Ga. Comp. R. & Regs. Dept. 80 | Ga. Comp. R. & Regs. Department 80 — Rules of Department of Banking and Finance

Chapter 80-1 Banks

Subject 80-1-1 Applications, Registrations and Notifications

Ga. Comp. R. & Regs. r. 80-1-1-.01 Applications, Registrations and Notifications, Generally {#sec-ga.-comp.-r.-regs.-r.-80-1-1-.01 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-1-.01}

(1) Proposed activities in Georgia by financial institutions, may require a form application, a letter application, a form registration, or merely a letter notification to the Department. Certain qualifying institutions may be eligible to shorten the form of application, and may benefit from an expedited processing time including shortened or consolidated notice periods. Such criteria for banks are provided at Rule 80-1-1-.10 and Rule 80-6-1-.04 , criteria for bank holding companies may be found at Rules 80-6-1-.03 and 80-6-1-.04 , and criteria for credit unions may be found at Rule 80-2-13-.06. Requirements for all banking institutions to conduct certain other activities have been streamlined to coordinate with federal requirements.

(2) Where forms are required, they may be obtained from the Department.

(3) Other Applications. Within these Rules: Chapter 80-2 covers credit union activities; Chapter 80-3 covers money transmitters, Chapter 80-4 covers check cashers; Chapter 80-6 covers holding companies; Chapter 80-7 covers foreign bank organizations; Chapter 80-11 covers mortgage lenders, brokers, and loan originators; Chapter 80-13 covers trust companies; and Chapter 80-14 covers installment lenders.

(4) The Department has made available an Applications Manual and a Statement of Policy with details of the procedures required for most activities of regulated institutions in Georgia. Interested persons should consult the Applications Manual, Department's Statement of Policy, Rules, and applicable law which form the basis for Department decisions. These materials are available electronically. The regulations provide an overview; the Applications Manual and Statement of Policy provide detailed instructions.

(5) Fees are provided in Rule Chapter 80-5.

(6) References in these Rules to "Code Section", "O.C.G.A.", "Title", "Code of Georgia", and "Section" are to the Official Code of Georgia Annotated.

History

Authority: O.C.G.A. §§ 7-1-61, 7-1-602
History. Original Rule entitled "Definition" adopted. F. and eff. June 30, 1965.
Repealed: New Rule entitled "Form of Application, Request for" adopted. F. June 9, 1972; eff. June 29, 1972.
Repealed: New Rule of the same title adopted. F. July 12, 1974; eff. August 1, 1974.
Amended: F. Aug. 28, 1975; eff. Sept. 17, 1975.
Repealed: New Rule of the same title adopted. F. July 13, 1981; eff. August 2, 1981.
Amended: Rule retitled "Application Forms, Charter Application Request". F. Sept. 26, 1995; eff. Oct. 16, 1995.
Amended: Rule retitled "Applications, Registrations and Notifications, Generally." F. July 14, 1998; eff. August 3, 1998.
Amended: F. July 12, 1999; eff. August 1, 1999.
Amended: F. Aug. 22, 2006; eff. Sept. 11, 2006.
Amended: F. Jun. 10, 2014; eff. Jun. 30, 2014.
Amended: F. June 15, 2015; eff. July 5, 2015.
Amended: F. July 7, 2021; eff. July 27, 2021.
Amended: F. Dec. 16, 2021; eff. Jan. 5, 2022.
Amended: F. July 7, 2022; eff. July 27, 2022.
Amended: F. July 7, 2023; eff. July 27, 2023.
Amended: F. July 12, 2024; eff. Aug. 1, 2024.

Ga. Comp. R. & Regs. r. 80-1-1-.02 Applications: Bank Charter {#sec-ga.-comp.-r.-regs.-r.-80-1-1-.02 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-1-.02}

(1) An application for chartering a Georgia state chartered bank is necessary. An organizing group should schedule an initial meeting with the Department to discuss chartering issues. An applicant holding company that has established a lawful banking business in Georgia which meets certain criteria may qualify for expedited processing.

(2) Specific requirements for documents, meetings with the Department and publication of notices are contained in the Applications Manual and the Statement of Policies of the Department.

(3) Submission and completion of application.

(a) A charter application shall be filed with the Department. If the Department notifies the applicant of deficiencies in the application, the applicant must complete the application within thirty (30) days after receipt of such notification.

(b) An application will not be deemed to have been officially accepted until such time as the required fee has been paid and all portions of the application have been completed to the satisfaction of the Department.

History

Authority: O.C.G.A. § 7-1-61
History. Original Rule entitled "Bank Offices and Bank Facilities" was filed and effective on June 30, 1965.
Amended: Rule repealed and a new Rule entitled "Submission and Completion of Applications" adopted. Filed June 9, 1972; effective June 29, 1972.
Amended: Rule repealed and a new Rule of the same title adopted. Filed July 12, 1974; effective August 1, 1974.
Amended: Filed August 28, 1975; effective September 17, 1975.
Amended: Filed November 4, 1975; effective November 24, 1975.
Amended: Rule repealed and a new Rule of the same title adopted. Filed July 13, 1981; effective August 2, 1981.
Amended: Rule retitled "Financial Institution Applications: Financial Institution Charter" adopted. F. Jul. 14, 1998; eff. Aug. 3, 1998.
Amended: F. Dec. 16, 2021; eff. Jan. 5, 2022.
Amended: New title, "Applications: Bank Charter." F. July 12, 2024; eff. Aug. 1, 2024.

Ga. Comp. R. & Regs. r. 80-1-1-.03 Order of Investigation of Charter by Department {#sec-ga.-comp.-r.-regs.-r.-80-1-1-.03 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-1-.03}

(1) Applications will not be considered for investigation until accorded official acceptance in compliance with Rule 80-1-1-.02(3)(b) , until any appropriate application to the federal banking agency having jurisdiction has been accepted for filing by the federal agency, and until any required publication of the Notice of Filing is completed.

(2) Investigations of conflicting applications shall be conducted by the Department in order of receipt and official acceptance of the applications, in accordance with the above, as determined by the date of acceptance recorded by the Department or the date of receipt by the appropriate federal agency, whichever is later.

History

Authority: O.C.G.A. § 7-1-61
History. Original Rule entitled "Expansion of Existing Banking House" was filed and effective on June 30, 1965.
Amended: Rule repealed and a new Rule entitled "Order of Investigation" adopted. Filed June 9, 1972; effective June 29, 1972.
Amended: Rule repealed and a new Rule of the same title adopted. Filed July 12, 1974; effective August 1, 1974.
Amended: Filed August 28, 1975; effective September 17, 1975.
Amended: Rule repealed and a new Rule of the same title adopted. Filed July 13, 1981; effective August 2, 1981.
Amended: Rule retitled "Order of Investigation of Charter by Department" adopted. F. Jul. 14, 1998; eff. Aug. 3, 1998.
Amended: Jul. 12, 1999; eff. Aug. 1, 1999.
Amended: F. July 12, 2024; eff. Aug. 1, 2024.

Ga. Comp. R. & Regs. r. 80-1-1-.04 Notification of Filing and Protest {#sec-ga.-comp.-r.-regs.-r.-80-1-1-.04 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-1-.04}

(1) Applicants will be notified of receipt of applications for filing unless the department issues an approval of the application within seven days of receipt. For bank charter applications, applicants will be notified of official acceptance of the application upon satisfaction of the elements in Rule 80-1-1-.02(3)(b) . For a charter application pursuant to O.C.G.A. § 7-1-392 or merger application pursuant to O.C.G.A. § 7-1-532 , the applicant shall cause a notice, in such form as the Department may prescribe, to be published in a newspaper of general circulation in the community in which the applicant's main office is located and in a newspaper of general circulation in any other community in which the applicant proposes to engage in business as notification to any interested parties of their right to comment or protest the application by delivering such comment or protest to the Department, unless otherwise provided in a rule or law pertaining to a specific transaction. The Applications Manual should be referenced for details regarding the publication requirements, if any, for other types of applications.

(2) Publication of notice for public comment on a bank charter application pursuant to O.C.G.A. § 7-1-392 or merger application pursuant to O.C.G.A. § 7-1-532 may commence no sooner than five (5) days prior to the date the application is mailed or delivered to the Department. Any person desiring to comment upon or formally protest a bank charter application must notify the Department in writing within 30 days of the date of the publication of the notice in paragraph (1). The comment period may be extended if official acceptance of a bank charter application is delayed. Any person desiring to comment upon or formally protest a merger or acquisition pursuant to O.C.G.A. § 7-1-532 as set forth in Rule 80-6-1-.05 must notify the Department within 30 days of the date of the publication of the notice in paragraph (1).

(3) All comments and any notices of intent to protest pursuant to paragraph (2) and filed on a timely basis shall be reviewed and considered by the Department. The Commissioner may grant or deny a request for hearing in connection with a protest of an application. The Commissioner shall hold a hearing if he/she determines that written comments are insufficient to make an adequate presentation of the issues raised or if he/she determines that a hearing would otherwise be in the public interest. If a hearing is to be held, the protester and the applicant will be notified of a date as established by the Department. Intention to appear at such hearing must be filed by the protester in writing with the Department within 15 days from date of notification of hearing date. Failure to file such intentions shall constitute grounds for canceling any scheduled hearing.

(4) Notwithstanding other provisions of this regulation, final determination to grant, conditionally or otherwise, or deny any application shall be in the sole discretion of the Commissioner of Banking and Finance or his/her legally authorized representative, and such action shall be final.

History

Authority: O.C.G.A. §§ 7-1-7, 7-1-61
History. Original Rule entitled "Sale of Money Orders at Non-Banking Outlets" was filed and effective on June 30, 1965.
Amended: Rule repealed. Filed June 9, 1972; effective June 29, 1972.
Amended: Rule entitled "Notification of Filing, Protest" adopted. Filed July 12, 1974; effective August 1, 1974.
Amended: Filed July 13, 1981; effective August 2, 1981.
Amended: Filed July 24, 1986; effective September 1, 1986, as specified by the Agency.
Amended: F. Sept. 26, 1995; eff. Oct. 16, 1995.
Amended: Rule retitled "Notification of Filing and Protest." F. Jul. 14, 1998; eff. Aug. 3, 1998.
Amended: F. Jul. 12, 1999; eff. Aug. 1, 1999.
Amended: F. July 7, 2021; eff. July 27, 2021.
Amended: F. Dec. 16, 2021; eff. Jan. 5, 2022.
Amended: F. July 12, 2024; eff. Aug. 1, 2024.

Ga. Comp. R. & Regs. r. 80-1-1-.05 Public Hearing {#sec-ga.-comp.-r.-regs.-r.-80-1-1-.05 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-1-.05}

(1) Hearings described in this Rule are held for the purpose of giving the public an opportunity to voice protest of charter applications as well as merger and acquisition applications pursuant to Rule 80-6-1-.05 and are not intended to conform to hearings under the Georgia Administrative Procedure Act. Such hearing shall be a forum for the presentation of information which the Commissioner shall consider in ruling on an application.

(2) Hearings under this Rule shall be conducted in accordance with the following procedure:

(a) The presiding officer, who shall be appointed by the department in its sole discretion, will open the hearing with an explanation of the hearing procedure, identification of the parties, and statement of the application at issue.

(b) The applicant shall present a brief opening summary of the contents and purpose of the application.

(c) Following the applicant's statement, each person contesting the application shall present his or her data and material, oral or documentary. The contestants may agree, with the approval of the presiding officer, to have one of their number make their presentation.

(d) Following each contestant's presentation, the applicant shall have an opportunity to rebut, clarify or expand upon any information presented by the contestant with oral or documentary material.

(e) The applicant and contestants shall present their information in concise fashion and the presiding officer shall have the authority to limit such presentations if they are repetitive, inappropriate, or irrelevant.

(3) The Department shall have all of the testimony recorded, retain two copies of the transcript and each contestant and the applicant shall receive a copy. The contestants shall be jointly responsible for all the costs of the transcription of the testimony and for the hearing, unless an applicant requests the hearing, in which case the applicant shall bear the cost. No charge shall be assessed for the presiding officer unless the officer is not an employee of the Department, in which case the cost shall be borne as above.

(4) The obtaining and use of witnesses is the responsibility of the parties. All witnesses will appear voluntarily, but any person appearing as a witness may be subject to questioning by the presiding officer. The refusal of a witness to answer questions may be considered by the Department in determining the weight to be accorded the testimony of that witness. Witnesses shall not be sworn.

(5) Formal rules of evidence shall not be applicable to these hearings. Documentary material shall be of a size consistent with ease of handling, transportation, and filing. While large exhibits may be used during the hearing, copies of such exhibits must be provided by the party in reduced size for submission as evidence. Two copies of all such documentary evidence shall be furnished to the Department, and one copy shall be furnished to each contestant and the applicant during the hearing.

(6) The presiding officer or any person designated by the Department shall be the final judge of all procedural questions not governed by this rule. The presiding officer shall have the authority to limit the amount of time available to each party and to impose such other limitations as he or she shall deem reasonable.

(7) In preparation for a final determination on the application, the Department shall review the exhibits and the testimony as recorded, and the presiding officer shall make a recommendation of findings to the Commissioner.

History

Authority: O.C.G.A. § 7-1-61
History. Original Rule entitled "Public Hearing" adopted. F. July 12, 1974; eff. August 1, 1974.
Amended: F. Aug. 28, 1975; eff. Sept. 17, 1975.
Amended: F. Sept. 26, 1995; eff. Oct. 16, 1995.
Amended: F. July 14, 1998; eff. August 3, 1998.
Amended: F. July 7, 2021; eff. July 27, 2021.
Amended: F. Dec. 16, 2021; eff. Jan. 5, 2022.

Ga. Comp. R. & Regs. r. 80-1-1-.06 Application or Notice Requirements for Additional Banking Locations {#sec-ga.-comp.-r.-regs.-r.-80-1-1-.06 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-1-.06}

(1) Definitions of terms used in this regulation are provided in O.C.G.A. § 7-1-600 .

(2) Establishment of a branch office:

(a) New or additional branch offices may be established with the prior approval of the Department by regular application or by expedited application for certain qualified banks as provided below. The manner and criteria for establishment of branch offices is provided for in O.C.G.A. § 7-1-602 .

(b) The rules for processing regular applications for branch offices are the same as those for bank charters, contained in Department of Banking and Finance Rule numbers 80-1-1-.02 and 80-1-1-.03 , with the exception of 80-1-1-.03(1) . In lieu of official acceptance, the Department will notify applicants for branch offices of the date of receipt of the application.

(3) In lieu of a regular application, a bank which satisfies the qualifying criteria for expedited processing in paragraph (1) of Rule 80-1-1-.10 may submit an expedited application to establish a new branch office. The authority, manner and criteria for establishment of a branch office under this procedure are provided for in O.C.G.A. § 7-1-602 and this Rule.

(a) The expedited application must include the following:

(i) The physical address of the branch office;

(ii) A statement regarding whether or not an insider is involved in the acquisition, construction, or leasing of the property;

(iii) The anticipated fixed asset investment for this proposal, and whether the bank will be in compliance with O.C.G.A. § 7-1-262 ; and

(iv) A statement certifying that the applicant qualifies for the expedited application procedure under the applicable qualifying criteria.

(b) Unless it has previously issued an approval letter under subparagraph (c), the Department will use its best efforts to acknowledge a qualifying expedited application or notify the applicant that it does not qualify for expedited processing within two business days of receipt of such notice.

(c) The approval to establish the branch office will be effective at the earlier of: an approval letter from the Department, or 10 business days from the date of acknowledged receipt.

(d) The Department may remove the notice from this expedited procedure for any of the reasons set forth in paragraph (2) of Rule 80-1-1-.10 .

History

Authority: O.C.G.A. §§ 7-1-7, 7-1-61, 7-1-602, 7-1-603
History. Original Rule entitled "Extensions of Existing Facilities" adopted. F. Aug. 28, 1975; eff. Sept. 17, 1975.
Amended: F. July 7, 1988; eff. July 27, 1988.
Amended: Rule retitled "Letter Form Application for Extension, ATM Notification" adopted. F. Sept. 26, 1995; eff. Oct. 16, 1995.
Amended: F. Aug. 26, 1997; eff. Sept. 15, 1997.
Amended: Rule retitled "Application Requirements for Additional Banking Locations". F. July 14, 1998; eff. August 3, 1998.
Amended: F. July 12, 1999; eff. August 1, 1999.
Amended: F. Dec. 6, 1999; eff. Dec. 26, 1999.
Amended: F. Dec. 18, 2000; eff. Jan. 7, 2001.
Amended: F. Jan. 8, 2021; eff. Jan. 28, 2021.
Amended: F. July 7, 2022; eff. July 27, 2022.

