owns, controls, or has the power to vote more than 50 percent of any26
48	48		class of voting securities of such corporation or company;27
49	49		(ii) Such financial institution controls in any manner the election of a majority of the28
50	50		directors or trustees of such corporation or company; or29
51	51		(iii) The department determines, after notice and opportunity for hearing, that such30
52	52		financial institution, directly or indirectly, exercises a controlling influence over the31
53	53		management or policies of such corporation or company.32
54	54		(B) Notwithstanding subparagraph (A) of this paragraph, a financial institution shall33
55	55		not be deemed to control a corporation or company solely due to the financial34
56	56		institution's ownership or voting power of securities of such corporation or company35
57	57		that is:36
58	58		(i) Held in a fiduciary capacity, unless such financial institution has sole discretionary37
59	59		authority to exercise voting rights with respect to such corporation or company; or38
60	60		(ii) Acquired in securing or collecting a debt previously contracted in good faith for39
61	61		a period of two years after the date of acquiring such ownership or voting power of40
62	62		securities."41
63	63		H. B. 876
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65	65		SECTION 1-2.
66	66		42
67	67		Said title is further amended by revising Code Section 7-1-391, relating to prohibition of43
68	68		promoters' fees, as follows:44
69	69		"7-1-391.45
70	70		(a) A bank or trust company shall not pay any fee, compensation, or commission for46
71	71		promotion in connection with its organization or apply any money received on account of47
72	72		shares or subscriptions, selling shares, or other services in connection with its organization,48
73	73		except legal fees, commissions or fees to disinterested third parties for sale of bank stock49
74	74		to others, and other usual and ordinary expenses necessary for its organization.50
75	75		(b) A majority of incorporators shall file with the department at the time of filing of the
76	76		51
77	77		articles an affidavit:52
78	78		(1) Setting forth all expenses incurred or to be incurred in connection with the53
79	79		organization of the bank or trust company, subscription for its shares, and sale of its54
80	80		shares; and55
81	81		(2) Stating that no fee, compensation, or commission prohibited by subsection (a) of this56
82	82		Code section has been paid or incurred.57
83	83		(c) In the event of a violation of this Code section the department may disapprove the58
84	84		articles on account of such violation."59
85	85		SECTION 1-3.60
86	86		Said title is further amended in Code Section 7-1-392, relating to articles of incorporation,61
87	87		advertisement of articles or notice of application, and naming registered agent, by revising62
88	88		paragraphs (8) and (9) of subsection (a) as follows:63
89	89		"(8) The name, place and county of residence, and post office address of each64
90	90		incorporator;65
91	91		(9) The name, occupation, citizenship, place and county of residence, and post office66
92	92		address of each of the first directors, which number shall not be less than five; and"67
93	93		H. B. 876
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95	95		SECTION 1-4.
96	96		68
97	97		Said title is further amended in Code Section 7-1-393, relating to additional filings with69
98	98		department and fees, by revising paragraph (2) as follows:70
99	99		"(2) The affidavit required by Code Section 7-1-391
100	100		Reserved;"71
101	101		SECTION 1-5.72
102	102		Said title is further amended in Code Section 7-1-394, relating to investigation, approval or73
103	103		disapproval by department, and abbreviated procedures, by revising subsection (b) as74
104	104		follows:75
105	105		"(b) Within 90 days after receipt of the articles and the filings and fees from the76
106	106		incorporators as required by Code Section 7-1-393, the department shall approve or77
107	107		disapprove the proposed bank or trust company; provided, however, that, if the approval78
108	108		of a federal public body is also required with respect to the bank or trust company, then the79
109	109		department may elect to not act on the application until after such approval is given. In80
110	110		giving approval, the department may impose conditions to be satisfied prior to the issuance81
111	111		of a permit to do business under Code Section 7-1-396. If the department, in its discretion,82
112	112		shall approve the proposed bank or trust company with or without conditions, it shall83
113	113		deliver its written approval of the articles to the Secretary of State and notify the84
114	114		incorporators of its action, provided that if the approval of a federal public body is also85
115	115		required with respect to the bank or trust company, then the department may, at its option,86
116	116		withhold its written approval from the Secretary of State until such approval is given and87
117	117		may, at its option, withdraw its approval if the federal public body refuses to grant its88
118	118		approval to the bank or trust company. If the department, in its discretion, shall disapprove89
119	119		the proposed bank or trust company, it shall notify the incorporators of its disapproval and90
120	120		state generally the unfavorable factors influencing its decision. The decision of the91
121	121		department shall be conclusive, except that it may be subject to judicial review as provided92
122	122		in Code Section 7-1-90."93
123	123		H. B. 876
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125	125		SECTION 1-6.
126	126		94
127	127		Said title is further amended in Code Section 7-1-419, relating to subordinated securities, by95
128	128		revising subsections (c) and (d) as follows:96
129	129		"(c) If at or after the payment or retirement of the subordinated securities of a bank or trust
130	130		97
131	131		company there is or would be a deficiency in the capital stock of the bank or trust98
132	132		company, such fact shall be reported to the department in advance of the payment or99
133	133		retirement. The department may, upon receipt of such report, order a restoration of capital100
134	134		stock or take other appropriate remedial measures under this chapter.101
135	135		(d) Subordinated securities shall not be considered in determining the amount of ad102
136	136		valorem taxes payable by the bank or trust company."103
137	137		SECTION 1-7.104
138	138		Said title is further amended in Code Section 7-1-590, relating to definitions relative to105
139	139		representative offices and registration, by revising paragraph (4) as follows:106
140	140		"(4) 'Loan production office' is a form of a representative office, where the solicitation107
141	141		of loans or of leases of personal property may occur, but not the closing of loans, the108
142	142		disbursement of loan proceeds to the borrower, nor any other banking business. It shall109
143	143		be established and registered as a representative office."110
144	144		SECTION 1-8.111
145	145		Said title is further amended in Code Section 7-1-606, relating to actions of bank holding112
146	146		companies unlawful without prior approval of commissioner and exceptions, by revising113
147	147		subparagraph (C) of paragraph (2) of subsection (a) as follows:114
148	148		"(C) A bank holding company of a national bank with its main office in Georgia115
149	149		acquiring a Georgia bank holding company, as such term is defined in paragraph (10)116
150	150		of Code Section 7-1-621, shall notify provided that such bank holding company has117
151	151		notified the department upon filing an application with the appropriate federal or state118
152	152		H. B. 876
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154	154		financial regulator and that the department has not objected to the transaction in119
155	155		accordance with the provisions of this subparagraph. The notification requirements of120
156	156		this subparagraph shall be satisfied by furnishing the department with a copy of the121
157	157		application or applications filed with the applicable bank supervisory agencies seeking122
158	158		approval for the proposed transaction and such other information as the department may123
159	159		request. In addition, the parties to such transaction shall file with the department and124
160	160		the Secretary of State a certificate of approval of the acquisition by the appropriate125
161	161		supervisory agencies prior to consummation of the transaction. The department may,126
162	162		for good cause shown, object to the transaction by letter to the bank holding company127
163	163		of a national bank with its main office in Georgia, the Georgia bank holding company,128
164	164		and to the appropriate federal or state financial regulator before consummation of the129
165	165		transaction. In the event of such objection, the acquisition cannot be consummated130
166	166		without the parties obtaining the approval of the department. Unless the department has131
167	167		objected to the transaction, the department shall forward to the Secretary of State132
168	168		written confirmation that the requirements of this subparagraph have been satisfied; or"133
169	169		SECTION 1-9.134
170	170		Said title is further amended in Code Section 7-1-623, relating to acquisitions not requiring135
171	171		department approval and notifications, by revising subsections (a) and (c) as follows:136
172	172		"(a) Subject to any applicable restrictions, an out-of-state bank holding company having137
173	173		a bank subsidiary with banking offices in Georgia may acquire a bank that does not have138
174	174		banking offices in this state, and an out-of-state bank holding company may acquire an139
175	175		out-of-state bank with branch offices in Georgia without the approval of the department."140
176	176		"(c) An out-of-state bank holding company acquiring a Georgia bank holding company or141
177	177		Georgia state bank shall notify the department upon filing an application with the142
178	178		appropriate federal or state financial regulator. The notification requirements of this143
179	179		subsection shall be satisfied by furnishing the department with a copy of the application or144
180	180		H. B. 876
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182	182		applications filed with the applicable bank supervisory agencies seeking approval for the145
183	183		proposed transaction and such other information as the department shall request. In146
184	184		addition, the parties to such transaction shall file with the department and the Secretary of147
185	185		State a certificate of approval of the acquisition by the appropriate supervisory agencies148
186	186		prior to consummation of the transaction. The department may, for good cause shown,149
187	187		object to the transaction by letter to the out-of-state bank holding company, the Georgia150
188	188		bank holding company, and to the appropriate federal or state financial regulator before151
189	189		consummation of the transaction. In the event of such objection, the acquisition cannot be152
190	190		consummated without the parties obtaining the approval of the department. Unless the153
191	191		department has objected to the transaction, the department shall forward to the Secretary154
192	192		of State written confirmation that the requirements of this subsection have been satisfied."155
193	193		SECTION 1-10.156
194	194		Said title is further amended in Code Section 7-1-630, relating to initial subscribers, contents157
195	195		and filing of articles, other required filings, fee for investigation, and selection of initial158
196	196		directors, by revising paragraph (2) of subsection (e) and adding a new subsection to read as159
197	197		follows:160
198	198		"(2) The number of directors, which must shall be not less than five nor more than 25,161
199	199		all of whom must shall be members, and their powers and duties, together with the duties162
200	200		of the executive officers elected by the board of directors;"163
201	201		"(h) For the purposes of this article, the term 'executive officer' means an individual who164
202	202		performs significant managerial, supervisory, or policy-making functions on behalf of a165
203	203		credit union, including, but not limited to, the chief executive officer, president, chief166
204	204		financial officer, chief operating officer, and other individuals who perform such167
205	205		functions."168
206	206		H. B. 876
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208	208		SECTION 1-11.
209	209		169
210	210		Said title is further amended in Code Section 7-1-633, relating to organizational meeting of170
211	211		directors and commencing of business, by revising subsection (a) as follows:171
212	212		"(a) Within 30 days after receipt of the certificate of incorporation from the Secretary of172
213	213		State, an organizational meeting of the board of directors named in the articles of173
214	214		incorporation shall be held for the purpose of accepting the certificate and bylaws,174
215	215		appointing an audit committee and
216	216		a credit committee or, in lieu thereof, loan officers and175
217	217		an audit committee pursuant to Code Section 7-1-658, naming the president, and electing176
218	218		or appointing the other executive officers, as provided in Code Section 7-1-655, who shall177
219	219		serve until the first directors' meeting after the first annual meeting. Notice of the meeting178
220	220		shall be given at least five days prior to the date of the meeting."179
221	221		SECTION 1-12.180
222	222		Said title is further amended in Code Section 7-1-635.1, relating to out-of-state credit unions,181
223	223		by revising subsection (e) as follows:182
224	224		"(e) A credit union which is approved under this Code section shall be exempt from the183
225	225		requirements of Article 15 of Chapter 2 3 of Title 14."184
226	226		SECTION 1-13.185
227	227		Said title is further amended in Code Section 7-1-651, relating to membership and shares, by186
228	228		revising subsection (b) as follows:187
229	229		"(b) Societies, associations, partnerships, limited liability companies, and corporations188
230	230		composed of persons who are eligible for membership or headquartered within the field of189
231	231		membership may be admitted to membership in the same manner and under the same190
232	232		conditions as such persons."191
233	233		H. B. 876
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235	235		SECTION 1-14.
236	236		192
237	237		Said title is further amended by revising Code Section 7-1-655, relating to board of directors,193
238	238		credit and audit committees, officers, oaths of officials, removal from office, suspension of194
239	239		member, filling of vacancies, and notification to department of change in president or chief195
240	240		executive officers, as follows:196
241	241		"7-1-655.197
242	242		(a) At the first annual meeting, the members shall elect from among their number a board198
243	243		of directors of no less than five nor more than 25 and at each annual meeting thereafter199
244	244		shall elect successors to the members of the board of directors whose terms of office expire200
245	245		at such annual meeting.201
246	246		(b) Except as this Code section permits the bylaws of a credit union to provide otherwise,202
247	247		members of the board of directors elected at the first annual meeting shall serve until the203
248	248		next annual meeting and until their successors are elected and qualified
249	249		. A credit union204
250	250		may in its bylaws provide for staggered elections for members of the board of directors;205
251	251		but in that event the bylaws shall provide that as nearly as possible one-third of the board206
252	252		shall be elected at each annual meeting.207
253	253		(c) At the organizational meeting and at its first meeting after each annual meeting of the208
254	254		members, the board of directors shall appoint an audit committee, credit committee,209
255	255		chairperson, and secretary, and such other. In addition, the board of directors may appoint210
256	256		other committees or executive officers consistent with the bylaws as the board deems211
257	257		desirable. No member of the audit committee may be an employee of the credit union.212
258	258		(d) The chairperson of the credit and audit committees shall be appointed by the board213
259	259		from among its number. Both the credit and audit committees shall be accountable to the214
260	260		board and members of such committees may be removed by the board.215
261	261		(e) Officers and the committee members elected or appointed at the organizational meeting216
262	262		shall serve until the first annual meeting. Thereafter, the terms of such persons Directors217
263	263		shall be serve until their successors are chosen or have duly qualified. An officer A218
264	264		H. B. 876
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266	266		director elected or appointed to fill an unexpired term shall be elected or appointed for the219
267	267		balance of that term.220
268	268		(f) All members of the board and all officers of directors and committee members shall be221
269	269		sworn to perform faithfully the duties of their several offices in accordance with this222
270	270		chapter and the bylaws or as otherwise lawfully established. The oaths shall be subscribed223
271	271		in writing and a copy thereof shall be retained in the minutes of the meetings of the board. 224
272	272		The oaths shall not modify in any manner the legal duties of or the standard of care for225
273	273		members of the board of directors and officers committee members in the exercise of such226
274	274		duties.227
275	275		(g) The entire board of directors or an individual director may be removed from office228
276	276		without cause by the vote of a quorum of members at a properly called meeting.229
277	277		(h) The board may remove a director from office if:230
278	278		(1) The director is adjudicated an incompetent by a court or is convicted of a felony;231
279	279		(2) The director does not, within 60 days of his or her election or such longer time as232
280	280		may be specified in the bylaws, accept the office in writing or by attendance at a meeting233
281	281		and fulfill other requirements for holding the office;234
282	282		(3) The director fails to attend regular meetings of the board for six successive meetings235
283	283		without having been excused by the board;236
284	284		(4) The director was an employee or duly elected officer of the credit union and was237
285	285		discharged or resigned at the request of the board for reasons relating to performance of238
286	286		duties as an employee or officer of the credit union; or239
287	287		(5) For any reason set forth in the bylaws of the credit union.240
288	288		(i) The board of directors, by a two-thirds' vote of a quorum of the board, may suspend any241
289	289		member of the credit union's board of directors, for cause, until the next membership242
290	290		meeting, which shall be held not less than seven nor more than 60 days after such243
291	291		suspension. The suspended person will be notified of the details of his or her suspension,244
292	292		and shall have the right to request a meeting with the board to reconsider his or her245
293	293		H. B. 876
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295	295		suspension prior to the membership meeting. Any suspended member of the board of
296	296		246
297	297		directors may be removed by a majority vote of a quorum of members at a properly called247
298	298		meeting. At such meeting of the membership, the suspended person shall have the right248
299	299		to make a presentation to the members and the suspension shall be acted upon by the249
300	300		members at such meeting and the person shall be removed from, or restored to, the board.250
301	301		(j) Vacancies in the board of directors, whether caused by removal or otherwise and251
302	302		including vacancies resulting from an increase in the number of directors, may be filled by252
303	303		the remaining members of the board, even though less than a quorum.253
304	304		(k) The credit union shall immediately notify the department upon a change in president254
305	305		or chief executive officer.255
306	306		(l) Each credit union shall keep minutes of the meetings of its members, board of directors,
307	307		256
308	308		and committees of directors."257
309	309		SECTION 1-15.258
310	310		Said title is further amended in Code Section 7-1-656, relating to duties of directors,259
311	311		meetings, prohibited activities, eligibility to vote, applicability of Code Section 7-1-490, and260
312	312		appointment of honorary director or director emeritus, by revising paragraphs (2) and (3) of261
313	313		subsection (a) as follows:262
314	314		"(2) To determine from time to time rates of interest and dividends which shall be263
315	315		allowed on deposits and charged on, loans, and income consistent with this article and264
316	316		other applicable laws and to authorize any interest refunds on such classes of loans and265
317	317		under such conditions as the board prescribes;266
318	318		(3) To fix the amount of the fidelity bond which shall be required of all directors,267
319	319		officers, employees, agents, or members having custody of funds, properties, or records;268
320	320		provided, however, that the amount of such fidelity bond shall not be less than such269
321	321		minimum requirements as shall be prescribed by regulation of the department and shall270
322	322		be in such form as may from time to time be approved by the department;"271
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325	325		SECTION 1-16.
326	326		272
327	327		Said title is further amended in Code Section 7-1-658, relating to loans, by revising273
328	328		subsection (c) and paragraph (5) of subsection (g) as follows:274
329	329		"(c) Loans may be made to executive
330	330		officers, directors, and committee members of the275
331	331		credit union under the same general terms and conditions as to other members of the credit276
332	332		union; provided, however, that no officer, director, committee member, or employee person277
333	333		shall participate in approving any loan in which he or she has a direct or indirect financial278
334	334		interest. The approval of all loans to officers, directors, and committee members of the279
335	335		credit union shall be reported to the board of directors at its next meeting."280
336	336		"(5) Unsecured obligations below the unsecured legal lending limit in conjunction with281
337	337		secured obligations below the secured legal lending limit so long as the total aggregate282
338	338		liability for both secured and unsecured obligations is $50,000.00 $150,000.00 or less."283
339	339		SECTION 1-17.284
340	340		Said title is further amended by revising Code Section 7-1-661, relating to fiscal year, special285
341	341		meetings of members, and voting and proxies, as follows:286
342	342		"7-1-661.287
343	343		The credit union fiscal year shall end at the close of business on December 31, unless the288
344	344		bylaws of the credit union specify a different fiscal year. Special Unless the articles of289
345	345		incorporation or bylaws provide otherwise, special meetings of the members may be held290
346	346		by order of the chairperson of the board of directors, the president or chief executive291
347	347		officer, or at least 20 percent of the directors in office. In addition, special meetings of the292
348	348		members may be held or on written request of 10 5 percent of the members or such other293
349	349		amount as the articles of incorporation or bylaws shall specify; provided, however, that294
350	350		such articles or bylaws shall not require written request from more than 25 percent of the295
351	351		members for a special meeting to be held. At all meetings a member shall have but one296
352	352		vote. No member may vote by proxy; but a society, association, partnership, or corporation297
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355	355		having membership in the credit union may be represented by one person duly authorized
356	356		298
357	357		by said society, association, partnership, or corporation to represent it. At any meeting the299