Ga. Comp. R. & Regs. r. 80-1-1-.07 Expansion or Extension of Banking Location {#sec-ga.-comp.-r.-regs.-r.-80-1-1-.07 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-1-.07}

(1) No notification is necessary for an extension that is an ATM, cash dispensing machine, night depository or point of sale terminal.

(2) If any other extension is located within the boundary lines of a single contiguous area of property owned or leased by the bank and used as a banking location or if it is within 200 yards of such banking location, then the bank must provide written notice to the Department of such extension. Such notification shall be in letter form and shall specify:

(a) Exact location of proposed extension;

(b) The nature of service that will be provided at the extension;

(d) Ownership of the location; and

(e) Cost of establishing the extension, and if site is to be leased, a copy of the proposed lease agreement.

(3) For all other extensions that are not addressed in paragraphs (1) and (2), a bank must obtain prior approval from the Department by submitting a letter form application.

History

Authority: O.C.G.A. §§ 7-1-590; 7-1-603
History. Original Rule entitled "Standards for Consideration of Applications, Statement of Policies" was filed on July 13, 1981; effective August 2, 1981.
Amended: F. Aug. 26, 1997; eff. Sept. 15, 1997.
Amended: Rule retitled "Expansion or Extension of Banking Location" adopted. F. Jul. 14, 1998; eff. Aug. 3, 1998.
Amended: F. Jul. 12, 1999; eff. Aug. 1, 1999.
Amended: F. Dec. 6, 1999; eff. Dec. 26, 1999.
Amended: F. Jan. 8, 2021; eff. Jan. 28, 2021.

Ga. Comp. R. & Regs. r. 80-1-1-.08 Procedures for Other Transactions, Applications and Notices {#sec-ga.-comp.-r.-regs.-r.-80-1-1-.08 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-1-.08}

(1) Conversion to state-chartered bank. A meeting with the Department should precede filing a letter form application, which application should include all of the information requested in the Applications Manual.

(2) Reserved.

(3) Mergers. The procedure for approval of a merger involves the filing of a letter application to the Department and, if a state bank is the surviving financial institution, the publication of Articles of Merger.

(4) Change in Control:

(a) A letter form notification to the Department is required, together with a copy of any federal filing.

(b) The board of directors of the financial institution subject to a change in control shall be notified of the filing of the notice with the Department unless the individuals involved request that such notice be withheld and, in the opinion of the Department, they give a valid reason for withholding such notice.

(5) Fiduciary Powers. A full application as detailed in the Applications Manual is required for exercise of full trust powers. Exercise of limited trust services and a single trust service requires a letter form application. Request to perform a single trust service may be expedited. No publication is required.

(6) Creation and Operation of a Subsidiary of a Bank. O.C.G.A. §§ 7-1-261 , 7-1-262 , and 7-1-288 provide for the ability of a bank to exercise powers incidental to banking and to create a separate subsidiary to effect such powers as may be financial in nature, incidental or complementary to the provision of financial services, subject in most cases to certain investment limitations. A letter form application to create or acquire a subsidiary shall describe the activity, how it relates to the business of banking and finance, and what protections will be in place to deal with any associated risks. An application to create and operate a subsidiary of a bank can be expedited if the requirements of Rule 80-1-1-.10 are satisfied.

(7) Relocation and Simultaneous Redesignation of two or more banking locations.

(a) Definitions:

(i) Relocation. The location of an existing banking location is to be moved to a new or additional location which is to be constructed, purchased or leased within the same immediate vicinity of the existing branch.

(ii) Redesignation. Where two existing bank locations exchange their designations, a redesignation occurs. Under a redesignation, a branch office becomes the main office and the main office, if it is not closed, becomes a branch office.

(b) Procedure for a Relocation. A bank meeting the qualifying criteria for expedited processing in paragraph (1) of Rule 80-1-1-.10 may submit a letter form notification to relocate an existing banking location. The approval to relocate an existing banking location under the notice procedure will be effective at the earlier of: an approval letter from the Department, or 10 business days from the date of acknowledged receipt. In the event the bank does not qualify for expedited processing, a form application should be submitted to the Department, which will normally be processed within 30 days from receipt of a completed application. All relocations should include a notice to customers posted in a conspicuous place of the affected banking location as well as on the bank's website at least 30 days before relocating. In addition, if any relocation proposal involves relocation of the bank's main office, additional procedures such as amendment of the bank's Articles of Incorporation may apply.

(c) Procedure for a Redesignation. Upon receipt of a letter form request setting forth the details of the proposed redesignation, the Department will review and process such request within seven (7) days. In the event the bank intends on closing the former main office as part of a redesignation, then the closing procedures for a bank location must be followed.

(8) Changes in Capital Structure involving Stock Redemption and Conversions. O.C.G.A. §§ 7-1-414 and 7-1-419 should be consulted. A complete letter form application describing the transaction should be acted upon within 10 business days of receipt.

(9) Letter form applications are required for the following other activities of banks.

(a) Name reservation and permission is treated in O.C.G.A. §§ 7-1-130 , 7-1-131 , 7-1-242 , and 7-1-243 . The Department may approve a name for a bank holding company that is not distinguishable on the records of the Secretary of State from the name of a deposit taking financial institution wholly owned by that bank holding company. If such bank holding company subsequently sells the bank with a similar name the bank holding company may retain its name only if the subject bank's name is no longer in use.

(b) Amendment of Articles of Incorporation. Part 13 of Article 2 of Title 7. Required publication shall be made in the official organ of the county where the main office of the institution is located.

(10) A bank that meets the criteria in Rule 80-1-1-.10 and that wishes to invest in shares of stock of a bank engaged in providing banking or other financial services to depository financial institutions, which bank's ownership consists primarily of such depository financial institutions, may do so by filing a notice with the Department fully describing the transaction at least 10 days before such investment is made;

(11) A bank that meets the criteria in Rule 80-1-1-.10 and that wishes to invest in shares of stock of a bank service corporation created to provide support services for one or more financial institutions may take advantage of expedited processing as provided in the Department's Applications Manual.

(12) Opening and closing of a representative office. Prior to opening a representative office, a Georgia state-chartered bank, bank holding company, or subsidiary of a bank or bank holding company must register the location with the Department by filing a letter form registration with the Department. Prior to closing a representative office, a bank, bank holding company, or subsidiary of a bank or bank holding company must post notice of the closing at such location at least 30 days in advance of the intended closure. The bank, bank holding company, or subsidiary of a bank or bank holding company must also disclose the fact of the closure on its website at least 30 days in advance of the intended closure and such notice shall be posted for at least 30 consecutive days. Within two days of providing the notice, the bank, bank holding company, or subsidiary of bank or bank holding company must forward to the Department a copy of the notice posted at the representative office as well as the disclosure contained on its website to the Department.

History

Authority: O.C.G.A. § 7-1-61
History. Original Rule entitled "Other Transactions which Require Approval" adopted. F. July 14, 1998; eff. August 3, 1998.
Amended: F. July 12, 1999; eff. August 1, 1999.
Amended: F. Dec. 18, 2000; eff. Jan. 7, 2001.
Amended: Rule retitled "Procedures for Other Transactions, Expired, Letter Form and Notice Only Applications" adopted. F. Oct. 22, 2001; eff. Nov. 11, 2001.
Amended: F. Jan. 8, 2021; eff. Jan. 28, 2021.
Amended: F. July 7, 2021; eff. July 27, 2021.
Amended: New title, "Procedures for Other Transactions, Applications and Notices." F. July 7, 2022; eff. July 27, 2022.

Ga. Comp. R. & Regs. r. 80-1-1-.09 Standards for Consideration of Applications Generally; Applications Manual and Statement of Policy {#sec-ga.-comp.-r.-regs.-r.-80-1-1-.09 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-1-.09}

(1) Standards for consideration of applications submitted by banks, whether covered under this Rule Chapter or otherwise, shall in most cases include: evaluations of financial history and condition of the applicant; adequacy of applicant capital; future earnings prospects for applicant; character, capacity and ability of applicant management; consistency of corporate powers; and effects on competition. Department policies in regard to such evaluations are discussed in greater detail in the Department's Statement of Policy ("Policy"), Applications Manual ("Manual"), and in instructions accompanying applications. The Manual and Policy can be obtained from the Department.

(2) If the Department notifies the applicant of deficiencies in the application, the applicant must complete the application by curing the deficiencies within thirty (30) days after receipt of such notification.

(3) An application will not be deemed to have been filed and received until such time as the required application fee, and any other unpaid fee or fine owed to the Department, has been paid and all portions of the application have been completed to the satisfaction of the Department.

(4) Decisions on applications may be conditioned and may be nullified should the Department determine that circumstances are substantially different from those upon which the decision was based.

History

Authority: O.C.G.A. § 7-1-61
History. Original Rule entitled "Standards for Consideration of Applications Generally; Applications Manual and Statement of Policies; Trust Production Office Criteria" adopted. F. July 14, 1998; eff. August 3, 1998.
Amended: F. July 12, 1999; eff. August 1, 1999.
Amended: F. Aug. 22, 2006; eff. Sept. 11, 2006.
Amended: F. June 15, 2015; eff. July 5, 2015.
Amended: New title "Standards for Consideration of Applications Generally; Applications Manual and Statement of Policies." F. Jan. 8, 2021; eff. Jan. 28, 2021.
Amended: F. July 7, 2021; eff. July 27, 2021.
Amended: New title, "Standards for Consideration of Applications Generally; Applications Manual and Statement of Policy." F. July 12, 2024; eff. Aug. 1, 2024.

Ga. Comp. R. & Regs. r. 80-1-1-.10 Qualifying Criteria for Expedited Processing for Applications by a Bank Other than Charter {#sec-ga.-comp.-r.-regs.-r.-80-1-1-.10 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-1-.10}

(1) The following criteria, when met and certified to by an applicant financial institution, shall, where permitted by statute or rule, qualify the bank to utilize a shorter application and/or an expedited process for approval:

(a) The bank must be well capitalized as defined in the appropriate capital regulation and guidance of the institution's primary federal regulator;

(b) The bank must have received a CAMELS composite rating of "1" or "2" as a result of the most recent state or federal examination;

(c) The bank must have a satisfactory or better Community Reinvestment Act rating from its primary federal regulator at its most recent examination; and

(d) The bank must not be subject to any agreements, orders, prompt corrective action directives or other enforcement or administrative agreements with the Department or its primary federal regulator or other chartering authority.

(2) The Department may deny or remove from expedited processing any bank's application where it finds that:

(a) Safety and soundness concerns of the Department dictate a more comprehensive review;

(b) Any material adverse comment is received by the Department;

(d) If applicable, any acquisition of fixed assets would cause the institution to exceed the state fixed asset limitation; or

(e) Any other good cause exists for denial or removal. In this event, the institution will be notified that expedited processing is not available, the reason, and instructions as to how to proceed.

History

Authority: O.C.G.A. §§ 7-1-61, 7-1-79
History. Original Rule entitled "Qualifying Criteria for Expediting Processing for Bank Applications" adopted. F. July 14, 1998; eff. August 3, 1998.
Amended: Rule retitled "Qualifying Criteria for Expediting Processing for Applications by a Bank (Other than Charter)". F. July 12, 1999; eff. August 1, 1999.
Amended: F. Jan. 8, 2021; eff. Jan. 28, 2021.
Amended: New title, "Qualifying Criteria for Expedited Processing for Applications by a Financial Institution Other than Charter." F. July 7, 2022; eff. July 27, 2022.
Amended: New title, "Qualifying Criteria for Expedited Processing for Applications by a Bank Other than Charter." F. July 12, 2024; eff. Aug. 1, 2024.

Ga. Comp. R. & Regs. r. 80-1-1-.11 Acquisition of Voting Control of Large Financial Institutions {#sec-ga.-comp.-r.-regs.-r.-80-1-1-.11 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-1-.11}

(1) Notice and approval to acquire voting control of a large state chartered financial institution. No person shall (a) acquire voting control of any large financial institution or (b) initiate or actively propose in opposition to the board of directors of the large financial institution any corporate action by a large financial institution, in each case without the prior approval of the Department, pursuant to the notice and approval procedures set forth in Part 10 of Title 7. The person shall provide a certification to the Department, along with a copy of the actual notification to the affected large financial institution, that it has filed an application with the Department under this Section. No application for acquisition of voting control of a large financial institution shall be considered complete until such certification and copy of the required notification are filed and accepted by the Department.

(2) Exceptions.

(a) Any person who acquires voting control of a large financial institution solely for the purpose of investment shall not be subject to the requirement set forth in subsection (1)(a) of this Rule 80-1-1-.11 .

(b) Any person who acquired voting control of a large financial institution prior to November 19, 2007, shall not be subject to the requirement set forth in subsection (1)(a) of this Rule 80-1-1-.11 , although subsection (1)(a) shall apply to any subsequent acquisition of voting securities of such large financial institution by such person.

(c) Any person who is (i) registered as an "investment company" under the Investment Company Act of 1940 and (ii) eligible to report its holdings on a Schedule 13G under Rule 13d-1(c) promulgated under the Securities Exchange Act of 1934 shall not be subject to the requirement set forth in subsection (1) of this Rule 80-1-1-.11 .

(d) Any person who has voting control of less than one percent of a large financial institution shall not be subject to the requirement set forth in subsection (1)(b) of this Rule 80-1-1-.11 .

(3) Definitions.

(a) Acting in concert. For purposes of this Rule 80-1-1-.11 , acting in concert may include, without limitation, any of the following:

knowing participation in a joint activity or interdependent conscious parallel action towards a common goal whether or not pursuant to an express agreement; or
a combination or pooling of voting or other interests in the securities for a common purpose pursuant to any contract, understanding, relationship, agreement or other arrangement, whether written or otherwise. A person or company which acts in concert with another person or company ("other party") shall also be deemed to be acting in concert with any person or company who is also acting in concert with that other party, except that any tax-qualified employee stock benefit plan as defined in 12 CFR 192.25 will not be deemed to be acting in concert with its trustee or a person who serves in a similar capacity solely for the purpose of determining whether stock held by the trustee and stock held by the plan will be aggregated.

(b) Corporate action. For purposes of this Rule 80-1-1-.11 , corporate action may include, without limitation, any of the following:

an extraordinary corporate transaction, such as a merger, reorganization or liquidation involving a large financial institution or any of its subsidiaries;
a sale or transfer of a material amount of assets of a large financial institution or any of its subsidiaries;
any change in the present board of directors or management of a large financial institution, including any plan or proposal to change the number or term of directors or to fill any existing vacancies on the board;
any material change in the present capitalization or dividend policy of a large financial institution;
any other material change to a large financial institution's business or corporate structure;
changes in a large financial institution's charter, bylaws or other instruments or other actions which may impede or facilitate the acquisition of control of a large financial institution by any person;
causing a class of securities of a large financial institution to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association;
a class of equity securities of a large financial institution becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Act of 1933; and
any action similar to any of those enumerated above.

(c) Large financial institution. A state-chartered financial institution or bank holding company having consolidated assets in excess of $ 5 billion in the aggregate, as determined as of the end of the most recent fiscal quarter of the financial institution or bank holding company, as applicable, and set forth in its most recent quarter end financial statements filed pursuant to the Securities Exchange Act of 1934.

(d) Person. An individual or a corporation, partnership, limited liability company, trust, association, joint venture, pool, syndicate, sole proprietorship, unincorporated organization, or any other form of entity not specifically listed in this paragraph.

(e) Solely for the purpose of investment. Held by the acquirer with no intention of participating in the formulation, determination or direction of the basic business decisions of the financial institution. Any person holding shares of a financial institution in a fiduciary capacity shall be deemed to hold such shares solely for the purpose of investment unless such person is acting in concert with a person other than its beneficiary. Any person exercising voting control in connection with a proposal of corporate action shall not be deemed to have acquired voting control solely for the purpose of investment intent.