358	358		members may decide on any matter of interest to the credit union and may overrule the300
359	359		board of directors, provided that
360	360		the notice of the meeting shall have stated the question to301
361	361		be considered."302
362	362		SECTION 1-18.303
363	363		Said title is further amended in Code Section 7-1-1000, relating to definitions relative to304
364	364		licensing of mortgage lenders and mortgage brokers, by revising paragraphs (4), (16), (22)305
365	365		and (28) as follows:306
366	366		"(4) 'Commitment' or 'commitment agreement' means a statement by a lender required307
367	367		to be licensed or registered under this article that sets forth the terms and conditions upon308
368	368		which the lender is willing to make a particular mortgage loan to a particular borrower."309
369	369		"(16) 'Lock-in agreement' means a written agreement whereby a lender or a broker310
370	370		required to be licensed or registered under this article guarantees for a specified number311
371	371		of days or until a specified date the availability of a specified rate of interest for a312
372	372		mortgage loan, a specified formula by which the rate of interest will be determined, or313
373	373		a specific number of discount points if the mortgage loan is approved and closed within314
374	374		the stated period of time."315
375	375		"(22) 'Mortgage loan originator' means an individual who for compensation or gain or316
376	376		in the expectation of compensation or gain takes a residential mortgage loan application317
377	377		or offers or negotiates terms of a residential mortgage loan. Generally, this does not318
378	378		include an individual engaged solely as a loan processor or underwriter except as319
379	379		otherwise provided in subsection (a.1) of Code Section 7-1-1002; a person or entity that320
380	380		only performs real estate brokerage activities and is licensed or registered in accordance321
381	381		with Georgia law unless the person or entity is compensated by a mortgage lender,322
382	382		mortgage broker, or other mortgage loan originator or by any agent of such mortgage323
383	383		H. B. 876
384		-	- 13 - 24 LC 55 0142~~/AP~~
	384	+	- 13 - 24 LC 55 0142
385	385		lender, mortgage broker, or other mortgage loan originator; and does not include a person
386	386		324
387	387		or entity solely involved in extensions of credit relating to time-share plans, as that term325
388	388		is defined in 11 U.S.C. Section 101(53D)."326
389	389		"(28) 'Registrant' means any person required to register pursuant to Code
390	390		327
391	391		Sections 7-1-1001 and 7-1-1003.2. Reserved."328
392	392		SECTION 1-19.329
393	393		Said title is further amended in subsection (a) of Code Section 7-1-1001, relating to330
394	394		exemption for certain persons and entities, registration requirements, authored actions of331
395	395		licensed mortgage lenders, and violations, by revising the introductory language and332
396	396		paragraphs (2.1), (14), and (19), by deleting "or" at the end of subparagraph (B) of paragraph333
397	397		(18), and by adding a new paragraph to read as follows:334
398	398		"(a) The following persons shall not be required to obtain a mortgage loan originator,335
399	399		mortgage broker, or mortgage lender license and shall not be subject to the provisions of336
400	400		this article but may be subject to registration requirements, if registration of such persons337
401	401		is required by this article:"338
402	402		"(2.1) Any wholly owned subsidiary of any bank holding company; provided, however,339
403	403		that such subsidiary shall be subject to registration requirements in order to facilitate the340
404	404		department's handling of consumer inquiries. Such requirements are contained in Code341
405	405		Section 7-1-1003.3;"342
406	406		"(14) A natural person employed by a licensed or registered mortgage broker, a licensed343
407	407		or registered mortgage lender, or any person exempted from the mortgage broker or344
408	408		mortgage lender licensing requirements of this article when acting within the scope of345
409	409		employment and under the supervision of the mortgage broker or mortgage lender or346
410	410		exempted person as an employee and not as an independent contractor, except those347
411	411		natural persons exempt from licensure as a mortgage broker or mortgage lender under348
412	412		paragraph (17) of this subsection. To be exempt from licensure as a mortgage broker or349
413	413		H. B. 876
414		-	- 14 - 24 LC 55 0142~~/AP~~
	414	+	- 14 - 24 LC 55 0142
415	415		mortgage lender, a natural person shall be employed by only one such employer and shall
416	416		350
417	417		be at all times eligible for employment in compliance with the provisions and351
418	418		prohibitions of Code Section 7-1-1004. Such natural person, who meets the definition352
419	419		of mortgage loan originator provided in paragraph (22) of Code Section 7-1-1000, shall353
420	420		be subject to mortgage loan originator licensing requirements. A natural person against354
421	421		whom a cease and desist order has become final shall not qualify for this exemption while355
422	422		under the employment time restrictions of subsection (p) of Code Section 7-1-1004 if356
423	423		such order was based on a violation of Code Section 7-1-1002 or 7-1-1013 or whose357
424	424		license was revoked within five years of the date such person was hired;"358
425	425		"(19) Any person who purchases or holds closed mortgage loans for the sole purpose of359
426	426		securitization into a secondary market, provided that such person holds the individual360
427	427		loans for less than seven
428	428		14 days or less and does not service the loans, but with such361
429	429		loans being serviced instead by a person licensed as a mortgage lender or exempt from362
430	430		the licensing requirements of this article; or363
431	431		(20) Any trust, the trustee of which is a bank that satisfies the exemption from licensure364
432	432		set forth in paragraph (1) of this subsection, that purchases or holds closed mortgage365
433	433		loans for the sole purpose of securitization or otherwise transferring the loans into a366
434	434		secondary market, provided that the loans held in the trust are not serviced by the trust367
435	435		or the trustee of the trust but are instead serviced by a person licensed as a mortgage368
436	436		lender or exempt from the licensing requirements of this article. A trust that commences369
437	437		foreclosure proceedings on a mortgage loan held by the trust either through the trustee370
438	438		of the trust or otherwise shall not qualify for this exemption."371
439	439		SECTION 1-20.372
440	440		Said title is further amended in Code Section 7-1-1002, relating to transaction of business373
441	441		without a license, registration, or exemption prohibited, knowing purchase of mortgage loan374
442	442		H. B. 876
443		-	- 15 - 24 LC 55 0142~~/AP~~
	443	+	- 15 - 24 LC 55 0142
444	444		from unlicensed or nonexempt broker or lender prohibited, and liability of persons
445	445		375
446	446		controlling violators, by revising subsections (a) and (b) as follows:376
447	447		"(a) It shall be prohibited for any person to transact business in this state directly or377
448	448		indirectly as a mortgage broker, a mortgage lender, or a mortgage loan originator unless378
449	449		such person:379
450	450		(1) Is licensed or registered as such
451	451		under this article by the department utilizing the380
452	452		Nationwide Multistate Licensing System and Registry;381
453	453		(2) Is exempted from the licensing or registration requirements of this article pursuant382
454	454		to Code Section 7-1-1001;383
455	455		(3) In the case of an employee of a mortgage broker or mortgage lender, has qualified384
456	456		to be relieved of the necessity for a license under the employee exemption in385
457	457		paragraph (14) of subsection (a) of Code Section 7-1-1001; or386
458	458		(4) In the case of a mortgage loan originator, is supervised by a mortgage broker,387
459	459		mortgage lender, or exemptee on a daily basis while performing mortgage functions; is388
460	460		employed by and works exclusively for only one mortgage broker, mortgage lender, or389
461	461		exemptee; and is paid on a W-2 basis by the employing mortgage broker, mortgage390
462	462		lender, or exemptee, except those natural persons exempt from licensure as a mortgage391
463	463		broker or mortgage lender under paragraph (17) of subsection (a) of Code Section392
464	464		7-1-1001. Each licensed mortgage loan originator shall register with and maintain a valid393
465	465		unique identifier issued by the Nationwide Multistate Licensing System and Registry. 394
466	466		For the purposes of implementing an orderly and efficient mortgage loan originator395
467	467		process, the department may establish licensing rules or regulations and interim396
468	468		procedures for licensing and acceptance of applications."397
469	469		"(b) It shall be prohibited for any person, as defined in Code Section 7-1-1000, to398
470	470		purchase, sell, or transfer one or more mortgage loans or loan applications from or to a399
471	471		mortgage loan originator, mortgage broker, or mortgage lender who is neither licensed nor400
472	472		exempt from the licensing or registration provisions of this article. Such a purchase shall401
473	473		H. B. 876
474		-	- 16 - 24 LC 55 0142~~/AP~~
	474	+	- 16 - 24 LC 55 0142
475	475		not affect the obligation of the borrower under the terms of the mortgage loan. The
476	476		402
477	477		department shall provide for distribution or availability of information regarding approved403
478	478		or revoked licenses."404
479	479		SECTION 1-21.405
480	480		Said title is further amended in Code Section 7-1-1003.2, relating to financial requirements406
481	481		for licensing and registration and bond requirements, by revising subsections (a), (b), and (c)407
482	482		as follows:408
483	483		"(a) Each licensed or registered
484	484		mortgage broker shall provide the department with a bond. 409
485	485		The bond for a mortgage broker shall be in the principal sum of $150,000.00 or such410
486	486		greater sum as the department may require as set forth by regulation based on an amount411
487	487		that reflects the dollar amount of loans originated, and the bond shall meet the other412
488	488		requirements of subsection (d) of this Code section.413
489	489		(b) Except as otherwise provided in subsection (d) of this Code section, the department414
490	490		shall not license or register any mortgage lender unless the applicant or registrant provides415
491	491		the department with a bond. The bond for a mortgage lender shall be in the principal sum416
492	492		of $250,000.00 or such greater sum as the department may require as set forth by regulation417
493	493		based on an amount that reflects the dollar amount of loans originated, and which bond418
494	494		shall meet the other requirements of subsection (d) of this Code section.419
495	495		(c) Each mortgage loan originator shall be covered by the surety bond of his or her420
496	496		sponsoring licensed or registered mortgage broker or lender. In the event that the mortgage421
497	497		loan originator is an employee of a licensed or registered mortgage broker or lender or422
498	498		under an exclusive written independent contractor agreement as described in paragraph423
499	499		(17) of Code Section 7-1-1001, the surety bond of such licensed or registered mortgage424
500	500		broker or lender may be used in lieu of the mortgage loan originator's surety bond425
501	501		requirement."426
502	502		H. B. 876
503		-	- 17 - 24 LC 55 0142~~/AP~~
	503	+	- 17 - 24 LC 55 0142
504	504		SECTION 1-22.