(f) Voting control. The power of any person, acting directly or indirectly or acting in concert with one or more persons, to exercise the voting rights of five percent or more of any class of voting securities whether or not such voting rights are exercised by the shareholder with the rights to dispose of the shares giving rise to such voting rights. A person shall be deemed to have the power to vote securities that it has the right to acquire in the future.

History

Authority: O.C.G.A. § 7-1-61
History. Original Rule entitled "Acquisition of Voting Control of Large Financial Institutions" adopted. F. Nov. 20, 2007; eff. Dec. 10, 2007.
Amended: F. June 16, 2026; eff. July 6, 2026.

Ga. Comp. R. & Regs. r. 80-1-1-.12 Notification of Intent to Utilize a Federal Power {#sec-ga.-comp.-r.-regs.-r.-80-1-1-.12 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-1-.12}

(1) In order to invoke O.C.G.A. § 7-1-296 , a bank must provide the Department with notice if it intends to utilize a federal power or avail itself of any federal preclusion or preemption of any provision of law, rule or regulation of this State. Such notice shall contain the following information:

(a) A detailed description of the proposed activity to be undertaken by the bank;

(b) A citation to the specific federal authorization of such proposed activity;

(d) Documentation establishing that the bank satisfies all the federal requirements, limitations, and restrictions to engage in the activity;

(e) To the extent the activity relates to a new product or service to be offered by the bank, an analysis of how the proposed activity fits within the bank's business plan;

(f) An analysis of the projected financial impact of the proposed activity; and

(g) Such other information as may be required by the Department.

(2) A notice shall be incomplete and, thus, not received by the Department until all information has been provided to the satisfaction of the Department.

(3) If the Department determines that the notice is incomplete, then the Department shall provide the bank with notice of this fact. The bank must cure any deficiencies in the notice or provide any information requested by the Department within thirty (30) days after receipt of such notification from the Department. If the bank fails to address and/or cure the deficiencies or provide the requested information to the Department within the thirty (30) day period, the notice shall be deemed withdrawn. However, prior to the expiration of the thirty (30) day period, a bank can make a written request for an extension of time to cure the deficiencies or provide the information requested by the Department and it shall be in the Commissioner's sole discretion to approve, conditionally or otherwise, or deny the request for an extension of time. Further, the Department may provide a bank with multiple notifications of deficiencies with the notice or multiple requests for additional information.

(4) After the bank satisfactorily completes the notice and provides all of the required documents, the Department will issue an official acceptance letter evidencing that the notice is deemed complete. The issuance of the official acceptance letter shall not be construed as evidence that the federal power identified in the notice is authorized.

(5) Within 45 (forty-five) days after issuance of the official acceptance letter, the Department may object to the exercise of the federal power, in whole or in part, or to the federal preclusion or preemption of the law, rule, or regulation of this State, in whole or in part. Prior to the expiration of the review period, the Department may extend the review period for an additional 45 (forty-five) days by providing the bank with written notice of such extension. In the event the Department does not object to the exercise of the federal power during the applicable review period, the bank will have satisfied the requirements in O.C.G.A. § 7-1-296 to exercise the federal power.

History

Authority: O.C.G.A. §§ 7-1-61; 7-1-296
History. Original Rule entitled "Notification of Intent to Utilize a Federal Power" adopted. F. June 27, 2018; eff. July 17, 2018.

Ga. Comp. R. & Regs. r. 80-1-1-.13 Savings Promotion Raffle {#sec-ga.-comp.-r.-regs.-r.-80-1-1-.13 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-1-.13}

At least thirty (30) days prior to conducting a savings promotion raffle under O.C.G.A. § 7-1-239.10, a bank must provide the Department with written notice detailing the proposed savings promotion raffle. Such notice shall, at a minimum, contain the following information:

(a) A detailed description of the terms of the proposed savings promotion raffle including, but not limited to, the type of account that will be utilized to offer the savings promotion raffle, the interest rate to be paid on the account, the fees associated with the account, the fees associated with the most substantially similar account to the savings promotion raffle account offered by the bank, the amount required to be deposited in the account for a customer to be entered in the raffle and any limitations on the number of entries per customer, the frequency of drawings, and available prizes;

(b) Bank's policies and procedures related to the proposed savings promotion raffle;

(c) Sample of all disclosures provided to customers opening a savings promotion raffle account in accordance with O.C.G.A. § 7-1-239.10(c)(1) ;

(d) Identity and contact information of all third-party service providers, if any, who are contracted to manage or provide administrative support related to conducting the proposed savings promotion raffle; and

(e) If the savings promotion raffle is conducted in whole or in part by a third-party service provider, a document from the third-party service provider identifying the number and location of all other financial institutions whose customers and members are eligible to participate in the savings promotion raffle.

(2) A bank's directors, officers, employees, and the members of such persons' immediate family, as defined by O.C.G.A. § 20-2-58.1 , are prohibited from participating in a savings promotion raffle conducted by that bank. A bank's directors and officers are prohibited from participating in a savings promotion raffle at any financial institution if the savings promotion raffle is administered by the same third-party service provider that administers the savings promotion raffle at the bank.

History

Authority: O.C.G.A. §§ 7-1-61; 7-1-239.10
History. Original Rule entitled "Savings Promotion Raffle" adopted. F. July 9, 2019; eff. July 29, 2019.

Subject 80-1-2 Agency Relationships of Financial Institutions; Bank Service Contracts

Ga. Comp. R. & Regs. r. 80-1-2-.01 General Provisions and Definitions {#sec-ga.-comp.-r.-regs.-r.-80-1-2-.01 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-2-.01}

(1) A state bank may contract with another financial institution or a third party service provider to provide certain services in a principal-agent relationship, provided both parties comply with the applicable rules and regulations of the Department.

(2) Agency relationships shall comport with safety and soundness principles to protect the financial integrity of the bank and the accounts of its customers.

(3) Definitions:

(a) "Bank Service Contract" shall mean a contract executed by a bank and a third party, to provide financial services, whether direct or indirect, to the bank.

(b) "Third party service provider" shall mean any provider of financial services to a bank as authorized by O.C.G.A. § 7-1-72 .

(4) This chapter is not intended to apply to non-banking related operational or administrative functions which do not tend to impact the safety and soundness of the bank or the accessibility to the Department of records.

History

Authority: O.C.G.A. §§ 7-1-61, 7-1-612
History. Original Rule entitled "Bank Service Arrangement with Bank Service Corporation or Others" adopted. F. and eff. June 30, 1965.
Repealed: New Rule entitled "General Provisions and Definitions" adopted. F. June 9, 1972; eff. June 29, 1972.
Amended: F. Aug. 28, 1975; eff. Sept. 17, 1975.
Repealed: New Rule of same title adopted. F. Nov. 7, 1995; eff. Nov. 27, 1995.
Amended: F. July 12, 1999; eff. August 1, 1999.
Amended: F. Dec. 18, 2000; eff. Jan. 7, 2001.
Amended: F. July 28, 2003; eff. August 17, 2003.
Amended: F. June 20, 2016; eff. July 10, 2016.
Amended: F. July 7, 2023; eff. July 27, 2023.

Ga. Comp. R. & Regs. r. 80-1-2-.02 Repealed {#sec-ga.-comp.-r.-regs.-r.-80-1-2-.02 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-2-.02}

History

Authority: O.C.G.A. § 7-1-61
History. Original Rule entitled "Application for Permission to Perform Bank Services" adopted. F. June 9, 1972; eff. June 29, 1972.
Amended: F. Aug. 28, 1975; eff. Sept. 17, 1975.
Amended: F. July 13, 1981; eff. August 2, 1981.
Repealed: New Rule entitled "Direct Bank Services Subject to Agency Regulation" adopted. F. Nov. 7, 1995; eff. Nov. 27, 1995.
Amended: F. July 12, 1999; eff. August 1, 1999.
Amended: F. July 28, 2003; eff. August 17, 2003.
Repealed: F. July 7, 2023; eff. July 27, 2023.

Ga. Comp. R. & Regs. r. 80-1-2-.03 Repealed {#sec-ga.-comp.-r.-regs.-r.-80-1-2-.03 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-2-.03}

History

Authority: O.C.G.A. § 7-1-61
History. Original Rule entitled "Contracting to Perform or Have Performed Bank Services" adopted. F. June 9, 1972; eff. June 29, 1972.
Amended: F. Aug. 28, 1975; eff. Sept. 17, 1975.
Amended: F. July 13, 1981; eff. August 2, 1981.
Repealed: New Rule entitled "Application to Conduct Agency Relationship" adopted. F. Nov. 7, 1995; eff. Nov. 27, 1995.
Amended: F. July 28, 2003; eff. August 17, 2003.
Repealed: F. July 7, 2023; eff. July 27, 2023.

Ga. Comp. R. & Regs. r. 80-1-2-.04 Repealed {#sec-ga.-comp.-r.-regs.-r.-80-1-2-.04 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-2-.04}

History

Authority: O.C.G.A. § 7-1-61
History. Original Rule entitled "Review by Department of Agency Agreement" adopted. F. Nov. 7, 1995; eff. Nov. 27, 1995.
Repealed: F. July 7, 2023; eff. July 27, 2023.

Ga. Comp. R. & Regs. r. 80-1-2-.05 Bank Service Contracts: Requirements of Third Party Service Providers {#sec-ga.-comp.-r.-regs.-r.-80-1-2-.05 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-2-.05}

(1) Each third party service provider that enters into a bank service contract with a state-chartered bank shall be subject to examination and regulation by the department as if the entity were a state financial institution, as authorized by O.C.G.A. § 7-1-72 .

(2) In the event that a third party service provider has been examined by a federal agency that is a member of the Federal Financial Institutions Examination Council ("FFIEC"), or any successor entity, in the previous twenty-four (24) months and the department is provided a copy of the examination, the department shall accept the results of such examination in lieu of conducting its own examination. However, nothing contained herein, shall be construed as limiting or otherwise restricting the department from participating in such examination.

History

Authority: O.C.G.A. § 7-1-61
History. Original Rule entitled "Bank Service Contracts" adopted. F. Nov. 7, 1995; eff. Nov. 27, 1995.
Amended: Rule retitled "Bank and Credit Union Service Contracts: Requirements of Providers." F. July 28, 2003; eff. August 17, 2003.
Amended: F. June 29, 2017; eff. July 19, 2017.
Amended: New title, "Bank Service Contracts: Requirements of Third Party Service Providers." F. July 7, 2023; eff. July 27, 2023.

Ga. Comp. R. & Regs. r. 80-1-2-.06 Bank Service Contracts {#sec-ga.-comp.-r.-regs.-r.-80-1-2-.06 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-2-.06}

(1) If a state-chartered bank is required to disclose a bank service contract to the Federal Deposit Insurance Corporation or the Board of Governors of the Federal Reserve System, a duplicate of such disclosure will simultaneously be submitted to the Department.

(2) A state-chartered bank entering into a bank service contract with a third party service provider must maintain the following information on file at the bank and shall not execute a contract with a third party service provider unless this information has been obtained.

(a) A copy of the contract under which the services are provided;

(b) A schedule of fees to be charged for each type of service to be performed;

The records of the bank for which the services are to be performed will be subject to examination and regulation by the department as if the records were maintained by the bank on its own premises,
The records of the bank in the service provider's possession shall be available to examiners promptly upon receipt of notice; and
The department shall have the authority to periodically review the internal routine and controls of the servicers to ascertain that the operations are being conducted in a sound manner in keeping with generally accepted banking procedures and requirements;

(d) A listing of all reports, and printouts which the third party service provider is offering the bank and the time required, after receipt of notice of examination, to provide those reports or information in readable form to the examiners;

(e) Evidence of financial stability, to include a copy of the third party service provider's most recent audit and financial statement, both of which should be aged no more than 18 months; and

(f) Biographical information on key officers may be desirable where a provider is not a publicly traded company.

(3) A state-chartered bank contracting with a third party service provider must employ good faith efforts to monitor the financial condition of the service provider and must notify the department immediately when it discovers or suspects that the servicer is insolvent or has suffered significant financial losses that threaten the continuing viability of the third party service provider.

History

Authority: O.C.G.A. §§ 7-1-61, 7-1-612
History. Original Rule entitled "Application for Permission to Perform Indirect Bank Services" adopted. F. Nov. 7, 1995; eff. Nov. 27, 1995.
Amended: F. Dec. 18, 2000; eff. Jan. 7, 2001.
Amended: Rule retitled "Contracts for Direct or Indirect Bank Services." F. July 28, 2003; eff. August 17, 2003.
Amended: New title, "Bank Service Contracts." F. July 7, 2023; eff. July 27, 2023.

Ga. Comp. R. & Regs. r. 80-1-2-.07 Reserved {#sec-ga.-comp.-r.-regs.-r.-80-1-2-.07 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-2-.07}

History

Authority: O.C.G.A. Sec. 7-1-61
History. Original Rule entitled "Contracting to Perform or Have Performed Indirect Bank Services" adopted. F. Nov. 7, 1995; eff. Nov. 27, 1995.
Repealed. Rule reserved. F. July 28, 2003; eff. August 17, 2003.

Ga. Comp. R. & Regs. r. 80-1-2-.08 Repealed {#sec-ga.-comp.-r.-regs.-r.-80-1-2-.08 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-2-.08}

History

Authority: O.C.G.A. § 7-1-61
History. Original Rule entitled "Severability" adopted. F. Nov. 7, 1995; eff. Nov. 27, 1995.
Repealed: F. July 7, 2023; eff. July 27, 2023.

Ga. Comp. R. & Regs. r. 80-1-2-.09 Debt Cancellation Contracts and Debt Suspension Agreements {#sec-ga.-comp.-r.-regs.-r.-80-1-2-.09 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-2-.09}

(1) State chartered banks may offer Debt Cancellation Contracts and Debt Suspension Agreements to customers, subject to this rule and policies and procedures of the Department. Policies of the Department include requirements for disclosures and certain prohibited practices. Banks are expected to comply with all these requirements. Such products will not be considered insurance products in this state when offered by banks.

(2) Definitions and Explanation:

(a) A "Debt Cancellation Contract" (DCC) is a contractual agreement modifying loan terms that is linked to a bank's extension of credit, under which the bank agrees to cancel all or part of a customer's obligation to repay an extension of credit from that bank upon the occurrence of a specified event.

(b) A "Debt Suspension Agreement" (DSA) is a contractual agreement that modifies loan terms and that is linked to an extension of credit, wherein the bank agrees to suspend all or part of a customer's obligation to repay an extension of credit upon the occurrence of some specified event.

(c) Typically these products are tied to the life, injury or disability of the borrower, although some products are based on the occurrence of some other specified event, such as termination of employment.

(d) Fees are assessed to the borrower for the ability to cancel or suspend loan payments on the loan, in accordance with the terms of the agreement.

(e) To "underwrite" in the context of this rule means to directly provide for any losses resulting from the operation of the product.

(3) State chartered banks desiring to offer DCC or DSA products where the bank is not underwriting the product shall provide a letter form notification to the Department. The bank must keep on file the following information, which must be obtained before execution of a contract:

(a) A listing of the types of contracts offered and the underwriting standards for each product;

(b) A copy of the written policies and procedures developed regarding administration of debt cancellation or debt suspension products and their compliance with Department policies;

(c) Identification of any vendor or third party service provider used in conjunction with the product offerings, including a list of the products and services being provided (see also Rule 80-1-2-.06 for contracting with third parties);

(d) A copy of the bank's plan demonstrating the ability to administer claims;

(e) An analysis of the bank's risk evaluation and mitigation procedures, including any plans to obtain insurance coverage to fully or partially indemnify itself for losses resulting from the operation of the DCC or DSA product; and

(f) An analysis of the expected impact on bank staffing.

(4) If a bank intends to underwrite any part of the DCC or DSA, the following information must also be submitted to the Department in the form of a letter application. No underwriting will be permitted until such approval is granted.

(a) Analysis of management expertise, based on education and experience, in the areas of product design, underwriting, actuarial analysis, claims processing and risk reserving and accounting practices to support the ability to provide these functions in-house.

(b) An explanation of the risk management techniques the bank will undertake, including product design criteria, underwriting procedures, limitations and conditions on DCC or DSA products, and other risk mitigation procedures in order to limit risk exposure to the bank.

(c) A well-documented analysis of risk of the products being proposed, including the risks posed by catastrophic events that could result in unusually high claims upon the bank.

(d) An outline of the proposed practices for properly reserving for risks related to these products based on industry practices and Generally Accepted Accounting Principles.

(e) An analysis of the bank to support that the bank has the proper financial position, cash flow performance and capital position to sustain continued operations in the event of an unusually high claims event.

(5) State chartered banks desiring to offer DCC or DSA products where third party service providers will underwrite the products or will administer any part of the program shall provide the letter form notification described in this rule. In addition to any requirements of Rule Chapter 80-1-2 governing service providers, the following information shall also be obtained by the bank before any contract is executed, and such information will be kept on file at the bank:

(a) A description of the experience of the third party service provider in offering such DCC or DSA products;

(b) An analysis of the financial stability of the third party service provider, including but not limited to: operating or cash flow statements, analysis of capital and reserves and the use of external company ratings performed by a nationally recognized rating service;

(c) In lieu of (a) and (b) of this paragraph, the bank may provide proof of the third party's appropriate licensure with the state of Georgia Department of Insurance.

(d) A copy of the standard form contract to be utilized. The contract must contain the third party service provider's assurance that:

It will make its books and records available for examination by the Department; and
The Department shall have the authority to periodically review the internal routine and controls of the service provider to ascertain that the operations are being conducted in a sound manner in keeping with industry practices and Generally Accepted Accounting Principles.

(e) A schedule of fees to be charged for each product or service performed; and

(f) A listing of reports, printouts, schedules or program that will be provided by the third party service provider to the bank to permit management, auditors, examiners and other interested parties to monitor the services provided.

History

Authority: O.C.G.A. § 7-1-61
History. Original Rule entitled "Debt Cancellation Contracts and Debt Suspension Agreements" adopted. F. July 28, 2003; eff. August 17, 2003.
Amended: F. July 7, 2022; eff. July 27, 2022.

Subject 80-1-3 Books and Records

Ga. Comp. R. & Regs. r. 80-1-3-.01 Minimum Requirements for Books and Records {#sec-ga.-comp.-r.-regs.-r.-80-1-3-.01 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-3-.01}

(1) Each bank must maintain for each business day a Daily Statement properly supported by a General Ledger showing daily activity to each asset, liability, and capital account. A "business day" shall be any day during which the main office of the bank shall be open for the purpose of conducting both a paying and receiving and a lending business; provided, however, a bank may defer business conducted on Saturday until the next business day. There shall be no fewer than five "business days" in each calendar week less any legal holidays actually observed during such week and less any Saturday for which business is properly deferred. The following subsidiary ledgers must be maintained and must be balanced to the controlling amount in the General Ledger at least monthly:

(a) Investment Register - containing a record of all stocks, bonds, certificates of deposit, and other fixed maturity investments purchased showing date of transaction, proper name of the investment, interest rate, maturity date, par value, purchase price, schedule of amortization of premium or accretion of discount taken, book value, pledge status, safekeeping location, and income receipt.

(b) Liability Ledger - containing separate listings for the direct and indirect liabilities or obligations of each of the bank's borrowing customers, excluding liabilities for overdrafts, cash items, and loans repayable in regular installments due more frequently than quarterly.

(c) Installment Loan Ledger - although part of the liability ledger, a bank may elect to maintain installment loans separately from other direct loans of a borrower and not include them on the Liability Ledger above. In this event, they may be maintained in a separate ledger with payments being posted manually or electronically. The notes or payment record may be maintained in any order, e.g. alphabetical, numerical, class of loans desired by management, except that where they are not maintained alphabetically, an alphabetical cross-reference file must be maintained summarizing the notes of each borrower.

(d) Cash Items Register - a listing daily of all cash items held by a bank must be maintained which shows the maker of the item, last endorser, if any, date acquired by the bank, amount of the item, and reason held. The register may be maintained on a decentralized basis at each of the bank's operating offices. The current register shall be reviewed by the Board of Directors at least monthly. For purposes of this Rule, Cash Items shall include any item received by a bank and paid but for which reimbursement by the maker or endorser is not made before the end of the next business day following the date in which the item is received, except such items as are customarily held by the bank for settlement with its customer, whether maker or endorser on the item, not less frequently than weekly. Where the item is held beyond the regular settlement date, it shall be considered as a Cash Item within the definition of this Rule. In addition to the foregoing, Cash Items and the register thereof shall include such other items as the Board of Directors shall from time to time determine.

(e) Deposit Ledgers - separate deposit ledgers must be maintained for each General Ledger segregation of deposits and each ledger must contain a continuing itemized record of all deposits and withdrawals. Deposits will be segregated into no fewer than the following categories: Demand Deposits, Savings Deposits, Overdrawn Accounts, Open Accounts, Certificates of Deposit, Official Checks. In lieu of the requirement for a register of outstanding Certificates of Deposit and Official Checks, copies of the outstanding obligations may be maintained in numerical order.

(f) Income and Expense Registers - a detailed record of Income and Expenses must be maintained.

(g) Overdrafts - a record of all overdrawn deposit accounts shall be maintained. Such record shall contain the name of the account holder, the amount of the overdraft, and date the overdraft originated. The most current record shall be approved by the Board of Directors or Loan Committee at least monthly, and such approval shall be recorded in the minutes of the meeting at which the action was taken. Overdrafts of less than $1,000, other than overdrafts on the accounts of officers and directors, may be aggregated and reported in lump sum.

(h) Charged Off Assets - all charge-offs must be approved by the Loan Committee, in the case of loans, or Board of Directors and such approval recorded in the minute book. A record of all charge-offs and recoveries thereon must be maintained.

(i) A register must be maintained of all items held for safekeeping by a bank for its customers other than items maintained in a safe deposit box under the sole control of the customer. The register should describe the item fully, show the name of the owner, date received, and number of receipts given.

(j) Each bank shall maintain a reconcilement book on each of its correspondent bank accounts with other banks, and reconcilements of each account shall be made at least monthly and recorded in the reconcilement book.

(2) Where a bank has a statutory capital base of $5,000,000 or more, review by the Board of Directors as required in paragraphs (1)(d), (1)(g), and (1)(h) above may be delegated to a specific officer or department of the bank, where such delegation is recorded in the minutes of the Board of Directors. A properly constituted Loan Committee may perform this function for the full Board of Directors regardless of the size of the bank.

History

Authority: Ga. L. 1974, pp. 733, 849; Ga. L. 1983, Act No. 255, effective March 16, 1983
History. Original Rule entitled "Books and Records" was filed and effective on June 30, 1965.
Amended: Rule repealed and a new Rule entitled "Minimum Requirements for Books and Records" adopted. Filed April 11, 1973; effective May 1, 1973.
Amended: Filed August 28, 1975; effective September 17, 1975.
Amended: Filed July 13, 1981; effective August 2, 1981.
Amended: Filed August 17, 1983: effective September 6, 1983.
Amended: Filed June 28, 1984; effective August 1, 1984, as specified by the Agency.
Amended: F. Aug. 26, 1997; eff. Sept. 15, 1997.
Amended: F. June 29, 2017; eff. July 19, 2017.

Ga. Comp. R. & Regs. r. 80-1-3-.02 Minimum Records Retention Periods {#sec-ga.-comp.-r.-regs.-r.-80-1-3-.02 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-3-.02}

Retention of records by state chartered banks shall be in accordance with the provisions of Regulation 80-10-1.

History

Authority: Ga. L. 1974, pp. 733, 849
History. Original Rule entitled "Minimum Records Retention Periods" was filed on April 11, 1973; effective May 1, 1973.
Amended: Filed August 28, 1975; effective September 17, 1975.
Amended: Filed July 13, 1981; effective August 2, 1981.
Repealed: New Rule of same title adopted. F. Oct. 12, 1989; eff. Nov. 1, 1989.

Ga. Comp. R. & Regs. r. 80-1-3-.03 Notice of Unauthorized Access to Customer Information {#sec-ga.-comp.-r.-regs.-r.-80-1-3-.03 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-3-.03}

Pursuant to 15 USC § 6801 et seq., 12 CFR Part 364, and 12 CFR Part 208, banks are required to develop and implement a response program that will be utilized in the event unauthorized access to customer information has taken place. Customer information is any record containing nonpublic information about a customer, whether in paper, electronic, or other form maintained by or on behalf of a bank. Federal law and regulations require disclosure to federal regulators of unauthorized access of customer information in certain circumstances. If disclosure of such unauthorized access is required under federal law, then a duplicate of such disclosure will simultaneously be submitted to the Department.

History

Authority: O.C.G.A. § 7-1-61
History. Original Rule entitled "Notice of Unauthorized Access to Customer Information" adopted. F. July 9, 2019; eff. July 29, 2019.

Ga. Comp. R. & Regs. r. 80-1-3-.04 Notification of Computer Security Incident {#sec-ga.-comp.-r.-regs.-r.-80-1-3-.04 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-3-.04}

Pursuant to 12 C.F.R. Part 304 and 12 CFR Part 225 banks and bank holding companies are required to notify the appropriate federal regulator no later than 36 hours after the financial institution determinates that a computer security incident, which rises to the level of a notification incident, has occurred. A computer security incident is an occurrence that results in actual harm to the confidentiality, integrity, or availability of an information system or the information that the system processes, stores, or transmits. If notification of a computer security incident is required to be provided under federal law, then a duplicate of such notification will simultaneously be submitted to the Department.

History

Authority: O.C.G.A. § 7-1-61
History. Original Rule entitled "Applicability of Regulation to National Banks and Others" was filed on April 11, 1973; effective May 1, 1973.
Amended: Filed August 28, 1975: effective September 17, 1975.
Amended: Rule repealed and a new Rule of the same title adopted. Filed July 13, 1981; effective August 2, 1981.
Repealed: F. Oct. 12, 1989; eff. Nov. 1, 1989.
Adopted: New Rule entitled "Notification of Computer Security Incident." F. July 7, 2022; eff. July 27, 2022.

Ga. Comp. R. & Regs. r. 80-1-3-.05 Minimum Requirements for Fidelity Coverage {#sec-ga.-comp.-r.-regs.-r.-80-1-3-.05 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-3-.05}

(1) The Board of Directors of each bank shall review the fidelity insurance coverage annually in order to ascertain its adequacy in relation to the exposure to theft, defalcation, or other similar actions by officers, directors, and employees and to any minimum requirements that may be fixed from time to time by the Commissioner. In evaluating the adequacy and scope of the fidelity coverage, the Board of Directors shall consider whether the coverage should include agents and independent contractors of the bank.

(2) Every bank shall obtain fidelity coverage, such as a fidelity bond, to provide protection against the potential risks facing the bank as prescribed in the bank's bylaws, applicable statutes, and rules and regulations of the Department.

(3) The Commissioner may require additional coverage for any bank when, in his or her opinion, the fidelity coverage in force is insufficient to provide adequate fidelity coverage, and the bank shall obtain such additional coverage within thirty (30) days after the date of written notice from the Commissioner of the requirement to obtain such additional coverage. If the bank is unable to obtain such additional coverage within the thirty (30) day timeframe, the bank shall provide the Department with detailed information documenting the commercially reasonable efforts undertaken by the bank during the timeframe and the Department shall determine the amount of additional time needed for the bank to obtain the required coverage.

History

Authority: O.C.G.A. §§ 7-1-61, 7-1-489
History. Original Rule entitled "Reimbursement for Cost of Production of Records" was filed on August 17, 1983; effective September 6, 1983.
Repealed: F. Oct. 12, 1989; eff. Nov. 1, 1989.
Adopted: New Rule entitled "Minimum Requirements for Fidelity Coverage." F. June 18, 2025; eff. June 8, 2025.

Subject 80-1-4 Investment Securities

Ga. Comp. R. & Regs. r. 80-1-4-.01 Permissible Investments and Limitations {#sec-ga.-comp.-r.-regs.-r.-80-1-4-.01 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-4-.01}

Subject to such further restrictions and approvals as its board of directors may set forth in its investment policy, a bank may purchase, sell, and hold securities, as set forth in the following:

(1) Debt Obligations.

(a) Obligations of the United States Government or Agencies of the United States Government. The following may be held without limitation:

Securities issued by the United States government or an agency of the United States government;
Securities guaranteed as to principal and interest by the United States government or an agency of the United States government;
Securities issued under the U.S. Treasury's Separate Trading of Registered Interest and Principal (STRIP's) program, which are offered in book entry form and which are direct obligations of the U.S. Government, as authorized by Subtitle III, Chapter 31 of Title 31 U.S.C.; and
Securities which are pre-refunded, with the redemption proceeds invested in securities issued by the United States Government or an Agency of the United States Government.

(b) Obligations of a State or Territorial Government of the United States or Agencies of State or Territorial Governments. The following may be held without limitation:

General obligations of any state or territorial government of the United States or any agency of such governments;
Securities guaranteed as to principal and interest by such state or territorial governments or any agency thereof; and
Securities which are pre-refunded, with the redemption proceeds invested in securities issued by state or territorial governments or agencies thereof.

The general obligations of counties, districts, and municipalities of any state or territorial government of the United States which is authorized to levy taxes may be held without limit.
Securities issued by counties, districts, and municipalities of any state or territorial government of the United States which are secured by a pledge or assignment of tax receipts sufficient to pay the principal and interest of such securities as they become due may be held without limit.
Revenue obligations of counties, districts, and municipalities of any state or territorial government of the United States authorized to establish utility fees, public transportation usage fees or public use fees where such levies or fees are pledged to and are sufficient to pay the principal and interest of the securities as they become due may be held without limit.
In those instances where the repayment of revenue obligations is dependent upon rentals or other fees payable to a political subdivision located within the United States by a non-governmental unit, such as in the case of industrial revenue bonds, the obligor shall be deemed to be the non-governmental unit responsible for the payment of such rentals or other fees and any guarantor of such payments. Investment in such securities is limited to fifteen (15) percent of the bank's statutory capital base.
Other securities issued by political subdivisions located within the United States rated in the four highest rating categories by a nationally recognized rating service may be held in an amount up to fifteen (15) percent of a bank's statutory capital base.

(d) Corporate Debt Securities. Corporate debt securities may be purchased which are:

Rated in the four highest rating categories by a nationally recognized rating service;
Readily salable in an established market with reasonable promptness at a price which corresponds to its fair value;
Denominated in U.S. dollars; and
With respect to banks having a statutory capital of less than $20,000,000, such securities must mature within 15 years. A bank's investment in corporate debt securities is limited to fifteen (15) percent of the bank's statutory capital base per obligor. A bank's aggregate investment in corporate debt securities shall not exceed one hundred (100) percent of the bank's statutory capital base.

(e) Debt Securities Taken in Conformity with Lending Policies. Debt obligations shall not be considered investments within the meaning of this regulation where they:

Are taken in conformity with the bank's lending policies;
Are included in determining the outstanding credit for purposes of ascertaining compliance with the bank's secured and unsecured loan limitations in O.C.G.A. § 7-1-285 ; and
With respect only to banks having a statutory capital base of less than $20,000,000, mature within 15 years, and are treated by the bank in all other respects as loans. The debt obligations that qualify for this exception must be combined with other investment securities or other obligations to the same entity. This aggregation must not exceed the twenty-five (25) percent limitation on obligations to any one person in O.C.G.A. § 7-1-285.

(2) Equity Securities. Except as allowed by O.C.G.A. § 7-1-288, or in this regulation, a bank may not engage in any transaction with respect to shares of stock or other capital securities of any corporation.

(3) Investment Funds. A state-chartered bank may invest up to fifteen (15) percent of its statutory capital base in securities of, or other interests in, any open-end or closed-end management type investment fund or investment trust which is registered under the Investment Company Act of 1940, subject to the following additional conditions.

(a) The investment portfolio of such investment fund or investment trust shall be limited to those securities in which banks or trust companies are permitted to invest directly under this rule and Title 7 of the Official Code of Georgia; and

(b) The investment fund or trust shall not:

Except to the extent authorized in subparagraph (1)(a)3. of this rule, acquire or hold investments in the form of stripped or detached interest obligations;
Engage in the purchase or sale of interest rate futures contracts;
Purchase securities on margin, make short sales of securities or maintain a short position; or
Otherwise engage in futures, forwards or options transactions, except that forward commitments may be entered into for the express purpose of acquiring securities on a when-issued basis.