505	505		427
506	506		Said title is further amended by revising Code Section 7-1-1003.3, relating to application for428
507	507		registration, as follows:429
508	508		"7-1-1003.3.430
509	509		An application to register as a mortgage lender or broker under this article shall be made
510	510		431
511	511		annually in writing, under oath, on a form provided by the department, subject to432
512	512		requirements specified by rules and regulations of the department. Reserved."433
513	513		SECTION 1-23.434
514	514		Said title is further amended in Code Section 7-1-1004, relating to investigation of applicant435
515	515		and its officers, audit, and education, experience, and other requirements relative to licensees436
516	516		and registrants, by revising subsections (b), (c), (i), (l), (m), (o), (p), (q), and (r) as follows:437
517	517		"(b) Upon receipt of an application for license or registration, the department shall conduct438
518	518		such investigation as it deems necessary to determine that the mortgage broker and439
519	519		mortgage lender applicant and the individuals who direct the affairs or establish policy for440
520	520		the mortgage broker and mortgage lender applicant, including the officers, directors, or the441
521	521		equivalent, are of good character and ethical reputation; that the mortgage broker and442
522	522		mortgage lender applicant is not disqualified for licensure as a result of adverse443
523	523		administrative civil or criminal findings in any jurisdiction; that the mortgage broker and444
524	524		mortgage lender applicant and such persons meet the requirements of subsection (i) of this445
525	525		Code section; that the mortgage broker and mortgage lender applicant and such persons446
526	526		demonstrate reasonable financial responsibility; that the mortgage broker and mortgage447
527	527		lender applicant has reasonable policies and procedures to receive and process customer448
528	528		grievances and inquiries promptly and fairly; and that the mortgage broker and mortgage449
529	529		lender applicant has and maintains a registered agent for service in this state.450
530	530		(c) The department shall not license or register any mortgage broker and mortgage lender451
531	531		applicant unless it is satisfied that the mortgage broker and mortgage lender applicant may452
532	532		H. B. 876
533		-	- 18 - 24 LC 55 0142~~/AP~~
	533	+	- 18 - 24 LC 55 0142
534	534		be expected to operate its mortgage lending or brokerage activities in compliance with the
535	535		453
536	536		laws of this state and in a manner which protects the contractual and property rights of the454
537	537		citizens of this state."455
538	538		"(i) The department shall not issue or may revoke a license or registration
539	539		if it finds that456
540	540		the mortgage loan originator, mortgage broker, or mortgage lender applicant or licensee,457
541	541		or any person who is a director, officer, partner, covered employee, or ultimate equitable458
542	542		owner of 10 percent or more of the mortgage broker or mortgage lender applicant,459
543	543		registrant, or licensee or any individual who directs the affairs or establishes policy for the460
544	544		mortgage broker or mortgage lender applicant, registrant, or licensee, has been convicted461
545	545		of a felony in any jurisdiction or of a crime which, if committed within this state, would462
546	546		constitute a felony under the laws of this state. Other than a mortgage loan originator, for463
547	547		the purposes of this article, a person shall be deemed to have been convicted of a crime if464
548	548		such person shall have pleaded guilty or nolo contendere to a charge thereof before a court465
549	549		or federal magistrate or shall have been found guilty thereof by the decision or judgment466
550	550		of a court or federal magistrate or by the verdict of a jury, irrespective of the467
551	551		pronouncement of sentence or the suspension thereof, and regardless of whether first468
552	552		offender treatment without adjudication of guilt pursuant to the charge was entered, or an469
553	553		adjudication or sentence was otherwise withheld or not entered on the charge, unless and470
554	554		until such plea of guilty, or such decision, judgment, or verdict, shall have been set aside,471
555	555		reversed, or otherwise abrogated by lawful judicial process or until probation, sentence, or472
556	556		both probation and sentence of a first offender have been successfully completed and473
557	557		documented, or unless the person convicted of the crime shall have received a pardon474
558	558		therefor from the President of the United States or the Governor governor or other475
559	559		pardoning authority in the jurisdiction where the conviction occurred. For purposes of this476
560	560		article, a mortgage loan originator shall be deemed to have been convicted of a crime if he477
561	561		or she has pleaded guilty to, been found guilty of, or entered a first offender or nolo478
562	562		H. B. 876
563		-	- 19 - 24 LC 55 0142~~/AP~~
	563	+	- 19 - 24 LC 55 0142
564	564		contendere plea to a felony in a domestic, foreign, or military court; provided, however,
565	565		479
566	566		that any pardon of a conviction shall not be a conviction."480
567	567		"(l) Every mortgage broker and mortgage lender licensee, registrant,
568	568		and applicant shall481
569	569		be authorized and required to obtain criminal background checks on covered employees. 482
570	570		Such criminal background checks shall be commercial background checks. Licensees,483
571	571		registrants, and applicants shall be responsible for any applicable fees charged by the484
572	572		company performing the commercial background check. A licensee, registrant, or485
573	573		applicant may only employ a covered employee whose criminal history has been checked486
574	574		in this manner and has been found to be in compliance with all lawful requirements prior487
575	575		to the initial date of hire. This provision shall not apply to directors, officers, partners,488
576	576		agents, or ultimate equitable owners of 10 percent or more or to persons who direct the489
577	577		company's affairs or establish policy, whose background shall have been investigated490
578	578		through the department before taking office, beginning employment, or securing491
579	579		ownership. The department shall be entitled to review any applicant's, registrant's, or492
580	580		licensee's files to determine whether the required commercial background checks have been493
581	581		conducted and whether all covered employees are qualified. Notwithstanding the494
582	582		requirement that licensees, registrants, and applicants conduct such commercial495
583	583		background checks on covered employees, the department shall retain the right to obtain496
584	584		conviction data on covered employees pursuant to subsection (j) of this Code section.497
585	585		(m) Upon receipt of fingerprints, fees, and other required information from the department,498
586	586		the Georgia Crime Information Center shall promptly transmit fingerprints to the Federal499
587	587		Bureau of Investigation for a search of bureau records and an appropriate report and shall500
588	588		promptly conduct a search of its own records and records to which it has access. The501
589	589		Georgia Crime Information Center shall notify the department in writing of any derogatory502
590	590		finding, including, but not limited to, any conviction data regarding the fingerprint records503
591	591		check, or if there is no such finding. All conviction data received by the department shall504
592	592		be used by the department for the exclusive purpose of carrying out the responsibilities of505
593	593		H. B. 876
594		-	- 20 - 24 LC 55 0142~~/AP~~
	594	+	- 20 - 24 LC 55 0142
595	595		this article, shall not be a public record, shall be privileged, and shall not be disclosed to
596	596		506
597	597		any other person or agency except to any person or agency which otherwise has a legal507
598	598		right to inspect the file. All such records shall be maintained by the department and the508
599	599		applicant or licensee or registrant
600	600		pursuant to laws regarding such records and the rules and509
601	601		regulations of the Federal Bureau of Investigation and the Georgia Crime Information510
602	602		Center, as applicable."511
603	603		"(o) The department may deny or revoke a license or registration or otherwise restrict a512
604	604		license or registration if it finds that the mortgage broker or mortgage lender applicant or513
605	605		any person who is a director, officer, partner, or ultimate equitable owner of 10 percent or514
606	606		more or person who directs the company's affairs or who establishes policy of the applicant515
607	607		has been in one or more of these roles as a mortgage lender, or broker, or registrant whose516
608	608		license or registration has been denied, revoked, or suspended within five years of the date517
609	609		of the application.518
610	610		(p) The department shall not issue a license or registration to and may revoke a license or519
611	611		registration from a mortgage broker or mortgage lender applicant, or licensee, or registrant520
612	612		if such person:521
613	613		(1) Has been the recipient of a final cease and desist order issued within the preceding522
614	614		five years if such order was based on a violation of subsection (i) of this Code section or523
615	615		Code Section 7-1-1002 or 7-1-1013;524
616	616		(2) Employs any other person against whom a final cease and desist order has been525
617	617		issued within the preceding five years if such order was based on a violation of526
618	618		subsection (i) of this Code section or Code Section 7-1-1002 or 7-1-1013; or527
619	619		(3) Has had his or her license revoked within five years of the date such person was hired528
620	620		or employs any other person who has had his or her license revoked within five years of529
621	621		the date such person was hired.530
622	622		(q) Each mortgage broker and mortgage lender applicant, or licensee, and registrant shall,531
623	623		before hiring an employee, examine the department's public records to determine that such532
624	624		H. B. 876
625		-	- 21 - 24 LC 55 0142~~/AP~~
	625	+	- 21 - 24 LC 55 0142
626	626		employee is not subject to the type of order described in subsection (p) of this Code
627	627		533
628	628		section.534
629	629		(r) Within 90 days after receipt of a completed application and payment of licensing fees535
630	630		prescribed by this article, the department shall either grant or deny the request for license536
631	631		or registration
632	632		."537
633	633		SECTION 1-24.538
634	634		Said title is further amended in Code Section 7-1-1005, relating to renewal of licenses and539
635	635		registrations and expiration, by revising subsections (a), (b), (c), and (d) as follows:540
636	636		"(a) Except as otherwise specifically provided in this article, all licenses and registrations541
637	637		issued pursuant to this article shall expire on December 31 of each year, and application542
638	638		for renewal shall be made annually on or before December 1 of each year.543
639	639		(b) Any licensee or registrant making proper application on or before December 1 for the544
640	640		renewal of a license or registration for the following calendar year shall be permitted to545
641	641		continue to operate pending final approval or disapproval of the application if the546
642	642		application for the license or registration is not acted upon prior to January 1. For purposes547
643	643		of this subsection, a 'proper application' shall include a requirement that all documentation548
644	644		requesting a renewal has been completed, the requisite continuing education has been549
645	645		successfully obtained, and payment has been made of all outstanding fines and applicable550
646	646		fees required by this article.551
647	647		(c) No investigation fee shall be payable in connection with the renewal application, but552
648	648		an annual license or registration fee established by regulation of the department to defray553
649	649		the cost of supervision shall be paid with each renewal application, which fee shall not be554
650	650		refunded.555
651	651		(d) Any person holding a license or registration pursuant to this article who fails to file a556
652	652		proper application for a license or registration renewal for the following license year on or557
653	653		before December 1 and who files an application after December 1 may be required to pay,558
654	654		H. B. 876
655		-	- 22 - 24 LC 55 0142~~/AP~~
	655	+	- 22 - 24 LC 55 0142
656	656		in addition to the license or registration fees, a fine in an amount to be established by559
657	657		regulations promulgated by the department."560
658	658		SECTION 1-25.561
659	659		Said title is further amended in Code Section 7-1-1007, relating to licensee to give notice of562
660	660		certain actions brought against it by a creditor or borrower and notice to the department of563
661	661		cancellation of bond, by revising subsection (d) as follows:564
662	662		"(d) A licensee or registrant shall, within ten days after knowledge of the event, report in565
663	663		writing to the department:566
664	664		(1) Any knowledge or discovery of an act prohibited by Code Section 7-1-1013;567
665	665		(2) The discharge of any employee for dishonest or fraudulent acts; and568
666	666		(3) Any administrative, civil, or criminal action initiated against the licensee, registrant,569
667	667		or any of its control persons by any government entity.570
668	668		Any person reporting such an event shall be protected from civil liability as provided in571
669	669		Code Section 7-1-1009."572
670	670		SECTION 1-26.573
671	671		Said title is further amended by revising Code Section 7-1-1008, relating to acquisition of574
672	672		10 percent or more of the voting shares or of the ownership of any other entity licensed or575
673	673		registered to conduct business under this article, as follows:576
674	674		"7-1-1008.577
675	675		(a) Except as provided in this Code section, no person shall acquire directly or indirectly578
676	676		10 percent or more of the voting shares of a corporation or 10 percent or more of the579
677	677		ownership of any other entity licensed or registered to conduct business as a mortgage580
678	678		broker or mortgage lender under this article unless it first:581
679	679		(1) Files an application with the department in such form as the department may582
680	680		prescribe from time to time;583
681	681		H. B. 876
682		-	- 23 - 24 LC 55 0142~~/AP~~
	682	+	- 23 - 24 LC 55 0142
683	683		(2) Delivers such other information to the department as the department may require
684	684		584
685	685		concerning the financial responsibility, background, experience, and activities of the585
686	686		applicant, its directors and officers, if a corporation, and its members, if applicable, and586
687	687		of any proposed new directors, officers, or members of the licensee or registrant
688	688		; and587
689	689		(3) Pays such application fee as the department may prescribe.588
690	690		(b) Upon the filing and investigation of an application, the department shall permit the589
691	691		applicant to acquire the interest in the mortgage broker or mortgage lender licensee or590
692	692		registrant if it finds that the applicant and its members, if applicable, its directors and591
693	693		officers, if a corporation, and any proposed new directors and officers have the financial592
694	694		responsibility, character, reputation, experience, and general fitness to warrant belief that593
695	695		the business will be operated efficiently and fairly, in the public interest, and in accordance594