Thirty (30) percent of the bank's statutory capital base per fund/trust family or sponsor; and
Sixty (60) percent of the bank's statutory capital base for all funds combined.

(d) An aggregate limitation of one hundred twenty (120) percent of the bank's statutory capital base shall be allowed for all funds combined if the funds or trusts:

Are managed so as to maintain the fund or trust shares at a constant net asset value;
Are no-load; and
Are rated in the highest rating category by a nationally recognized rating service.

(4) Asset-Backed Securities. A bank may purchase asset-backed securities repayable in both interest and principal which are issued under any of the following:

(a) Governmentally sponsored securities which are fully collateralized by obligations fully guaranteed as to principal and interest by a governmental entity to the same extent as direct obligations of the governmental entity which is the guarantor;

(b) Type IV securities as defined by 12 CFR § 1.2 subject to the limitations and restrictions set forth in federal law including, but not limited to, 12 CFR §§ 1.2 and 1.3 ; or

(c) Other private label securities in amounts which do not exceed twenty-five (25) percent of the bank's statutory capital base for each issuer, provided the issue:

Is registered with the Securities and Exchange Commission;
Is collateralized by assets which could be owned directly by the bank and the investing bank has analyzed and understands the underlying collateral characteristics of the investment; and
Is investment quality or the credit equivalent of investment quality. Investment quality means that a rating in one of the four highest categories has been assigned to the securities by a nationally recognized rating service and, as such, are not predominantly speculative in nature. If the securities are not rated by a nationally recognized rating service, then credit equivalency shall be determined by the methods in subsection (e) of this rule.

(d) Aggregate investment in asset backed securities under subsection (c) by all issuers shall not exceed fifty (50) percent of the bank's statutory capital base unless approved by the Department.

(e) Before the purchase of any asset-backed securities, the investing bank shall perform a due diligence suitability analysis to determine whether the asset-backed securities are suitable for purchase relative to the bank's asset liability position, sensitivity to market risk, and its liquidity exposure. Further, before the purchase of any asset-backed securities under subsection (c), the investing bank shall include in the due diligence suitability analysis an evaluation of whether the asset-backed securities are suitable for purchase relative to the bank's tolerance for credit risk and obtain a third-party pricing analysis that is independent of the seller or counter-party. A periodic update of the suitability analysis shall be performed by the bank at least as frequently as annually during the term of the investment. The initial and subsequent documentation of the suitability analysis shall be in written form and maintained in the bank's files.

(5) Interest-Only ("IO") Securities.

(a) Nothing contained herein shall permit the purchase of investments in the form of stripped or detached IO obligations. An exception to this rule is that securities issued under the U.S. Treasury's Separate Trading of Registered Interest and Principal (STRIP's) program, which are offered in book entry form and which are direct obligations of the U.S. Government, as authorized by Subtitle III, Chapter 31 of Title 31 USC, may be purchased without limitation.

(b) Purchasing or trading any other type of IO securities may receive prior written approval from the Department for institutions demonstrating technical expertise and policies sufficient to promote safe and sound use of such investments as part of prudent investment strategies.

(6) Futures, Forwards, Option Contracts and Interest Rate Swaps.

(a) Futures, forwards, option contracts, interest rate swaps, and direct and indirect investments associated with any security which otherwise constitutes a permissible investment under provisions of this rule may be approved in writing by the Department for banks demonstrating technical expertise and policies sufficient to promote safe and sound use of such investments as part of prudent investment strategies.

(b) Notwithstanding the limitation in subparagraph (6)(a), a bank may invest in derivative instruments, including forwards and interest rate swaps, without the approval of the Department so long as the investment is solely for the purpose of managing interest rate risk. Such investment must be denominated in U.S. dollars, have a contract maturity of fifteen (15) years or less, and be based on domestic interest rates or the Secured Overnight Financing Rate (SOFR), or similar replacement rate for the U.S. dollar-denominated London Interbank Offered Rate (LIBOR). A bank must adhere to safe and sound banking practices in making such investments.

(7) Trust Preferred Securities. Trust preferred securities, generally, may be defined as issues of cumulative preferred securities, containing characteristics of both debt and equity securities, where the issuer is normally a business trust formed by a corporate issuer. The corporate issuer issues debt to the trust in the form of deeply subordinated debentures. The securities represent undivided beneficial interests in the assets of the issuer trust, and distributions by the issuer trust are guaranteed by the corporate issuer to the extent of available funds of the issuer trust. The trust preferred securities may or may not be rated, but in any event must be scrutinized under the suitability analysis in this rule as if they were a loan being underwritten by the purchasing bank. Trust preferred securities are authorized investments for a state bank subject to the terms and conditions contained in this paragraph 7. A bank's investment in a closed or open-end investment fund, consisting of trust preferred securities, shall be subject to the terms and conditions contained in Rule 80-1-4-.01, paragraph 3. entitled "Investment Funds". A security backed by trust preferred securities shall be deemed an asset-backed security and shall be subject to the terms and conditions contained in Rule 80-1-4-.01, paragraph 4. entitled "Asset-Backed Securities".

(a) The bank's investment in each corporate issuer of trust preferred securities, that is, in each entity that controls an issuer trust (other than in a fiduciary capacity), shall not exceed fifteen (15) percent of the bank's statutory capital base.

(b) The bank's aggregate investment in trust preferred securities shall not exceed the bank's policy limits or one hundred (100) percent of the bank's statutory capital base, whichever is less.

(c) The issuance of the trust preferred securities shall be registered under the Securities Act of 1933, as amended, shall be eligible for resale pursuant to Securities and Exchange Commission Rule 144A, or the securities shall be capable of being sold with reasonable promptness at a price which corresponds to their fair value. As to this requirement, if an issuance is not registered, eligible for resale, or readily marketable, it must meet a suitability analysis test as provided in (e) of this rule.

(d) The securities shall be of investment quality or the credit equivalent of investment quality. Credit equivalency shall be determined by the methods in subparagraph (e) of this rule. Investment quality means that a rating in one of the four highest categories has been assigned to the securities by a nationally recognized rating service and, as such, are not predominantly speculative in nature.

(e) Before the purchase of any trust preferred securities, the investing bank shall perform a due diligence suitability analysis to determine whether the trust preferred securities are suitable for purchase relative to the bank's tolerance for credit risk, asset liability position, sensitivity to market risk, and its liquidity exposure. Such analysis shall include, at a minimum, the following:

A complete credit analysis, including cash flow projections, sufficient to determine that the issuer is creditworthy and thus has the ability to meet the debt repayment schedule;
A credit underwriting analysis sufficient to determine that the securities meet the credit underwriting criteria set forth by the bank's lending policies;
A marketability analysis, sufficient to determine whether or not the securities may be sold with reasonable promptness at a price corresponding to their fair value;
The documentation of the suitability analysis shall be in written form and maintained in the bank's files;
A periodic update of the suitability analysis shall be performed by the bank at least as frequently as annually during the term of the investment; and

(f) The bank shall obtain and monitor the securities' market values on an ongoing basis.

(g) The bank's written policies and procedures shall adequately address the various risks inherent in these securities including credit risk, price or market risk, interest rate risk, and liquidity risk.

(h) The bank shall notify the Department in writing of any investment in trust preferred securities where the issuer is not a bank or bank holding company as defined in O.C.G.A. § 7-1-605 .

(8) Tier 2 Subordinated Debt Securities. Tier 2 subordinated debt securities are subordinated notes issued by banks or bank holding companies, as defined in O.C.G.A. § 7-1-605, intended to qualify as Tier 2 capital under federal regulatory capital guidelines. The subordinated debt securities may or may not be rated, but in any event must be scrutinized under the suitability analysis in this rule as if they were a loan being underwritten by the purchasing bank. Tier 2 subordinated debt securities are authorized investments for a state bank subject to the terms and conditions contained in this paragraph. The permissibility of such investment may be determined pursuant to this paragraph or pursuant to any other paragraph or paragraphs of this rule to the extent the terms of such investment conform to such other paragraph or paragraphs.

(a) The bank's investment in each corporate issuer of Tier 2 subordinated debt securities shall not exceed fifteen (15) percent of the bank's statutory capital base. For purposes of determining compliance with this requirement, investments in Tier 2 subordinated debt securities issued by a bank shall be aggregated with securities issued by such bank's holding company.

(b) The bank's aggregate investment in Tier 2 subordinated debt securities shall not exceed the bank's policy limits or one hundred (100) percent of the bank's statutory capital base, whichever is less. For purposes of determining compliance, this aggregation requirement applies to all subordinated debt investments, whether purchased pursuant to this paragraph or any other paragraph of this rule.

(c) The issuance of the Tier 2 subordinated debt securities shall be registered under the Securities Act of 1933, as amended, shall be eligible for resale pursuant to Securities and Exchange Commission Rule 144A, or the securities shall be capable of being sold with reasonable promptness at a price which corresponds to their fair value as determined by the bank following due diligence. In the alternative, the issuance can satisfy the suitability analysis test as provided in subsection (e) of this rule.

(d) The securities shall be of investment quality or the credit equivalent of investment quality. Investment quality means that a rating in one of the four highest categories has been assigned to the securities by a nationally recognized rating service and, as such, are not predominantly speculative in nature. If the securities are not rated by a nationally recognized rating service, then credit equivalency shall be determined by the methods in subsection (e) of this rule.

(e) Before the purchase of any Tier 2 subordinated debt securities, the investing bank shall perform a due diligence suitability analysis to determine whether the Tier 2 subordinated debt securities are suitable for purchase relative to the bank's tolerance for credit risk, asset liability position, sensitivity to market risk, and its liquidity exposure. Such analysis shall include, at a minimum, the following:

A complete credit analysis, including pro forma cash flow analysis, sufficient to determine that the issuer is creditworthy and thus has the ability to meet the debt repayment schedule;
A marketability analysis, sufficient to determine whether or not the securities may be sold with reasonable promptness at a price corresponding to their fair value, which analysis may be supported by input from the placement agent for such securities;
The documentation of the suitability analysis shall be in written form and maintained in the bank's files; and
A periodic update of the suitability analysis shall be performed by the bank at least as frequently as annually during the term of the investment.

(f) The bank shall obtain and monitor the securities' market values on an ongoing basis.

(h) Subordinated notes issued by banks or bank holding companies, as defined in O.C.G.A. § 7-1-605 , shall not be deemed to be impermissible investments solely by virtue of the fact that the issuer has not obtained regulatory confirmation that proceeds from the issuance of the securities will qualify as Tier 2 capital.

(9) All Other Securities. A bank may invest in such other securities or funds as the Department may approve, upon a finding that the securities are marketable under ordinary circumstances, with reasonable promptness at a price which corresponds to their fair value, approval shall be in writing and subject to such limitations as the Department may specify. This requirement for departmental approval shall not apply where the statutory capital base of the purchasing bank exceeds $ 20,000,000. However, in such instances, such securities may be purchased only in an amount which does not exceed fifteen (15) percent of the bank's statutory capital base.

(10) Investments Authorized for National Banks. If an investment is not otherwise authorized by this Rule, a bank may invest in such investment securities as may be authorized for a national bank subject to the Department's prior approval which may be subject to conditions or limitations. Any such investment shall not exceed fifteen (15) percent of the bank's statutory capital base or such greater amount as approved by the Department in writing, which shall in no event exceed the amount authorized for a national bank.

(11) In the event a bank's investment in securities no longer conforms to this rule but conformed when the investment was originally made, the bank shall provide written notification to the Department regarding the nonconforming investment within 30 days of discovering the nonconforming investment or 120 days of the investment becoming nonconforming, whichever event occurs first. In the event a bank wishes to hold the nonconforming investment, the bank must submit a letter form application to the Department including the institution's current assessment of the condition of the nonconforming security and supporting documentation that details the cause of the deterioration, severity of the deterioration, and resulting accounting treatment by the institution. Upon review of the application, the Department may request additional information if it determines such additional information is necessary in order to fully and completely evaluate the application. After completion of its review, the Department shall either approve, conditionally or otherwise, or deny such application in writing.

(12) A bank may sell a nonconforming investment without Department authorization but only if it provides the Department with written notice no later than five (5) business days after the sale.

History

Authority: O.C.G.A. §§ 7-1-61, 7-1-288
History. Original Rule entitled "All Investment Securities Not Specifically Authorized by Statute" adopted. F. and eff. June 30, 1965.
Amended: F. Aug. 21, 1967; eff. Sept. 10, 1967.
Repealed: New Rule entitled "Other Approved Investment Securities" adopted. F. June 9, 1972; eff. June 29, 1972.
Repealed: New Rule entitled "Investment Securities" adopted. F. Aug. 28, 1975; eff. Sept. 17, 1975.
Amended: F. July 13, 1981; eff. August 2, 1981.
Amended: F. Aug. 17, 1983; eff. Sept. 6, 1983.
Repealed: New Rule of same title adopted. F. Oct. 12, 1989; eff. Nov. 1, 1989.
Amended: F. July 11, 1994; eff. July 31, 1994.
Amended: F. Aug. 26, 1997; eff. Sept. 15, 1997.
Amended: F. July 12, 1999; eff. August 1, 1999.
Amended: F. Dec. 18, 2000; eff. Jan. 7, 2001.
Repealed: New Rule entitled "Permissible Investments and Limitations" adopted. F. Oct. 22, 2001; eff. Nov. 11, 2001.
Amended: F. Aug. 15, 2007; eff. Sept. 4, 2007.
Amended: F. June 10, 2014; eff. June 30, 2014.
Amended: F. July 7, 2021; eff. July 27, 2021.
Amended: F. July 7, 2022; eff. July 27, 2022.
Amended: F. July 7, 2023; eff. July 27, 2023.
Amended: F. July 12, 2024; eff. Aug. 1, 2024.
Amended: F. June 18, 2025; eff. July 8, 2025.

Ga. Comp. R. & Regs. r. 80-1-4-.02 Securities Underwriting {#sec-ga.-comp.-r.-regs.-r.-80-1-4-.02 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-4-.02}

(1) A bank with statutory capital base of less than $20,000,000:

(a) Shall not underwrite or otherwise participate as principal in the marketing of securities except to the extent authorized by law or regulation and except for the account of and upon specific instructions from its customer.

(b) Such bank may, with the permission of the department, underwrite or otherwise participate in the marketing of obligations (including limited obligation bonds, revenue bonds, and obligations that satisfy the requirements of Section 142(b)(1) of the Internal Revenue Code of 1986) issued by or on behalf of any state or political subdivision of a state, including any municipal corporate instrumentality of one or more states, or any public agency or authority of any state or political subdivision of a state ("certain municipal bonds").

(2) A bank with a statutory capital based of $20,000,000 or greater:

(a) May underwrite or otherwise participate in the marketing of any securities which such banks could purchase for their own account, in addition to the certain municipal bonds described in subsection (1)(b); but

(b) May not underwrite open-end funds described in section (3) of Rule 80-1-4-.01 .

(3) All underwriting or marketing of securities shall be subject to the following conditions:

(a) Accounting and other records of trading in such securities are maintained separate and apart from accounting and other records relating to purchases of securities for the bank's own account;

(b) The board of directors of the bank must adopt operating policies which are reviewed at least anually regarding the types and quality of securities to be traded, holding periods for securities in inventory, limitations on the amount of securities to be carried in the name of any single obligor, and guidelines relative to disposition of securities subject to adverse market changes; and

(c) Credit memoranda or prospectuses and independent audit reports covering the three (3) years immediately preceding the date of the most recent underwriting are maintained.

(4) Underwriting and marketing of securities are activities also subject to federal law and regulation.

History

Authority: O.C.G.A. Sec. 7-1-61
History. Original Rule entitled "Prohibitions" adopted. F. and eff. June 30, 1965.
Repealed: New Rule, same title adopted. F. June 9, 1972; eff. June 29, 1972.
Repealed: F. Aug. 28, 1975; eff. Sept. 17, 1975.
Amended: New Rule entitled "Accounting and Record Keeping" adopted. F. Oct. 12, 1989; eff. Nov. 1, 1989.
Amended: F. July 11, 1994; eff. July 31, 1994.
Repealed: New Rule entitled "Securities Underwriting" adopted. F. Oct. 22, 2001; eff. Nov. 11, 2001.

Ga. Comp. R. & Regs. r. 80-1-4-.03 Accounting and Record Keeping for Investments {#sec-ga.-comp.-r.-regs.-r.-80-1-4-.03 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-4-.03}

(1) Investment securities transactions shall be accounted for in accordance with generally accepted accounting principles.

(2) Banks shall maintain documentation sufficient to identify adequately the nature of all securities owned. For all securities other than direct investment in government bonds, notes, or debentures, documentation may include annual reports, offering circulars, credit analyses published by nationally recognized rating firms, or inhouse analyses, reflecting an evaluation of the degree of risk in regard to liquidity, marketability, price volatility, and eligibility for pledging.

(3) Investments in the form of "Zero Coupon" obligations shall be recorded at cost plus accretion to maturity over the life of the obligations. Legal limitations applicable to such securities shall be measured against the actual cost of the security. Provided, however, except in the case of U.S. Government issues, to the extent that the cash investment plus accretions of income earned, but not collected, exceed the legal limitation on any zero coupon security, such amount shall be set aside into a capital reserve and excluded in considering capital adequacy.

History

Authority: O.C.G.A. Sec. 7-1-61
History. Original Rule entitled "Basis for Determining Legal Limits of Any One Obligor Under the Provisions of Section 23 (13-2023) Article 19 of the Banking Law" adopted. F. and eff. June 30, 1965.
Repealed: New Rule entitled "Legal Investment Securities for State Banks" adopted. F. June 9, 1972; eff. June 29, 1972.
Repealed: F. Aug. 28, 1975; eff. Sept. 17, 1975.
Amended: New Rule entitled "Custody and Safekeeping" adopted. F. Oct. 12, 1989; eff. Nov. 1, 1989.
Amended: F. July 11, 1994; eff. July 31, 1994.
Repealed: New Rule entitled "Accounting and Record Keeping for Investments" adopted. F. Oct. 22, 2001; eff. Nov. 11, 2001.

Ga. Comp. R. & Regs. r. 80-1-4-.04 Custody and Safekeeping {#sec-ga.-comp.-r.-regs.-r.-80-1-4-.04 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-4-.04}

(1) Securities may be held in physical or book entry form.

(2) Physical possession of securities shall be maintained:

(a) In the vault of the investing bank;

(b) In safekeeping at any:

FDIC-insured, correspondent bank or trust company;
Federal Reserve Bank or Federal Home Loan Bank;
Broker-dealer insured under the Securities Investors Protection Act provided the market value of such securities does not exceed $500,000; or

History

Authority: O.C.G.A. Sec. 7-1-61
History. Original Rule entitled "Investment in All of Capital Stock of Subsidiary Corporations" adopted. F. and eff. June 30, 1965.
Repealed: New Rule entitled "Applications for Rulings" adopted. F. June 9, 1972; eff. June 29, 1972.
Repealed: F. Aug. 28, 1975; eff. Sept. 17, 1975.
Amended: New Rule entitled "Custody and Safekeeping" adopted. F. Oct. 22, 2001; eff. Nov. 11, 2001.

Ga. Comp. R. & Regs. r. 80-1-4-.05 Repealed {#sec-ga.-comp.-r.-regs.-r.-80-1-4-.05 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-4-.05}

History

Authority: Ga. L. 1919, p. 144
History. Original Rule entitled "Unauthorized Investments" was filed and effective on June 30, 1965.
Amended: Rule repealed and a new Rule entitled "Obligations of the State of Georgia Defined" adopted. Filed June 9, 1972; effective June 29, 1972.
Amended: Rule repealed. Filed August 28, 1975; effective September 17, 1975.

Ga. Comp. R. & Regs. r. 80-1-4-.06 Repealed {#sec-ga.-comp.-r.-regs.-r.-80-1-4-.06 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-4-.06}

History

Authority: Ga. L. 1919, p. 144
History. Original Rule entitled "Investment Securities Exempt from All Limitations" was filed and effective on June 30, 1965.
Amended: Rule repealed and a new Rule entitled "Basis of Determining Amounts Invested for Purposes of Limitations" adopted. Filed June 9, 1972; effective June 29, 1972.
Amended: Rule repealed. Filed August 28, 1975; effective September 17, 1975.

Ga. Comp. R. & Regs. r. 80-1-4-.07 Repealed {#sec-ga.-comp.-r.-regs.-r.-80-1-4-.07 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-4-.07}

History

Authority: Ga. L. 1919, p. 144
History. Original Rule entitled "Disposition of Nonconforming Acquisitions" was filed on June 9, 1972; effective June 29, 1972.
Amended: Rule repealed. Filed August 28, 1975; effective September 17, 1975.

Subject 80-1-5 Loans and Discounts

Ga. Comp. R. & Regs. r. 80-1-5-.01 Loans Generally, Interpretations and Rulings {#sec-ga.-comp.-r.-regs.-r.-80-1-5-.01 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-5-.01}

(1) "Indirect" loans as used in Code Section 7-1-285 shall mean loans made for the substantial benefit of a third party where repayment of the loan is dependent on activities of the third party rather than solely dependent on the resources of the borrower and subject to the provisions of Rule 80-1-5-.11 .

(2) Loans extended to any Industrial Development Authority domiciled in Georgia which are dependent upon revenues obtained under an assigned lease contract naming the Authority as lessor shall be considered as loans to the lessee in calculating legal loan limitations.

(3) Loans by a bank to any wholly-owned subsidiary of the bank, which subsidiary is located within an approved office of the bank and which has agreed to abide by all laws, rules and regulations applicable to the bank shall be exempt from the twenty-five (25) percent maximum lending limit of the bank. In addition, to the extent allowed by other applicable law and with the prior written approval of the Department, this exemption from the twenty-five (25) percent maximum lending limit may be extended to loans from a bank to a wholly owned subsidiary of an affiliated bank.

(4) In determining amounts loaned, all amounts guaranteed or insured by any instrumentality of the United States government shall be deducted to the extent of the guaranty or insurance coverage. Immediate and deferred participations on loans by an instrumentality of the United States government shall also be excluded. Where the source of repayment of a loan, i.e. lease payments, is guaranteed by an instrumentality of the United States government and such guarantee is assignable and has been assigned to the bank, such loan may be excluded to the extent of the guarantee.

(5) In determining whether or not a loan in excess of the fifteen (15) percent limitation is secured by "good collateral and other ample security," the lack of a perfected lien, inadequate insurance, and insufficient margins between collateral value and the amount of the loan shall be prima facie evidence of inadequate security to the debt.

(6) A borrower's savings accounts or certificate of deposits in the lending bank will be regarded as collateral to a loan when they are not subject to check or withdrawal, mature on or after the loan which is secured, are under the sole control of the bank, and are properly assigned. Where, according to the terms of the deposit contract, the deposit is eligible for withdrawal before the secured loan matures, the bank must establish internal procedures to prevent release of the security without the lending bank's prior consent. If proper procedures are in place, such deposits will be considered as collateral. Where deposit balances are properly taken as collateral to a loan, the loan may be reduced to the extent of the deposit in determining the amounts loaned for either secured or unsecured legal lending limitations, as applicable.

(7) Except as provided in this paragraph, exposures in the form of insufficient funds checks held beyond the permissible return date and overdrafts shall be considered "extensions of credit" solely for the purpose of determining compliance with the legal limitation as it applies to the maker of the check or owner of the overdraft. Such exposures shall also be subject to the requirements for prior written approval and ample collateral where the total indebtedness of the borrower exceeds fifteen (15) percent of the statutory capital base. Such exposures will not be considered extensions of credit for purposes of compliance with the above legal loan limitations and requirements, provided that the exposure is inadvertent, which requires that:

(a) The exposure(s) does not exceed the aggregate amount of $1,000 at any one time; and

(b) The account is not overdrawn or the insufficient funds check held for more than five (5) business days.

(8) Wherever approval of the Board of Directors or Loan Committee is required, such approval must be specific, prior, written approval of each extension of credit, except that advances made under a master note covering a specific purpose or project need not receive specific approval where such approval was accorded the master note. Annual approval of a line of credit may be used where interest rate, repayment terms, and anticipated collateral are clearly identified and current credit information is on file. Commodity, floor-plan and discount lines of credit which are anticipated to exceed fifteen (15) percent of the statutory capital base may be approved annually to be deemed appropriate by the Board of Directors without each transaction receiving specific prior approval. For those lines that are expressly authorized by statute or regulation to exceed twenty-five (25) percent of the statutory capital base, the line must be reviewed quarterly by the Board of Directors or Loan Committee when the line is in fact in excess of twenty-five (25) percent of the statutory capital base.

(9) In determining the primary collateral basis upon which a loan is granted, that portion of the collateral having the greatest market value shall be assumed to be the primary collateral.

(10) Extensions of credit to political subdivisions of the State of Georgia authorized to levy taxes or backed by the taxing authority of another political subdivision shall qualify for exemption from the twenty-five (25) percent loan limitation under the provisions of O.C.G.A. § 7-1-285(c)(1)(B) , only where such extension of credit otherwise conforms with the provisions of Georgia Constitution, Article 9, Section 5.

(11) Where the "statutory capital base" as defined in O.C.G.A. § 7-1-4(35) is reduced by operating losses, loan losses, or for other reasons approved by the department, existing debt which was in conformity with the legal limitations at the time it originated shall not be construed to be non-conforming with new legal limitations resulting from the reduced statutory capital base.

(12) Pursuant to O.C.G.A. § 7-1-285(e) , a loan or extension of credit to a leasing company for the purpose of purchasing equipment for lease shall be considered a loan to the lessee, provided that:

(a) The bank documents the basis for its reliance on the lessee as the primary source of repayment before the loan is extended to the leasing company;

(b) The loan is made without recourse to the leasing company;

(c) The bank receives a security interest in the equipment and, in the event of default, may proceed directly against the equipment and the lessee for any deficiency resulting from the sale of the equipment;

(d) The leasing company assigns all of its rights under the lease to the bank;

(e) The lessee's lease payments are assigned and paid to the bank directly by the lessee; and

(f) The lease terms are subject to the same limitations that would apply to a bank acting as a lessor.

(13) The Department shall promulgate a form which may be used to document compliance with the requirements for approval of loans, obligations, and credit exposures in excess of 15 percent of the statutory capital base by members of the board of directors or authorized committee of the board of directors as set forth in O.C.G.A. § 7-1-285 (a.1).

(14) In determining whether the common equity tier 1 capital has increased or decreased by 5% or more for purposes of the "statutory capital base" as defined in O.C.G.A. § 7-1-4(35) , each bank will utilize the dollar amount reported on the applicable Consolidated Report of Condition and Income and recalculate its statutory capital base if the dollar amount increases or decreases by 5% or more during the applicable time period.

History

Authority: O.C.G.A. §§ 7-1-61; 7-1-285
History. Original Rule entitled "Analysis" adopted. F. and eff. June 30, 1965.
Repealed: New Rule of the same title adopted. F. June 9, 1972; eff. June 29, 1972.
Repealed: New Rule of the same title adopted. F. July 5, 1973; eff. July 25, 1973.
Repealed: New Rule entitled "Loans Generally, Interpretations and Rulings" adopted. F. Aug. 28, 1975; eff. Sept. 17, 1975.
Amended: F. Jan. 31, 1978; eff. Feb. 20, 1978.
Amended: F. Aug. 22, 1980; eff. Sept. 11, 1980.
Amended: F. July 13, 1981; eff. August 2, 1981.
Amended: F. Aug. 17, 1983; eff. Sept. 6, 1983.
Amended: F. June 28, 1984; eff. August 1, 1984, as specified by the Agency.
Amended: F. Nov. 2, 1994; eff. Nov. 22, 1994.
Amended: F. Sept. 26, 1995; eff. Oct. 16, 1995.
Amended: F. Dec. 6, 1999; eff. Dec. 26, 1999.
Amended: F. Dec. 18, 2000; eff. Jan. 7, 2001.
Amended: F. Aug. 17, 2009; eff. Sept. 6, 2009.
Amended: F. Mar. 3, 2011; eff. Mar. 23, 2011.
Amended: F. Aug. 29, 2014; eff. Sept. 18, 2014.
Amended: F. June 29, 2017; eff. July 19, 2017.
Amended: F. June 27, 2018; eff. July 17, 2018.

Ga. Comp. R. & Regs. r. 80-1-5-.02 Real Estate Loans {#sec-ga.-comp.-r.-regs.-r.-80-1-5-.02 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-5-.02}

(1) A real estate loan (including a leasehold) within the meaning of Part 365 of the Federal Deposit Insurance Corporation's rules and regulations, including 12 CFR 365.1 and 365.2 and the Interagency Guidelines for Real Estate Lending Policies in Appendix A, and 12 C.F.R. 208.51 and the guidelines contained in 12 C.F.R. Part 208 in the case of Federal Reserve member banks, shall comply with the Real Estate Lending Standards of the above laws.

(2) If a loan could be made without real estate as security, a bank will not be penalized for adding real estate as collateral in an abundance of caution. A notation in the loan file must indicate this lack of reliance on the real estate and must meet general safety and soundness standards for credit risk. This does not constitute a waiver of O.C.G.A. § 7-1-285 , related Department rules and regulations, or requirements of federal law, and the soundness of the loan should always be considered.

(3) Except as expressly authorized by O.C.G.A. §§ 7-1-262 or 7-1-263 , banks may not acquire directly or indirectly any ownership interest in real estate without the prior written approval of the Department.

History

Authority: O.C.G.A. §§ 7-1-61; 7-1-286
History. Original Rule entitled "Interpretations" adopted. F. and eff. June 30, 1965.
Repealed: New Rule of the same title adopted. F. June 9, 1972; eff. June 29, 1972.
Repealed: New Rule of the same title adopted. F. July 5, 1973; eff. July 25, 1973.
Repealed: New Rule entitled "Real Estate Loans" adopted. F. Aug. 28, 1975; eff. Sept. 17, 1975.
Amended: F. Jan. 31, 1978; eff. Feb. 20, 1978.
Amended: F. July 13, 1981; eff. August 2, 1981.
Amended: F. Aug. 17, 1983; eff. Sept. 6, 1983.
Amended: F. June 28, 1984; eff. August 1, 1984, as specified by the Agency.
Amended: F. Oct. 12, 1989; eff. Nov. 1, 1989.
Amended: F. Sept. 26, 1995; eff. Oct. 16, 1995.
Amended: F. July 14, 1998; eff. August 3, 1998.
Amended: F. Dec. 18, 2000; eff. Jan. 7, 2001.
Amended: F. July 28, 2003; eff. August 17, 2003.
Amended: F. Aug. 15, 2005; eff. Sept. 4, 2005.
Amended: F. Aug. 22, 2006; eff. Sept. 11, 2006.
Amended: F. Aug. 15, 2007; eff. Sept. 4, 2007.
Amended: F. Aug. 4, 2008; eff. Aug. 24, 2008.
Amended: F. June 29, 2017; eff. July 19, 2017.
Amended: F. July 9, 2019; eff. July 29, 2019.
Amended: F. Jan. 8, 2021; eff. Jan. 28, 2021.

Ga. Comp. R. & Regs. r. 80-1-5-.03 Commodity Loans {#sec-ga.-comp.-r.-regs.-r.-80-1-5-.03 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-5-.03}

(1) In order that commodity loans and advances may be exempt from the twenty-five (25) percent legal loan limitation of the lending bank, strict compliance with the following requirements must be met.

(a) The commodity must have a market value with ready sale in the open market.

(b) First lien security title to the commodity must be indicated on record in the name of the bank. Where commodities are stored in a warehouse, such lien must be evidenced by the bank's physical possession of warehouse receipts covering the commodities or, if electronic warehouse receipts are utilized, by recordation of bank's lien position on the electronic warehouse receipt or the electronic records of the state approved electronic receipt provider, which must be accessible to the bank. Bank must also have appropriately executed security agreements and financing statements.

(c) The commodity must be covered by insurance against fire and other appropriate hazards with loss payee designated as the lending bank.