696	696		with law. The department shall grant or deny the application within 60 days from the date595
697	697		a completed application accompanied by the required fee is filed unless the period is596
698	698		extended by order of the department reciting the reasons for the extension. If the597
699	699		application is denied, the department shall notify the applicant of the denial and the reasons598
700	700		for the denial.599
701	701		(c) The provisions of this Code section shall not apply to:600
702	702		(1) The acquisition of an interest in a licensee or registrant directly or indirectly,601
703	703		including an acquisition by merger or consolidation by or with a person licensed or602
704	704		registered by this article or a person exempt from this article under Code Section603
705	705		7-1-1001;604
706	706		(2) The acquisition of an interest in a mortgage broker or mortgage lender licensee or605
707	707		registrant directly or indirectly, including an acquisition by merger or consolidation by606
708	708		or with a person affiliated through common ownership with the licensee or registrant; or607
709	709		(3) The acquisition of an interest in a mortgage broker or mortgage lender licensee or608
710	710		registrant by a person by bequest, descent, or survivorship or by operation of law.609
711	711		H. B. 876
712		-	- 24 - 24 LC 55 0142~~/AP~~
	712	+	- 24 - 24 LC 55 0142
713	713		The person acquiring an interest in a mortgage broker or mortgage lender licensee or610
714	714		registrant in a transaction which is exempt from filing an application by this subsection611
715	715		shall send written notice to the department of such acquisition within 30 days of the closing612
716	716		of such transaction."613
717	717		SECTION 1-27.614
718	718		Said title is further amended in Code Section 7-1-1009, relating to maintenance of books,615
719	719		accounts, and records, investigation and examination of licensees and registrants by616
720	720		department, confidentiality, and exemptions from civil liability, by revising subsections (a)617
721	721		and (b), paragraph (5) of subsection (d), and subsection (g) as follows:618
722	722		"(a) Mortgage brokers and mortgage lenders required to be licensed or registered under this619
723	723		article shall maintain at their offices or such other location as the department shall permit620
724	724		such books, accounts, and records as the department may reasonably require in order to621
725	725		determine whether such mortgage brokers and mortgage lenders are complying with the622
726	726		provisions of this article and rules and regulations adopted in furtherance thereof. Such623
727	727		books, accounts, and records shall be maintained separately and distinctly from any other624
728	728		personal or unrelated business matters in which the mortgage brokers and mortgage lenders625
729	729		are involved.626
730	730		(b) The department shall investigate and examine the affairs, business, premises, and627
731	731		records of any mortgage broker or mortgage lender required to be licensed or registered628
732	732		under this article insofar as such affairs, business, premises, and records pertain to any629
733	733		business for which a license or registration is required by this article. The department may630
734	734		conduct such investigations and examinations as often as it deems necessary in order to631
735	735		carry out the purposes of this article, but shall conduct such investigations and632
736	736		examinations at least once every 60 months. In order to avoid unnecessary duplication of633
737	737		examinations, the department may accept examination reports performed and produced by634
738	738		other state or federal agencies, unless the department determines that the examinations are635
739	739		H. B. 876
740		-	- 25 - 24 LC 55 0142~~/AP~~
	740	+	- 25 - 24 LC 55 0142
741	741		not available or do not provide the information necessary to fulfill the responsibilities of
742	742		636
743	743		the department under this article. Notwithstanding the provisions of this subsection, the637
744	744		department may alter the frequency or scope of investigations and examinations through638
745	745		rules and regulations prescribed by the department. If the department determines, based639
746	746		on the records submitted to the department and past history of operations of the licensee640
747	747		in the state, that such investigations or examinations are unnecessary, then the department641
748	748		may waive such investigations and examinations. In the case of registrants, the department
749	749		642
750	750		shall not be required to conduct such examinations if it determines that the registrant has643
751	751		been adequately examined by another bank regulatory agency."644
752	752		"(5) Conduct an on-site examination without prior notice, with the licensee or registrant645
753	753		to pay the reasonably incurred costs for such examination, including out-of-state travel646
754	754		expenses, and the department shall be authorized to net such out-of-state expenses against647
755	755		the payments from the licensee or registrant."648
756	756		"(g) Examinations and investigations conducted under this article and information obtained649
757	757		by the department in the course of its duties under this article are confidential, except as650
758	758		provided in this subsection, pursuant to the provisions of Code Section 7-1-70. In addition651
759	759		to the exceptions set forth in subsection (b) of Code Section 7-1-70 and in paragraphs (3)652
760	760		and (4) of subsection (d) of this Code section, the department is authorized to share653
761	761		information obtained under this article with other state and federal regulatory agencies or654
762	762		law enforcement authorities. In the case of such sharing, the safeguards to confidentiality655
763	763		already in place within such agencies or authorities shall be deemed adequate. The656
764	764		commissioner or an examiner specifically designated may disclose such limited657
765	765		information as is necessary to conduct a civil or administrative investigation or proceeding. 658
766	766		Information contained in the records of the department which is not confidential and may659
767	767		be made available to the public either on the department's website, upon receipt by the660
768	768		department of a written request, or in the Nationwide Multistate Licensing System and661
769	769		Registry shall include:662
770	770		H. B. 876
771		-	- 26 - 24 LC 55 0142~~/AP~~
	771	+	- 26 - 24 LC 55 0142
772	772		(1) For mortgage brokers and mortgage lenders, the name, business address, and
773	773		663
774	774		telephone, facsimile
775	775		designated email address, and unique identifier of a licensee or664
776	776		registrant;665
777	777		(2) For mortgage brokers and mortgage lenders, the names and titles of the principal666
778	778		officers;667
779	779		(3) For mortgage brokers and mortgage lenders, the name of the owner or owners668
780	780		thereof;669
781	781		(4) For mortgage brokers and mortgage lenders, the business address of a licensee's or670
782	782		registrant's agent for service; and671
783	783		(5) The terms of or a copy of any bond filed by a licensee or registrant."672
784	784		SECTION 1-28.673
785	785		Said title is further amended by revising Code Section 7-1-1010, relating to annual financial674
786	786		statements, as follows:675
787	787		"7-1-1010.676
788	788		(a) If a mortgage broker is a United States Department of Housing and Urban677
789	789		Development loan correspondent, such broker shall also submit to the department the audit678
790	790		that is required for the United States Department of Housing and Urban Development. The679
791	791		department may require the mortgage broker to have made an audit of the books and affairs680
792	792		of the licensed or registered business and submit to the department an audited financial681
793	793		statement if the department finds that such an audit is necessary to determine whether the682
794	794		mortgage broker is complying with the provisions of this article and the rules and683
795	795		regulations adopted in furtherance of this article.684
796	796		(b) Each mortgage lender licensed or registered under this article shall at least once each685
797	797		year have made an audit of the books and affairs of the licensed or registered business and686
798	798		submit to the department at renewal an audited financial statement, except that a mortgage687
799	799		lender licensed or registered under this article which is a subsidiary shall comply with this688
800	800		H. B. 876
801		-	- 27 - 24 LC 55 0142~~/AP~~
	801	+	- 27 - 24 LC 55 0142
802	802		provision by annually providing a consolidated audited financial statement of its parent
803	803		689
804	804		company and a financial statement, which may be unaudited, of the licensee or registrant
805	805		690
806	806		which is prepared in accordance with generally accepted accounting principles. A lender691
807	807		who utilizes a bond in lieu of an audit need not supply such audit, unless specially required692
808	808		by the department. An audit shall be less than 15 months old to be acceptable. The693
809	809		department may by regulation establish additional minimum standards for audits and694
810	810		reports under this Code section."695
811	811		SECTION 1-29.696
812	812		Said title is further amended by revising Code Section 7-1-1011, relating to annual fees, as697
813	813		follows:698
814	814		"7-1-1011.699
815	815		(a) The department may, by regulation, prescribe annual fees to be paid by licensees and700
816	816		registrants, which fees shall be set at levels necessary to defray costs and expenses incurred701
817	817		by the state in providing the examinations and supervision required by this article and its702
818	818		federally mandated participation in the Nationwide Multistate Licensing System and703
819	819		Registry, and which fees may vary according to whether a person is a licensee or registrant704
820	820		or is a mortgage loan originator, mortgage broker, or a mortgage lender.705
821	821		(b)(1) As used in this subsection, the term 'collecting agent' means the person listed as706
822	822		the secured party on a security deed or other loan document that establishes a lien on the707
823	823		residential real property taken as collateral at the time of the closing of the mortgage loan708
824	824		transaction.709
825	825		(2) There shall be imposed on the closing of every mortgage loan subject to regulation710
826	826		under this article which, as defined in Code Section 7-1-1000, includes all mortgage711
827	827		loans, whether or not closed by a mortgage broker or mortgage lender licensee or712
828	828		registrant, a fee of $10.00. The fee shall be paid by the borrower to the collecting agent713
829	829		at the time of closing of the mortgage loan transaction. The collecting agent shall remit714
830	830		H. B. 876
831		-	- 28 - 24 LC 55 0142~~/AP~~
	831	+	- 28 - 24 LC 55 0142
832	832		the fee to the department at the time and in the manner specified by regulation of the
833	833		715
834	834		department. Revenue collected by the department pursuant to this subsection shall be716
835	835		deposited in the general fund of the state.717
836	836		(3) The fee imposed by this subsection shall be a debt from the borrower to the collecting718
837	837		agent until such assessment is paid and shall be recoverable at law in the same manner719
838	838		as authorized for the recovery of other debts. Any collecting agent who neglects, fails,720
839	839		or refuses to collect the fee imposed by this subsection shall be liable for the payment of721
840	840		the fee."722
841	841		SECTION 1-30.723
842	842		Said title is further amended by revising Code Section 7-1-1013, relating to prohibition of724
843	843		certain acts, as follows:725
844	844		"7-1-1013.726
845	845		It shall be prohibited for any person transacting a mortgage business in or from this state,727
846	846		including any person required to be licensed or registered
847	847		under this article and any person728
848	848		exempted from the licensing or registration requirements of this article under Code Section729
849	849		7-1-1001, to:730
850	850		(1) Misrepresent the material facts, make false statements or promises, or submit false731
851	851		statements or documents likely to influence, persuade, or induce an applicant for a732
852	852		mortgage loan, a mortgagee, or a mortgagor to take a mortgage loan, or, through agents733
853	853		or otherwise, pursue a course of misrepresentation by use of fraudulent or unauthorized734
854	854		documents or other means to the department or anyone;735
855	855		(2) Misrepresent or conceal or cause another to misrepresent or conceal material factors,736
856	856		terms, or conditions of a transaction to which a mortgage lender or broker is a party,737
857	857		pertinent to an applicant or application for a mortgage loan or a mortgagor;738
858	858		(3) Fail to disburse funds in accordance with a written commitment or agreement to739
859	859		make a mortgage loan;740
860	860		H. B. 876
861		-	- 29 - 24 LC 55 0142~~/AP~~
	861	+	- 29 - 24 LC 55 0142
862	862		(4) Improperly refuse to issue a satisfaction of a mortgage loan;
863	863		741
864	864		(5) Fail to account for or deliver to any person any personal property obtained in742
865	865		connection with a mortgage loan such as money, funds, deposit, check, draft, mortgage,743
866	866		or other document or thing of value which has come into the possession of a licensee or
867	867		744
868	868		registrant and which is not the property of the licensee or registrant, or which the745
869	869		mortgage lender or broker is not in law or at equity entitled to retain;746
870	870		(6) Engage in any transaction, practice, or course of business which is not in good faith747
871	871		or fair dealing, or which operates a fraud upon any person, in connection with the748
872	872		attempted or actual making of, purchase of, transfer of, or sale of any mortgage loan;749
873	873		(7) Engage in any fraudulent home mortgage underwriting practices;750
874	874		(8) Induce, require, or otherwise permit the applicant for a mortgage loan or mortgagor751
875	875		to sign a security deed, note, loan application, or other pertinent financial disclosure752
876	876		documents with any blank spaces to be filled in after it has been signed, except blank753
877	877		spaces relating to recording or other incidental information not available at the time of754
878	878		signing;755
879	879		(9) Make, directly or indirectly, any residential mortgage loan with the intent to foreclose756
880	880		on the borrower's property. For purposes of this paragraph, there shall be a presumption757
881	881		that a person has made a residential mortgage loan with the intent to foreclose on the758
882	882		borrower's property if the following circumstances can be demonstrated:759
883	883		(A) Lack of substantial benefit to the borrower;760
884	884		(B) Lack of probability of full payment of the loan by the borrower; and761
885	885		(C) A significant proportion of similarly foreclosed loans by such person;762
886	886		(10) Provide an extension of credit or collect a mortgage debt by extortionate means; or763
887	887		(11) Purposely withhold, delete, destroy, or alter information requested by an examiner764
888	888		of the department or make false statements or material misrepresentations to the765
889	889		department or the Nationwide Multistate Licensing System and Registry or in connection766
890	890		with any investigation conducted by the department or another governmental agency."767
891	891		H. B. 876
892		-	- 30 - 24 LC 55 0142~~/AP~~
	892	+	- 30 - 24 LC 55 0142
893	893		SECTION 1-31.