(d) The initial advance or loan shall not exceed eighty-five (85) percent of the market value of the commodity on the date of the loan, the margin of fifteen (15) percent between the market value and outstanding loan is maintained at all times, and to that end, the bank shall have the right to call for additional collateral if the margin falls below fifteen (15) percent, and, if the additional collateral is not provided, the bank shall have the right to sell the commodity on the open market. For purposes of this paragraph, "market value" shall mean the local cash price bid for the commodity in question or the nearby future price applicable to future contracts to sell existing commodities but in no event shall the market value exceed fifty (50) percent of the originating bank's statutory capital base.

(e) Where the borrower is not independent of the warehouseman or other person holding the commodity, the commodity must be subjected to inspection by the lender or his agent at least monthly and a written record of such inspections must be maintained.

(f) The obligation matures in not more than twelve (12) months if secured by nonperishable staples; or the obligation matures in not more than six (6) months if secured by refrigerated or frozen staples.

(g) There must be a written agreement, signed by both the bank and the borrower, which clearly outlines the requirements of the bank and the duties and responsibilities of the borrower.

(2) Manufactured or agricultural products in the processing stages shall not be considered as commodities within the meaning of this regulation, but are inventory or goods-in-process to be treated as additional collateral only.

(3) In order for livestock to qualify as commodities subject to treatment under Section (1) of this Rule, the borrower must be engaged in livestock production and the collateral must be marked for identification and confined to feed lots ready for sale in the open market. Livestock held as fixed assets such as for reproduction or dairy purposes do not qualify for the treatment accorded under Section (1) of this Rule.

(4) Manufactured products commonly financed under floor-plan arrangements shall be subject to treatment as commodities under Section (1) of this Rule if they meet the requirements of that section and the conveyance of title identifies each individual unit and does not convey merchandise in bulk. Liens on merchandise in bulk are considered as inventory loans and not commodity loans.

History

Authority: O.C.G.A. §§ 7-1-61, 7-1-285
History. Original Rule entitled "Commodity Loans" adopted. F. Aug. 28, 1975; eff. Sept. 17, 1975.
Amended: F. Jan. 31, 1978; eff. Feb. 20, 1978.
Amended: F. Aug. 17, 1983; eff. Sept. 6, 1983.
Amended: F. July 24, 1986; eff. September 1, 1986, as specified by the Agency.
Amended: F. Dec. 18, 2000; eff. Jan. 7, 2001.
Amended: F. July 7, 2022; eff. July 27, 2022.

Ga. Comp. R. & Regs. r. 80-1-5-.04 Participation Loans {#sec-ga.-comp.-r.-regs.-r.-80-1-5-.04 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-5-.04}

(1) That portion of a loan which is sold by the originating bank to another bank must conform to all laws and regulations applicable to that category of loan to the same extent as if the purchasing bank had itself originated the loan; i.e., collateral documentation, maturity, loan-to-collateral value ratio, maximum loan limits, etc. The purchasing bank shall obtain from the selling bank copies of all pertinent documents or a summary of sufficient information therefrom to allow that bank to conclude that all legal and regulatory requirements have been met and that the loan may be legally carried upon its books.

(2) Participation in Pools of Loans or Discount Lines:

(a) Loans contained in the pool or discount line must be physically marked or specifically identified on the selling bank's records.

(b) The participation agreement must call for the participant to share pro rata in losses experienced by the pool or discount line.

(c) The participation agreement must provide for periodic, at least quarterly, reports by the seller to the purchaser as settlement for losses incurred and providing past due status of loans contained in the pool or discount line.

(d) Where the participation purchased is in excess of fifteen (15) percent of the purchasing bank's statutory capital base, the participation must have the prior written approval of the bank's Board of Directors or Loan Committee.

(3) Where there exist agreements to repurchase or loss indemnity agreements between the selling and purchasing banks, participations shall be treated as loans to the selling bank by the purchasing bank and the amount of the participation shall be considered to be remaining on the selling bank's books for purposes of legal limitations.

(4) The portion of a loan or extension of credit sold as a participation on a nonrecourse basis shall not constitute a loan or extension of credit for purposes of O.C.G.A. § 7-1-285 , provided that the participation results in a pro rata sharing of credit risk proportionate to the respective interests of the originating and participating lenders. Where a participation agreement provides that repayment must be applied first to the portions sold, a pro rata sharing will be deemed to exist only if the agreement also provides that, in the event of default or comparable event defined in the agreement, participants must share in all subsequent repayments and collections in proportion to their percentage participation at the time of the occurrence of the event.

History

Authority: Ga. L. 1974, pp. 733, 791-792; Ga. L. 1983, Act No. 255, effective March 16, 1983
History. Original Rule entitled "Participation Loans" was filed on August 28, 1975, effective September 17, 1975.
Amended: Filed August 17, 1983; effective September 6, 1983.
Amended: Filed June 28, 1984; effective August 1, 1984, as specified by the Agency.
Amended: F. June 29, 2017; eff. July 19, 2017.

Ga. Comp. R. & Regs. r. 80-1-5-.05 Discounted Dealer Paper {#sec-ga.-comp.-r.-regs.-r.-80-1-5-.05 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-5-.05}

(1) Purchases of dealer paper, with or without recourse, may generally be made without limitation; however, where the aggregate amount of such paper outstanding exceeds twenty-five (25) percent of the bank's statutory capital base and the paper has been taken with recourse or pursuant to an agreement to repurchase between the bank and the dealer, the following conditions must be met:

(a) The dealer must maintain a dealer's reserve in an amount equal to at least five (5) percent of the total outstanding balance on notes discounted with recourse or pursuant to the repurchase agreement and such reserve must be under the control of the lending bank.

(b) The bank must maintain a balance sheet and profit and loss statement on the dealer covering the most recent fiscal period for which such information is available, but in no event shall the statements be more than eighteen months old.

(c) The obligors on all such notes shall have been notified that the bank is owner of the note and payments are to be made directly to the bank.

(d) The dealers shall not be permitted to make payments on the discount notes but shall be required to take over, in full, any note which is past due four months or more.

(e) There must be a written agreement, signed by both the bank and the dealer, which clearly outlines the requirements of the bank and the duties and responsibilities of the dealer.

(2) Whenever the aggregate outstanding balance of discount notes on a single dealer exceeds fifteen (15) percent of the bank's statutory capital base and the notes are taken with recourse or pursuant to a repurchase agreement, the Board of Directors at least annually shall approve the maximum amount to which such aggregate outstanding balance may extend. When in excess of twenty-five (25) percent of the statutory capital base, the line must be reviewed quarterly by the Board of Directors or Loan Committee.

History

Authority: Ga. L. 1974, pp. 733, 793-795; Ga. L. 1983, Act No . 255, effective March 16, 1983
History. Original Rule entitled "Discounted Dealer Paper" was filed on August 28, 1975; effective September 17, 1975.
Amended: Filed August 17, 1983; effective September 6, 1983.

Ga. Comp. R. & Regs. r. 80-1-5-.06 Loans Secured by Capital Securities {#sec-ga.-comp.-r.-regs.-r.-80-1-5-.06 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-5-.06}

No bank may lend upon the capital securities of any corporation which is registered as a bank holding company for such lender bank, unless such securities have an established market for resale and market prices for such securities are regularly quoted by an established exchange or over the counter. This restriction shall not be applicable to loans made prior to the effective date of this section nor to violations resulting from a merger, consolidation or acquisition of the lender occurring after the date of loan, provided such loans are repaid in accordance with the contracted terms. This restriction shall not be applicable to the taking of a security interest to such securities to prevent losses on debts previously contracted. This restriction shall also not be applicable where both the aggregate number of shares in which a security interest is held does not exceed ten (10) percent of the total number of shares outstanding and the credit extended upon the basis of such shares as security does not exceed the book value of such shares.

History

Authority: Ga. L. 1974, pp. 733, 798
History. Original Rule entitled "Loans Secured by Capital Securities" was filed on July 13, 1981; effective August 2, 1981.
Amended: Filed August 17, 1983; effective September 6, 1983.

Ga. Comp. R. & Regs. r. 80-1-5-.07 Extensions of Credit Involving Directors or Officers {#sec-ga.-comp.-r.-regs.-r.-80-1-5-.07 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-5-.07}

(1) The definition and commentary contained in Federal Reserve Regulation "O" shall be applied to effect the intent of Code Section 7-1-491 .

(2) The Department may use its discretion in applying the non-preferential loan prohibition, and in particular may find a violation where it discovers that a bank is attempting to circumvent a prohibition where it would otherwise apply.

History

Authority: O.C.G.A. Sec. 7-1-491
History. Original Rule entitled "Extensions of Credit Involving Directors or Officers" adopted. F. June 28, 1984; eff. August 1, 1984, as specified by the Agency.
Amended: F. Sept. 26, 1995; eff. Oct. 16, 1995.

Ga. Comp. R. & Regs. r. 80-1-5-.08 Bank Guaranty of Customer Credit Card Obligations at Another Bank {#sec-ga.-comp.-r.-regs.-r.-80-1-5-.08 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-5-.08}

(1) A bank which does not issue its own credit card but acts as an agent for a correspondent bank may guarantee obligations of established customers in the form of revolving lender credit card accounts at another bank provided the guaranteeing bank establishes a maximum limit for each such account, is not obligated for any amount in excess of such limit, and maintains records updated at least monthly reflecting the current outstanding balance on each account, the approved limit on each account, and the current past due or payment status on each account.

(2) Guarantees outstanding in compliance with the foregoing shall be considered to be in the nature of standby letters of credit and shall be reflected as such on the books and records of the guaranteeing bank. Outstanding guarantees shall be added to customer liabilities in determining compliance with legal loan limitations.

History

Authority: Ga. L. 1974, pp. 733, 801
History. Original Rule entitled "Bank Guaranty of Customer Credit Card Obligations at Another Bank" adopted. F. July 24, 1986; eff. September 1, 1986, as specified by the Agency.

Ga. Comp. R. & Regs. r. 80-1-5-.09 Repealed {#sec-ga.-comp.-r.-regs.-r.-80-1-5-.09 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-5-.09}

History

Authority: Ga. L. 1974, p. 733, Ga. L. 1989, p. 1252
History. Original Rule entitled "Appraisals" adopted. F. Oct. 12, 1989; eff. Nov. 1, 1989.
Repealed: F. Dec. 27, 1991; eff. Jan. 16, 1992.

Ga. Comp. R. & Regs. r. 80-1-5-.10 Real Estate Leasing {#sec-ga.-comp.-r.-regs.-r.-80-1-5-.10 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-5-.10}

(1) A bank may become the owner and lessor of real property under certain circumstances described in O.C.G.A. § 7-1-282 .

(2) A bank that desires to lease real property under the conditions in O.C.G.A. § 7-1-282 must make a letter application to the Department to conduct the activity. Such letter application shall include:

(a) A business plan that addresses the accounting, tax and legal implications of this type of leasing and the projected volume and scope of the activity;

(b) Documentation of the experience and expertise of management that indicates ability to handle credit risk and administer the leasing program in conformity with accounting, legal and tax requirements;

(c) Detailed risk analysis to include the potential impact of the activity on the financial and operating condition of the bank;

(d) A copy of any required federal application and approval; and

(e) Any other items requested by the Department.

(3) The aggregate limit for such leasing for banks shall be 100 percent of the bank's statutory capital base. Any higher amount desired must be approved in advance by the Department.

(4) The Department may at any time restrict the volume of business in this type of leasing if in its judgment there are concerns for safety and soundness of the operation.

History

Authority: O.C.G.A. §§ 7-1-61, 7-1-282
History. Original Rule entitled "Real Estate Leasing" adopted. F. Sept. 1, 2004; eff. Sept. 21, 2004.
Amended: F. July 7, 2022; eff. July 27, 2022.

Ga. Comp. R. & Regs. r. 80-1-5-.11 Combination of Debt for Legal Lending Limit Purposes {#sec-ga.-comp.-r.-regs.-r.-80-1-5-.11 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-5-.11}

(a) General Rule. Pursuant to Code Section 7-1-285 , loans or extensions of credit to one person will be attributed to another person and each person will be deemed a borrower:

(1) When proceeds of a loan or extension of credit are to be used for the direct benefit of the other person, to the extent of the proceeds so used;

(2) When a common enterprise is deemed to exist between the persons as the persons within the group are directly or indirectly related through common control including where one borrower is directly or indirectly controlled by another borrower;

(3) When there is a common use of funds between the persons; or

(4) When a person has a financial obligation on a loan or an extension of credit, to the extent of such obligation.

(b) Definitions. For purposes of this Rule, the below terms shall be defined as follows:

(1) Common control. The direct or indirect possession of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise. Without limiting the foregoing, a person shall be considered to control another person if the first person:

(A) Owns, controls or holds with power to vote 25 percent or more of any class of voting securities of the other person;

(B) Controls in any manner the election of a majority of the directors, trustees, or persons performing similar functions of the other person; or

(C) Exercises a controlling influence over the management or policies over the other person as determined by the department.

(2) Common use of funds. The proceeds of a loan or an extension of credit to a borrower will be deemed to be a common use of funds and will be attributed as one loan when the proceeds, or assets purchased with the proceeds, are comingled or used to acquire property, goods, or services for the purpose of a shared common commercial objective between the borrowers.

(3) Direct benefit. The proceeds of a loan or extension of credit to a borrower will be deemed to be used for the direct benefit of another person and will be attributed to the other person when the proceeds, or assets purchased with the proceeds, are transferred to another person, other than in a bona fide arm's length transaction where the proceeds are used to acquire property, goods, or services.

(4) Obligation. A commitment that creates a liability or contingent liability for payment on a loan or extension of credit irrespective of whether the person is a borrower.

(5) Person. An individual or a corporation, limited liability company, partnership, trust, association, joint venture, sole proprietorship, unincorporated organization, or any other form of entity.

History

Authority: O.C.G.A. § 7-1-285
History. Original Rule entitled "Combination of Debt for Legal Lending Limit Purposes" adopted. F. Aug. 17, 2009; eff. Sept. 6, 2009.
Amended: F. Nov. 2, 2010; eff. Nov. 22, 2010.
Amended: F. June 29, 2017; eff. July 19, 2017

Ga. Comp. R. & Regs. r. 80-1-5-.12 Conditional Waiver of Applicability of Revised Statutory Capital Base Definition {#sec-ga.-comp.-r.-regs.-r.-80-1-5-.12 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-5-.12}

(1) Prior to June 1, 2017, the definition of statutory capital base meant the "sum of the capital stock, paid-in capital, appropriated retained earnings, and capital debt of a bank or trust company less any amount of good will, core deposit intangibles, or other intangible assets related to the purchase, acquisition, or merger of a bank charter or accumulated deficit (negative retained earnings)." The revised definition of statutory capital base expressly provides that the Department has the authority to phase in the revised definition for those banks that will have a decreased statutory capital base.

(2) Any bank that has a decrease in its statutory capital base as of July 1, 2017, may submit a letter form application seeking a waiver from the applicability of the revised definition. Any such request for a waiver must be received by the Department no later than August 15, 2017. The application should provide information pertinent to the request, including, but not limited to, a calculation of the statutory capital base under both formulas.

(3) The Department shall take into consideration competitive, financial, managerial, safety and soundness, and other concerns in evaluating any waiver request. The Department is authorized to impose conditions on the grant of any request for a waiver.

(4) All waivers, conditional or otherwise, issued pursuant to this Rule shall expire on August 31 of each year, and application for renewal of a waiver shall be made annually on or before August 1 of each year.

History

Authority: O.C.G.A. §§ 7-1-4; 7-1-61; 7-1-285
History. Original Rule entitled "Conditional Waiver of Applicability of Revised Statutory Capital Base Definition" adopted. F. June 29, 2017; eff. July 19, 2017.

Subject 80-1-6 Bank Financial and Other Reports

Ga. Comp. R. & Regs. r. 80-1-6-.01 Reports to Department {#sec-ga.-comp.-r.-regs.-r.-80-1-6-.01 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-6-.01}

Every bank shall within ten (10) days after knowledge thereof report:

(a) The election of any new chief executive officer or president;

(b) The resignation or removal of the chief executive officer, president, or any director, giving the reason for such action; and

(c) The transfer of any common stock of the bank aggregating fifteen (15) percent of the outstanding shares of common stock of the bank or any smaller transfer resulting in the new owner holding in the aggregate more than twenty-five (25) percent of the outstanding common stock of the bank.