894	894		768
895	895		Said title is further amended by revising Code Section 7-1-1014, relating to regulations769
896	896		governing disclosure required to applicants for mortgage loans, as follows:770
897	897		"7-1-1014.771
898	898		In addition to such other rules, regulations, and policies as the department may promulgate772
899	899		to effectuate the purposes of this article, the department shall promulgate regulations773
900	900		governing the disclosure required to be made to applicants for mortgage loans, including,774
901	901		without limitation, the following requirements:775
902	902		(1) Any person required to be licensed or registered
903	903		under this article shall provide to776
904	904		each applicant for a mortgage loan prior to accepting an application fee or any third-party777
905	905		fee such as a property appraisal fee, credit report fee, or any other similar fee a disclosure778
906	906		of the fees payable and the conditions under which such fees may be refundable;779
907	907		(2) Any mortgage lender required to be licensed or registered under this article shall780
908	908		make available to each applicant for a mortgage loan at or before the time a commitment781
909	909		to make a mortgage loan is given a written disclosure of the fees to be paid in connection782
910	910		with the commitment and the loan, or the manner in which such fees shall be determined783
911	911		and the conditions under which such fees may be refundable; and784
912	912		(3) Any mortgage lender required to be licensed or registered under this article shall785
913	913		disclose to each borrower of a mortgage loan that failure to meet every condition of the786
914	914		mortgage loan may result in the loss of the borrower's property through foreclosure. The787
915	915		borrower shall be required to sign the disclosure at or before the time of the closing of the788
916	916		mortgage loan.789
917	917		The department may prescribe standards regarding the accuracy of required disclosures and790
918	918		may provide for applicable administrative or civil penalties or fines for failure to provide791
919	919		the disclosures or to meet the prescribed standards."792
920	920		H. B. 876
921		-	- 31 - 24 LC 55 0142~~/AP~~
	921	+	- 31 - 24 LC 55 0142
922	922		SECTION 1-32.
923	923		793
924	924		Said title is further amended by revising Code Section 7-1-1015, relating to rules relative to794
925	925		escrow accounts, as follows:795
926	926		"7-1-1015.796
927	927		The department may promulgate rules with respect to the placement in escrow accounts by797
928	928		any person required to be licensed or registered
929	929		by this article of any money, fund, deposit,798
930	930		check, or draft entrusted to it by any persons dealing with it as a residential mortgage loan799
931	931		originator, mortgage broker, mortgage lender, or servicer."800
932	932		SECTION 1-33.801
933	933		Said title is further amended in Code Section 7-1-1016, relating to regulations relative to802
934	934		advertising, by revising paragraph (2) as follows:803
935	935		"(2) All advertisements, including websites, disseminated by a licensee or a registrant in804
936	936		this state by any means shall contain the name, which shall conform to a name on record805
937	937		with the department, and unique identifier, which shall clearly indicate that the number806
938	938		was issued by the Nationwide Multistate Licensing System and Registry, of the licensee807
939	939		or registrant."808
940	940		SECTION 1-34.809
941	941		Said title is further amended in Code Section 7-1-1017, relating to suspension or revocation810
942	942		of licenses, registrations, or mortgage broker education approval, notice, judicial review, and811
943	943		effect on preexisting contract, by revising paragraph (1) of subsection (a) and subsections (b),812
944	944		(c), (d), (e), and (f) as follows:813
945	945		"(a)(1) The department may suspend or revoke an original or renewal license,814
946	946		registration, or mortgage broker education approval on any ground on which it might815
947	947		refuse to issue an original license, registration, or approval or for a violation of any816
948	948		provision of this article or of Chapter 6A of this title or any rule or regulation issued817
949	949		H. B. 876
950		-	- 32 - 24 LC 55 0142~~/AP~~
	950	+	- 32 - 24 LC 55 0142
951	951		under this article or under Chapter 6A of this title, including failure to provide fees on a
952	952		818
953	953		timely basis, or for failure of the licensee or registrant
954	954		to pay, within 30 days after it819
955	955		becomes final, a judgment recovered in any court within this state by a claimant or820
956	956		creditor in an action arising out of the licensee's or registrant's business in this state as a821
957	957		mortgage loan originator, mortgage lender, or mortgage broker or for violation of a final822
958	958		order previously issued by the department."823
959	959		"(b) Notice of the department's intention to enter an order denying an application for a824
960	960		license or registration under this article or of an order suspending or revoking a license or825
961	961		registration under this article shall be given to the applicant, or licensee, or registrant in826
962	962		writing, sent by email to the email address of record for the applicant, or licensee, or827
963	963		registrant, or registered or certified mail or statutory overnight delivery addressed to the828
964	964		principal place of business of such applicant, or licensee, or registrant. Within 20 days of829
965	965		the date of the notice of intention to enter an order of denial, suspension, or revocation830
966	966		under this article, the applicant, or licensee, or registrant may request in writing a hearing831
967	967		to contest the order. If a hearing is not requested in writing within 20 days of the date of832
968	968		such notice of intention, the department shall enter a final order regarding the denial,833
969	969		suspension, or revocation. If a person refuses to accept service of the notice or order by834
970	970		registered or certified mail or statutory overnight delivery and the notice sent by email to835
971	971		the email address of record has not been delivered to the person, the notice or order shall836
972	972		be served by the commissioner or the commissioner's authorized representative under any837
973	973		other method of lawful service; and the person shall be personally liable to the838
974	974		commissioner for a sum equal to the actual costs incurred to serve the notice or order. This839
975	975		liability shall be paid upon notice and demand by the commissioner or the commissioner's840
976	976		representative and shall be assessed and collected in the same manner as other fees or fines841
977	977		administered by the commissioner. Any final order of the department denying, suspending,842
978	978		or revoking a license or registration shall state the grounds upon which it is based and shall843
979	979		be effective on the date of issuance. The department shall promptly send a copy of such844
980	980		H. B. 876
981		-	- 33 - 24 LC 55 0142~~/AP~~
	981	+	- 33 - 24 LC 55 0142
982	982		order by mail addressed to the principal place of business of such applicant, or licensee, or845
983	983		registrant and post a copy of such order on the Nationwide Multistate Licensing System846
984	984		and Registry. For purposes of this subsection, the term 'email address of record' means the847
985	985		email address that the applicant, or licensee, or registrant has designated as their email848
986	986		address for regulatory contact on file with the Nationwide Multistate Licensing System and849
987	987		Registry.850
988	988		(c) A licensee or registrant may, at the discretion of and with the consent of the851
989	989		department, agree to a voluntary suspension of its license or registration for a period of852
990	990		time to be agreed upon by the parties. Such order of suspension shall be considered a final853
991	991		order and shall be forwarded to the licensee or registrant in the same manner as any other854
992	992		final order. Grounds for such a voluntary suspension shall be the same as provided in855
993	993		subsection (a) of this Code section, and the licensee or registrant may waive its right to an856
994	994		administrative hearing before issuance of the suspension. With the consent of the857
995	995		department, a licensee or registrant may voluntarily surrender its license or registration. 858
996	996		A voluntary surrender of a license or registration shall have the same effect as a revocation859
997	997		of said license or registration. A voluntary surrender of a license shall be regarded as a860
998	998		final order of the department.861
999	999		(d) A decision of the department denying a license or registration application, original or862
1000	1000		renewal, shall be conclusive, except that it may be subject to judicial review under Code863
1001	1001		Section 7-1-90. A decision of the department suspending or revoking a license or864
1002	1002		registration shall be subject to judicial review in the same manner as a decision of the865
1003	1003		department to take possession of the assets and business of a bank under Code Section866
1004	1004		7-1-155.867
1005	1005		(e) Except as otherwise provided by law, a revocation, suspension, or surrender of a868
1006	1006		license or registration shall not impair or affect the obligation of a preexisting contract869
1007	1007		between the licensee and another person.870
1008	1008		H. B. 876
1009		-	- 34 - 24 LC 55 0142~~/AP~~
	1009	+	- 34 - 24 LC 55 0142
1010	1010		(f) Nothing in this article shall preclude a mortgage broker or mortgage lender whose
1011	1011		871
1012	1012		license or registration
1013	1013		has been suspended or revoked from continuing to service mortgage872
1014	1014		loans pursuant to servicing contracts in existence at the time of the suspension or873
1015	1015		revocation for a period not to exceed six months after the date of the final order of the874
1016	1016		department suspending or revoking the license or registration."875
1017	1017		SECTION 1-35.876
1018	1018		Said title is further amended in Code Section 7-1-1018, relating to cease and desist orders,877
1019	1019		enforcement procedure, civil penalties, and fines, by revising subsection (a) as follows:878
1020	1020		"(a) Whenever it shall appear to the department that any person required to be licensed or879
1021	1021		registered under this article or employed by a licensee or who would be covered by the880
1022	1022		prohibitions in Code Section 7-1-1013 has violated any law of this state or any order or881
1023	1023		regulation of the department, the department may issue an initial written order requiring882
1024	1024		such person to cease and desist immediately from such unauthorized practices. Such cease883
1025	1025		and desist order shall be final 20 days after it is issued unless the person to whom it is884
1026	1026		issued makes a written request within such 20 day period for a hearing. The hearing shall885
1027	1027		be conducted in accordance with Chapter 13 of Title 50, the 'Georgia Administrative886
1028	1028		Procedure Act.' A cease and desist order to an unlicensed person that orders such person887
1029	1029		to cease doing a mortgage business without the appropriate license shall be final 30 days888
1030	1030		from the date of issuance, and there shall be no opportunity for an administrative hearing. 889
1031	1031		If the proper license or evidence of exemption or valid employment status during the time890
1032	1032		of the alleged offense is delivered to the department within the 30 day period, the order891
1033	1033		shall be rescinded by the department. If a cease and desist order is issued to a person who892
1034	1034		has been sent a notice of bond cancellation and if the bond is reinstated or replaced and893
1035	1035		such documentation is delivered to the department within the 20 day period following the894
1036	1036		date of issuance of the order, the order shall be rescinded. If the notice of reinstatement of895
1037	1037		the bond is not received within the 20 days, the license shall expire at the end of the 20 day896
1038	1038		H. B. 876
1039		-	- 35 - 24 LC 55 0142~~/AP~~
	1039	+	- 35 - 24 LC 55 0142
1040	1040		period, and the person shall be required to make a new application for license and pay the
1041	1041		897
1042	1042		applicable fees. In the case of an unlawful purchase of mortgage loans, such initial cease898
1043	1043		and desist order to a purchaser shall constitute the knowledge required under subsection (b)899
1044	1044		of Code Section 7-1-1002 for any subsequent violations. Any cease and desist order sent900
1045	1045		to the person at both his or her personal and business addresses pursuant to this Code901
1046	1046		section that is returned to the department as 'refused' or 'unclaimed' shall be deemed as902
1047	1047		received and sufficiently served."903
1048	1048		SECTION 1-36.904
1049	1049		Said title is further amended in Code Section 7-1-1114, relating to certificate of authority,905
1050	1050		notification of revocation of certificate of authority, and foreign corporation requirements,906
1051	1051		by revising subsection (c) as follows:907
1052	1052		"(c) Notwithstanding the definition of the term 'foreign corporation' in paragraph (13) of908
1053	1053		Code Section 14-2-140, all of the provisions of Article 15 of Chapter 2 of Title 14, relating909
1054	1054		to foreign corporations, shall apply to all foreign banks establishing and maintaining a910
1055	1055		Georgia state branch or Georgia state agency in this state. Such foreign banks shall file an
1056	1056		911
1057	1057		annual registration with the Secretary of State as set forth in Code Section 14-2-1622."912
1058	1058		SECTION 1-37.913
1059	1059		Said title is further amended by revising Code Section 7-3-17, which is reserved, as follows:914
1060	1060		"7-3-17.915
1061	1061		Notwithstanding the provisions of subsection (b) of Code Section 13-1-14, when any916
1062	1062		installment loan upon which a closing fee has been charged by a licensee is prepaid by any917
1063	1063		means within 90 days of the date of the loan, the borrower shall be entitled to a refund or918
1064	1064		credit of the closing fee, calculated as follows: the installment lender shall determine, on919
1065	1065		a daily pro rata basis over the original term of the loan, the amount of the closing fee that920
1066	1066		has accumulated prior to the prepayment. The installment lender shall refund or credit the921
1067	1067		H. B. 876
1068		-	- 36 - 24 LC 55 0142~~/AP~~
	1068	+	- 36 - 24 LC 55 0142
1069	1069		borrower with the pro rata amount that has not accumulated prior to the prepayment;922
1070	1070		provided, however, that the installment lender may retain from the collected closing fee the923
1071	1071		greater of the accumulated pro rata closing fee or $25.00. Reserved."924
1072	1072		SECTION 1-38.925
1073	1073		Said title is further amended by revising Code Section 7-9-2, relating to definitions relative926
1074	1074		to merchant acquirer limited purpose banks, as follows:927
1075	1075		"7-9-2.928
1076	1076		As used in this chapter, the term:929
1077	1077		(1) 'Articles of incorporation' or 'articles' means the articles or certificate of incorporation930
1078	1078		of a corporation and shall include, when used in reference to a limited liability company,931
1079	1079		the articles or certificate of organization of a limited liability company.932
1080	1080		(2) 'Bylaws' means the bylaws of a corporation and shall include, when used in reference933
1081	1081		to a limited liability company, the operating agreement, regulations, or similar documents934
1082	1082		regarding the governance and management of a limited liability company.935
1083	1083		(3) 'Commissioner' means the commissioner of banking and finance.936
1084	1084		(1.1)(4) 'Control person' means any individual who directs the affairs or controls or937
1085	1085		establishes policy for a merchant acquirer limited purpose bank.938
1086	1086		(2)(5) 'Corporation' means a corporation organized under the laws of this state, the939
1087	1087		United States, or any other state, territory, or dependency of the United States or under940
1088	1088		the laws of a foreign country. Such term shall include a similarly organized limited941
1089	1089		liability company.942
1090	1090		(3)(6) 'Department' means the Department of Banking and Finance.943
1091	1091		(7) 'Director' means a director of a corporation and shall include, when used in reference944
1092	1092		to a limited liability company, a manager or managing member of a limited liability945
1093	1093		company, as applicable.946
1094	1094		H. B. 876
1095		-	- 37 - 24 LC 55 0142~~/AP~~
	1095	+	- 37 - 24 LC 55 0142
1096	1096		(4)(8) 'Eligible organization' means a corporation that at all times maintains an office in947
1097	1097		the State of Georgia at which it or its parent, affiliates, or subsidiaries employ at least 250948
1098	1098		persons residing in this state who are directly or indirectly engaged in merchant acquiring949
1099	1099		activities or settlement activities, including providing the following services related to950
1100	1100		merchant acquiring activities or settlement activities, either for the eligible organization951
1101	1101		or on behalf of others:952
1102	1102		(A) Administrative support;953
1103	1103		(B) Information technology support;954
1104	1104		(C) Financial support; and955
1105	1105		(D) Tax and finance support.956
1106	1106		(5)(9) 'Holding company' means any company that controls a merchant acquirer limited957
1107	1107		purpose bank. For purposes of this paragraph, the terms 'company' and 'control' shall958
1108	1108		have the meanings set forth in Code Section 7-1-605.959
1109	1109		(10) 'Incorporator' means the incorporator or organizer of a corporation and shall include,960
1110	1110		when used in reference to a limited liability company, an organizer of a limited liability961
1111	1111		company.962
1112	1112		(6)(11) 'Merchant' means an individual or entity authorized by a payment card network963
1113	1113		to accept payments in exchange for goods or services.964
1114	1114		(7)(12) 'Merchant acquirer limited purpose bank' means a corporation organized under965
1115	1115		this chapter and the activities of which are limited to those permitted under Code Section966
1116	1116		7-9-12.967
1117	1117		(8)(13) 'Merchant acquiring activities' means the various activities associated with968
1118	1118		effecting transactions within payment card networks, including obtaining and maintaining969
1119	1119		membership in one or more payment card networks; signing up and underwriting970
1120	1120		merchants to accept payment card network branded payment cards; providing the means971
1121	1121		to authorize valid card transactions at client merchant locations; facilitating the clearing972
1122	1122		and settlement of the transactions through a payment card network; providing access to973
1123	1123		H. B. 876
1124		-	- 38 - 24 LC 55 0142~~/AP~~
	1124	+	- 38 - 24 LC 55 0142
1125	1125		one or more payment card networks to merchant acquirer limited purpose bank affiliates,
1126	1126		974
1127	1127		customers, or customers of its affiliates; sponsoring the participation of merchant acquirer975
1128	1128		limited purpose bank affiliates, customers, or customers of its affiliates in one or more976
1129	1129		payment card networks; and conducting such other activities as may be necessary,977
1130	1130		convenient, or incidental to effecting transactions within payment card networks.978
1131	1131		(8.1)
1132	1132		(14) 'Merchant funds' means funds received by a merchant acquirer limited purpose979
1133	1133		bank as a result of its performance of clearing, settlement, or any other authorized980
1134	1134		activities which are ultimately payable to a merchant.981
1135	1135		(9)(15) 'Payment card network' means any organization, group, system, or other982
1136	1136		collection of individuals or entities that is organized to allow participants to accept or983
1137	1137		make payments for goods or services using a credit card, debit card, or any other payment984
1138	1138		device.985
1139	1139		(10)(16) 'Self-acquiring activities' means the act of a merchant, for itself or through an986
1140	1140		affiliated entity, engaging in merchant acquiring or settlement activities on its own behalf987
1141	1141		for payments it, or its affiliated entity, receives for goods and services it, or its affiliated988
1142	1142		entity, provides to consumers.989
1143	1143		(11)(17) 'Settlement activities' means the processing of payment card transactions to send990
1144	1144		to a payment card network for processing, to make payments to a merchant, and,991
1145	1145		ultimately, for cardholder billing.992
1146	1146		(18) 'Shareholder' means a person in whose name shares are registered in the records of993
1147	1147		a corporation and shall include, when used in reference to a limited liability company, a994
1148	1148		member of a limited liability company.995
1149	1149		(19) 'Shares' means any class of shares of capital stock of a corporation and shall include,996
1150	1150		when used in reference to a limited liability company, the membership interests of a997
1151	1151		limited liability company."998
1152	1152		H. B. 876
1153		-	- 39 - 24 LC 55 0142~~/AP~~
	1153	+	- 39 - 24 LC 55 0142
1154	1154		SECTION 1-39.
1155	1155		999
1156	1156		Said title is further amended in Code Section 7-9-4, relating to application, fees, and1000
1157	1157		minimum number of employees, by revising subsection (c) as follows:1001
1158	1158		"(c) The merchant acquirer limited purpose bank shall have, within one year after the date1002
1159	1159		it receives its charter
1160	1160		begins operations, no fewer than 50 employees located in this state1003
1161	1161		devoted to merchant acquiring activities; provided, however, that a merchant acquirer1004
1162	1162		limited purpose bank may contract with an eligible organization for the performance of1005
1163	1163		merchant acquiring activities, settlement activities, or any of the other services identified1006
1164	1164		in paragraph (4)(8) of Code Section 7-9-2, and when a merchant acquirer limited purpose1007
1165	1165		bank enters into such contracts with an eligible organization for merchant acquiring1008
1166	1166		activities, settlement activities, or any other services identified in paragraph (4)(8) of Code1009
1167	1167		Section 7-9-2, the minimum number of employees in this state shall be determined by the1010
1168	1168		commissioner at a level to assure the continued and substantive presence of the merchant1011
1169	1169		acquirer limited purpose bank in this state for the purpose of conducting its corporate1012
1170	1170		affairs and operations. If a merchant acquirer limited purpose bank contracts with an1013
1171	1171		eligible organization that is an affiliate of the merchant acquirer limited purpose bank, the1014
1172	1172		commissioner shall consider the eligible organization's or its parent's, affiliates', or1015
1173	1173		subsidiaries' employees engaged on behalf of the merchant acquirer limited purpose bank1016
1174	1174		as employees of the merchant acquirer limited purpose bank for purposes of complying1017
1175	1175		with this subsection."1018
1176	1176		SECTION 1-40.1019
1177	1177		Said title is further amended in Code Section 7-9-5, relating to articles of incorporation,1020
1178	1178		filing, publication, registered agent, and administration by board of directors, by revising1021
1179	1179		paragraph (5) of subsection (a), subsection (c), and subsection (e) as follows:1022
1180	1180		H. B. 876
1181		-	- 40 - 24 LC 55 0142~~/AP~~
	1181	+	- 40 - 24 LC 55 0142
1182	1182		"(5) A statement that 'This corporation is subject to the "Georgia Merchant Acquirer
1183	1183		1023
1184	1184		Limited Purpose Bank Act"' or 'This limited liability company is subject to the "Georgia
1185	1185		1024
1186	1186		Merchant Acquirer Limited Purpose Bank Act,"' as applicable;"1025
1187	1187		"(c) The applicant shall file with the department the articles of incorporation, together with1026
1188	1188		any fee required by the department. Such filing shall constitute an application for a charter1027
1189	1189		and approval to operate as a merchant acquirer limited purpose bank. Immediately upon1028
1190	1190		the filing of the articles of incorporation, the department shall certify a copy of the articles1029
1191	1191		and return it to the applicant, who shall, in conformity with Code Section 7-1-7 and on the1030
1192	1192		next business day following the filing of the articles, transmit for publication in the1031
1193	1193		newspaper which is the official organ of the county where the merchant acquirer limited1032
1194	1194		purpose bank will be located a copy of the articles or, in lieu thereof, a statement that reads1033
1195	1195		substantially as follows:1034
1196	1196		'An application for a charter to operate as a merchant acquirer limited purpose bank to be1035
1197	1197		known as the _______ and to be located at ______________ in _____________ County,1036
1198	1198		Georgia, will be made to the Secretary of State of Georgia in accordance with Chapter1037
1199	1199		9 of Title 7 of the Official Code of Georgia Annotated, the "Georgia Merchant Acquirer1038
1200	1200		Limited Purpose Bank Act." A copy of the articles of incorporation charter documents1039
1201	1201		of the proposed merchant acquirer limited purpose bank and the application have been1040
1202	1202		filed with the Department of Banking and Finance.'1041
1203	1203		The articles of incorporation or the statement must shall be published once a week for two1042
1204	1204		consecutive weeks with the first publication occurring within ten days of receipt by the1043
1205	1205		newspaper of the articles of incorporation or statement."1044
1206	1206		"(e) The administration of business and affairs of a merchant acquirer limited purpose bank1045
1207	1207		shall be the responsibility of a board of directors consisting of at least three directors, a1046
1208	1208		majority of whom shall be residents of this state. Upon request by a merchant acquirer1047
1209	1209		limited purpose bank, the department may waive or reduce the requirement that a majority1048
1210	1210		of the directors be residents of this state."1049
1211	1211		H. B. 876
1212		-	- 41 - 24 LC 55 0142~~/AP~~
	1212	+	- 41 - 24 LC 55 0142
1213	1213		SECTION 1-41.
1214	1214		1050
1215	1215		Said title is further amended by revising Code Section 7-9-8, relating to issuance of1051
1216	1216		certificate of incorporation by the Secretary of State, as follows:1052
1217	1217		"7-9-8.1053
1218	1218		The Secretary of State shall immediately issue a certificate of incorporation or certificate
1219	1219		1054
1220	1220		of organization to a proposed merchant acquirer limited purpose bank upon submission of:1055
1221	1221		(1) Written approval of the articles of incorporation by the department with a copy1056
1222	1222		attached;1057
1223	1223		(2) An affidavit executed by the duly authorized agent or publisher of a newspaper1058
1224	1224		swearing that the articles of incorporation or a summary statement publication as1059
1225	1225		provided for in Code Section 7-9-5 have been published; and1060
1226	1226		(3) All required fees and charges required by law1061
1227	1227		so long as name of the proposed merchant acquirer limited purpose bank continues to be1062
1228	1228		reserved or is available. The Secretary of State shall retain on file a copy of the certificate,1063
1229	1229		the articles of incorporation, the department's approval of the articles of incorporation, and1064
1230	1230		the publisher's certificate."1065
1231	1231		SECTION 1-42.1066
1232	1232		Said title is further amended by revising Code Section 7-9-11.8, relating to rights and1067
1233	1233		remedies of shareholders, as follows:1068
1234	1234		"7-9-11.8.1069
1235	1235		(a) A shareholder of a merchant acquirer limited purpose bank which is a party to a plan1070
1236	1236		of proposed merger or consolidation under this chapter who objects to such plan shall be1071
1237	1237		entitled to the rights and remedies of a dissenting shareholder as determined under Chapter1072
1238	1238		2 of Title 14, known as the 'Georgia Business Corporation Code' or under Article 10 of1073
1239	1239		Chapter 11 of Title 14, as applicable.1074
1240	1240		H. B. 876
1241		-	- 42 - 24 LC 55 0142~~/AP~~
	1241	+	- 42 - 24 LC 55 0142
1242	1242		(b) A resulting merchant acquirer limited purpose bank into which other or others have
1243	1243		1075
1244	1244		been merged or consolidated may require the return of original certificates of stock
1245	1245		1076
1246	1246		representing shares held by each shareholder in each or either of the merged or1077
1247	1247		consolidated institutions, or in lieu thereof may:1078
1248	1248		(1) Issue to each shareholder new certificates for such number of shares of the resulting1079
1249	1249		acquirer limited purpose bank; or1080
1250	1250		(2) Cause to be paid or delivered to each shareholder the amount of cash or securities of1081
1251	1251		any other corporation or combination of cash and such securities as, under the plan of1082
1252	1252		merger or consolidation, such shareholder is entitled to receive."1083
1253	1253		PART II1084
1254	1254		SECTION 2-1.1085
1255	1255		Said title is further amended in Code Section 7-6A-2, relating to definitions relative to the1086
1256	1256		Georgia Fair Lending Act, by revising paragraph (4) as follows:1087
1257	1257		"(4) 'Bona fide discount points' means loan discount points knowingly paid by the1088
1258	1258		borrower for the express purpose of reducing, and which in fact do result in a bona fide1089
1259	1259		reduction of, the interest rate applicable to the home loan; provided, however, that the1090
1260	1260		undiscounted interest rate for the home loan does not exceed by more than one percentage1091
1261	1261		point the required net yield for a 90 day standard mandatory delivery commitment for a1092
1262	1262		home loan with a reasonably comparable term from either the Federal National Mortgage1093
1263	1263		Association or the Federal Home Loan Mortgage Corporation, whichever is greater1094
1264	1264		average prime offer rate as defined in 12 C.F.R. 1026.35 that applies to a comparable1095
1265	1265		transaction, as published by the United States Consumer Financial Protection Bureau as1096
1266	1266		of the last date the discounted interest rate for the transaction is set before1097
1267	1267		consummation."1098
1268	1268		H. B. 876
1269		-	- 43 - 24 LC 55 0142~~/AP~~
	1269	+	- 43 - 24 LC 55 0142
1270	1270		PART III
1271	1271		1099
1272	1272		SECTION 3-1.1100
1273	1273		Title 10 of the Official Code of Georgia Annotated, relating to commerce and trade, is1101
1274	1274		amended in Code Section 10-1-439.1, relating to definitions relative to firearms industry1102
1275	1275		nondiscrimination, by revising paragraph (1) as follows:1103
1276	1276		"(1) 'Financial services' means any service or product offered to the consumer or business1104
1277	1277		market by a bank, trust company, building and loan association, credit union as defined1105
1278	1278		by Code Section 7-1-4, any merchant acquirer limited purpose bank as defined in1106
1279	1279		paragraph (7)
1280	1280		(12) of Code Section 7-9-2, or a federally chartered banking institution that1107
1281	1281		accepts state deposits."1108
1282	1282		SECTION 3-2.1109
1283	1283		Title 53 of the Official Code of Georgia Annotated, relating to wills, trusts, and1110
1284	1284		administration of estates, is amended in Code Section 53-12-2, relating to definitions relative1111
1285	1285		to trusts, by revising subparagraph (B) of paragraph (4) as follows:1112
1286	1286		"(B) Any other corporation or limited liability company organized or existing under the1113
1287	1287		laws of any state of the United States, other than Georgia, and chartered or licensed1114
1288	1288		under the laws of such state; and"1115
1289	1289		PART IV1116
1290	1290		SECTION 4-1.1117
1291	1291		(a) Except as provided for in subsection (b), this Act shall become effective on July 1, 2024.1118
1292	1292		(b) This part and Part II of this Act shall become effective on June 1, 2024.1119
1293	1293		H. B. 876
1294		-	- 44 - 24 LC 55 0142~~/AP~~
	1294	+	- 44 - 24 LC 55 0142
1295	1295		SECTION 4-2.
1296	1296		1120
1297	1297		All laws and parts of laws in conflict with this Act are repealed.1121
1298	1298		H. B. 876
1299	1299		- 45 -