History

Authority: O.C.G.A. § 7-1-61
History. Original Rule entitled "Conditions for Compliance With This Regulation" adopted. F. and eff. June 30, 1965.
Repealed: New Rule of same title adopted. F. June 9, 1972; eff. June 29, 1972.
Repealed: New Rule entitled "Reports to Department" adopted. F. Aug. 28, 1975; eff. Sept. 17, 1975.
Repealed: New Rule of same title adopted. F. July 13, 1981; eff. August 2, 1981.
Amended: F. Aug. 15, 2007; eff. Sept. 4, 2007.
Amended: F. Sep. 18, 2012; eff. Oct. 8, 2012.
Amended: F. June 20, 2016; eff. July 10, 2016.
Amended: F. July 9, 2019; eff. July 29, 2019.

Ga. Comp. R. & Regs. r. 80-1-6-.02 Reports to Shareholders {#sec-ga.-comp.-r.-regs.-r.-80-1-6-.02 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-6-.02}

(1) On or before the date of the annual stockholders' meeting of any bank, the shareholders of the bank, regardless of class or voting rights, shall each be provided with the following schedules for the last fiscal year on a comparative basis with the preceding fiscal year:

(a) Statement of Assets, Liabilities, and Capital;

(b) Statement of Earnings and Expenses; and

(2) Bank Reports Maintained; Compensation to Directors, etc.

(a) Each bank shall maintain throughout the year for inspection by any shareholder:

(i) Each call Report of Condition and Report of Income since the last shareholders' meeting at which such information was distributed;

(ii) A listing of all shareholders giving each of their names, post office address of record, and number of shares owned; and

(iii) A listing of compensation to each director and chief executive officer if not a director, including salaries, bonuses, committee fees, commission from sale of insurance, etc.

(b) Provided such information shall be available only upon written request by the shareholder setting forth the reasons for which such information is requested and certifying that the recipient will not further distribute any information furnished.

(c) Information requested under paragraph (a) shall be made available within ten (10) days of receipt of any written request therefor.

History

Authority: Ga. L. 1974, p. 733, 1975, S.B. 145
History. Original Rule entitled "Interpretation of Provisions Within the Statute" adopted. F. and eff. June 30, 1965.
Repealed: New Rule of same title adopted. F. June 9, 1972; eff. June 29, 1972.
Repealed: New Rule entitled "Reports to Shareholders" adopted. F. Aug. 28, 1975; eff. Sept. 17, 1975.
Amended: F. Nov. 4, 1975; eff. Nov. 24, 1975.
Amended: F. July 13, 1981; eff. August 2, 1981.
Amended: F. Sep. 18, 2012; eff. Oct. 8, 2012.

Ga. Comp. R. & Regs. r. 80-1-6-.03 Directors' Financial Reports {#sec-ga.-comp.-r.-regs.-r.-80-1-6-.03 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-6-.03}

Each director of a bank or trust company shall maintain on file with the chief executive officer of the bank or trust company for which he/she serves as a director a financial statement on forms prescribed by the Department. Such financial statement shall be revised annually, but in no event shall the statement on file be more than eighteen (18) months old. At the discretion of the Board of Directors of each bank or trust company, such financial statements may be maintained in sealed envelopes available for inspection only by state or federal examiners.

History

Authority: Ga. L. 1974, p. 733; 1975, S.B. 145
History. Original Rule entitled "Exemptions" adopted. F. and eff. June 30, 1965.
Repealed: New Rule of same title adopted. F. June 9, 1972; eff. June 29, 1972.
Repealed: F. Aug. 28, 1975; eff. Sept. 17, 1975.
Amended: New Rule entitled "Directors' Financial Reports" adopted. F. Nov. 4, 1975; eff. Nov. 24, 1975.
Amended: F. June 29, 2017; eff. July 19, 2017.

Ga. Comp. R. & Regs. r. 80-1-6-.04 Repealed {#sec-ga.-comp.-r.-regs.-r.-80-1-6-.04 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-6-.04}

History

Authority: Authority Ga. L. 1919, p. 144, 1972, pp. 556 to 558
History. Original Rule entitled "Construction Loans" adopted. F. and eff. June 30, 1965.
Repealed: New Rule entitled "Construction and Development Loans" adopted. F. June 9, 1972; eff. June 29, 1972.
Repealed: F. Aug. 28, 1975; eff. Sept. 17, 1975.

Ga. Comp. R. & Regs. r. 80-1-6-.05 Repealed {#sec-ga.-comp.-r.-regs.-r.-80-1-6-.05 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-6-.05}

History

Authority: Ga. L. 1919, p. 144
History. Original Rule entitled "Loans Secured by Mortgages on Which FHA Has Issued Firm Commitments to Insure" adopted. F. and eff. June 30, 1965.
Repealed: New Rule of same title adopted. F. June 9, 1972; eff. June 29, 1972.
Repealed: F. Aug. 28, 1975; eff. Sept. 17, 1975.

Ga. Comp. R. & Regs. r. 80-1-6-.06 Repealed {#sec-ga.-comp.-r.-regs.-r.-80-1-6-.06 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-6-.06}

History

Authority: Ga. L. 1919, p. 144
History. Original Rule entitled "Charging Off Nonconforming Real Estate Loans" adopted. F. and eff. June 30, 1965.
Repealed: New Rule of same title adopted. F. June 9, 1972; eff. June 29, 1972.
Repealed: F. Aug. 28, 1975; eff. Sept. 17, 1975.

Subject 80-1-7 Legal Reserves

Ga. Comp. R. & Regs. r. 80-1-7-.01 Definitions {#sec-ga.-comp.-r.-regs.-r.-80-1-7-.01 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-7-.01}

(1) Legal Reserve:

(a) Lawful money of the United States in the office and vaults of the financial institution.

(b) Moneys on deposit subject to immediate call with other federally insured financial institutions such as approved by the Department of Banking and Finance pursuant to Code Section 7-1-370 or with a Federal Reserve Bank, except where such deposits are for the purpose of meeting reserve requirements against assets pursuant to the Federal Credit Control Act of 1969 and regulations pursuant thereto.

Reciprocal demand balances due to such financial institutions shall be deducted from the balance due from those financial institutions before making any calculations.
Outgoing cash letters shall be included and incoming cash letters deducted before making any calculations of available moneys on deposit.

(2) Financial institutions eligible to act as a depository for reserves of other financial institutions shall be either a Federal Reserve Bank or a federally insured bank or credit union domiciled within the United States; provided that no financial institution may deposit reserve balances in any such depository in excess of the greater of ten (10) percent of the depositing financial institution's total capital notes, common capital, and surplus, or $250,000, unless prior approval of such depository is granted by the Commissioner.

(3) The biweekly averaging period shall commence on any Thursday and shall continue for the next consecutive 14-calendar-day period. Calculations of reserves and reserve requirements shall include data from all business days; provided financial institutions which are open for business, making loans, taking deposits, or both, six days per week may designate to exclude data from any Wednesday, Thursday, or Saturday for which deposit ledgers are not regularly posted, but not more than one day each week may be so excluded. Wherever data is unavailable or excluded for a calendar day, data from the previous business day shall be used in lieu thereof.

History

Authority: Ga. L. 1974, pp. 733, 820-822
History. Original Rule entitled "Amounts of Reserves to be Maintained" was filed and effective on June 30, 1965.
Amended: Rule repealed and a new Rule of the same title adopted. Filed June 9, 1972; effective June 29, 1972.
Amended: Filed July 5, 1973; effective July 25, 1973.
Amended: Rule repealed and a new Rule entitled "Definitions" adopted. Filed August 28, 1975; effective September 17, 1975.
Amended: Rule repealed and a new Rule of the same title adopted. Filed June 9, 1980; effective October 1, 1980, as specified by the Agency.
Amended: F. June 20, 2016; eff. July 10, 2016.

Ga. Comp. R. & Regs. r. 80-1-7-.02 Records to Be Maintained {#sec-ga.-comp.-r.-regs.-r.-80-1-7-.02 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-7-.02}

Where reserves are required pursuant to Rule 80-1-7-.03(2), each financial institution shall maintain, for a period of not less than two calendar years, a record of its biweekly calculations of reserve requirements and reserves maintained. Such record shall be subject to review during examinations of the financial institution. A copy of the recommended format to be used in calculating reserves will be available from the Department of Banking and Finance, but alternative forms may be utilized if they provide the same basic information as provided by the recommended form.

History

Authority: Ga. L. 1974, pp. 733, 820-822
History. Original Rule entitled "Legal Reserve" was filed and effective on June 30, 1965.
Amended. Rule repealed and a new Rule entitled "Records to be Maintained" adopted. Filed June 9, 1972; effective, June 29, 1972.
Amended: Filed August 28, 1975; effective September 17, 1975.
Amended: Rule repealed and a new Rule of the same title adopted. Filed June 9, 1980; effective October 1, 1980, as specified by the Agency.
Amended: F. June 20, 2016; eff. July 10, 2016.

Ga. Comp. R. & Regs. r. 80-1-7-.03 Amounts of Reserves to Be Maintained {#sec-ga.-comp.-r.-regs.-r.-80-1-7-.03 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-7-.03}

(1) Every financial institution shall maintain a minimum of the legal reserves required to be maintained pursuant to the federal "Monetary Control Act of 1980" and other applicable federal requirements. The reserve requirement is the minimum acceptable for a financial institution whose overall financial condition is fundamentally sound, which is well-managed and which has not material or significant operational or financial weaknesses. In the event the Department concludes that a financial institution does not satisfy these standards, the Department may establish a higher reserve requirement for a financial institution to maintain.

(2) Financial institutions which are governed by 12 C.F.R. § 204 shall, in lieu of the reserve herein required, keep and maintain such reserve in accordance with the applicable federal requirements.

History

Authority: Ga. L. 1974, pp. 733, 802-822
History. Original Rule entitled "Gross Demand Deposits" was filed and effective on June 30, 1965.
Amended: Rule repealed and a new Rule entitled "Definitions" adopted. Filed June 9, 1972; effective June 29, 1972.
Amended: Filed July 5, 1973; effective July 25, 1973.
Amended: Rule repealed and a new Rule entitled "Amounts of Reserves to be Maintained" adopted. Filed August 28, 1975; effective September 17, 1975.
Amended: Rule repealed and a new Rule of the same title adopted. Filed June 9, 1980; effective October 1, 1980, as specified by the Agency.
Amended: F. June 20, 2016; eff. July 10, 2016.

Ga. Comp. R. & Regs. r. 80-1-7-.04 Repealed {#sec-ga.-comp.-r.-regs.-r.-80-1-7-.04 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-7-.04}

History

Authority: Georgia Code Section 13-2027
History. Original Rule entitled "Net Demand Deposits" was filed and effective on June 30, 1965.
Amended: Rule repealed. Filed June 9, 1972; effective June 29, 1972.

Ga. Comp. R. & Regs. r. 80-1-7-.05 Repealed {#sec-ga.-comp.-r.-regs.-r.-80-1-7-.05 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-7-.05}

History

Authority: Georgia Code Section 13-2027
History. Original Rule entitled "Other Definitions" was filed and effective on June 30, 1965.
Amended: Rule repealed. Filed June 9, 1972; effective June 29, 1972.

Subject 80-1-8 Dormant Accounts

Ga. Comp. R. & Regs. r. 80-1-8-.01 Dormant Accounts: Service Charges {#sec-ga.-comp.-r.-regs.-r.-80-1-8-.01 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-8-.01}

(1) Dormant accounts are hereby defined as follows:

(a) Demand Deposit Accounts are deemed to be dormant when the depositor, which for the purposes of this rule shall include a member in the case of credit unions and a shareholder in the case of savings and loan associations, has neither increased or decreased the amount of the deposit nor corresponded with the financial institution regarding the deposit for a period of not less than twelve months immediately preceding the determination.

(b) Time and Savings Deposits, including Certificates of Deposit, are deemed to be dormant when the depositor has neither increased or decreased the amount of the deposit or shares nor corresponded with the financial institution regarding the deposit or shares for a period of not less than five (5) years from the date upon which the deposit or share first became eligible for withdrawal.

(c) Certified and Official Checks shall be deemed to be dormant when they have not been presented for payment within two (2) years of the date of issue, or if the issuing financial institution has not had correspondence with the registered owner of the check for a period of two (2) years immediately preceding the determination of dormancy.

(d) For purposes of this regulation, the term, "Demand Deposit Accounts," shall include share draft accounts in the case of credit unions, as well as any "Time" or "Savings" account which by its terms is due and payable, either in whole or in part, within less than ninety days or upon less than ninety days notice by the depositor.

(e) For purposes of this regulation, the term "corresponded" or "correspondence" includes, but is not limited to:

any communication, indication of interest, or relationship set forth in O.C.G.A. § 44-12-197(a) (2)-(5) ; or
a depositor accessing an online account.

(2) Where the signature card or other evidence of the financial institution's contractual obligation relative to a deposit account does not make provision for maintenance or service charge on a dormant account as heretofore described, such a charge may be assessed in an amount not to exceed $5.00 per month. Service charges or maintenance charges assessed pursuant to contractual authority governing the account shall not exceed the greater of $5.00 per month or the per month service charge which the financial institution otherwise assesses against active accounts. Such service charge or maintenance charge may only be assessed after the account has been dormant for at least twelve months. No service charge or maintenance charge may be assessed for the dormancy period beyond the first twelve months in which the service charge or maintenance charge is first assessed. No service charge or maintenance charge may be assessed unless the financial institution provides written notice prior to the initial imposition of the charges pursuant to O.C.G.A. § 44-12-197(c)(1) . Dormant account service charge or maintenance charge may be charged against the account at any time prior to escheat of the account balance under the provisions of the Disposition of Unclaimed Properties Act so long as the total service charge or maintenance charge does not exceed the amount which could have been assessed during the first twelve months of dormancy pursuant to the governing contract between the parties or this regulation.

History

Authority: O.C.G.A. § 7-1-61
History. Original Rule entitled "Dormant Bank Accounts" adopted. F. Apr. 21, 1966; eff. May 10, 1966.
Repealed: New Rule entitled "Dormant Accounts: Service Charges" adopted. F. June 9, 1972; eff. January 1, 1973, as specified by the Agency.
Amended: Authority changed. F. Aug. 28, 1975; eff. Sept. 17, 1975.
Amended: F. July 13, 1981; eff. August 2, 1981.
Amended: F. June 28, 1984; eff. August 1, 1984, as specified by the Agency.
Amended: F. July 28, 2003; eff. August 17, 2003.
Amended: F. Jan. 8, 2021; eff. Jan. 28, 2021.
Amended: F. June 16, 2026; eff. July 6, 2026.

Ga. Comp. R. & Regs. r. 80-1-8-.02 Repealed {#sec-ga.-comp.-r.-regs.-r.-80-1-8-.02 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-8-.02}

History

Authority: Ga. L. 1972, p. 762; Ga. L. 1974, p. 733
History. Original Rule entitled "Service Charges" was filed on April 21, 1966; effective May 10, 1966.
Amended: Rule repealed and a new Rule entitled "Abandoned Property Defined" adopted. Filed June 9, 1972; effective January 1, 1973, as specified by the Agency.
Amended: Filed July 5, 1973; effective July 25, 1973.
Amended: Authority changed. Filed August 28, 1975; effective September 17, 1975.
Amended: Rule repealed. Filed July 13, 1981; effective August 2, 1981.

Ga. Comp. R. & Regs. r. 80-1-8-.03 Repealed {#sec-ga.-comp.-r.-regs.-r.-80-1-8-.03 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-8-.03}

History

Authority: Ga. L. 1972, p. 762; Ga. L. 1974, p. 733
History. Original Rule entitled "Service Charges, Time and Savings Deposits" was filed on April 21, 1966; effective May 10, 1966.
Amended: Rule repealed and a new Rule entitled "Reports of Abandoned Property Held" adopted. Filed June 9, 1972; effective January 1, 1973, as specified by the Agency.
Amended: Authority changed. Filed August 28, 1975; effective September 17, 1975.
Amended: Rule repealed. Filed July 13, 1981; effective August 2, 1981.

Ga. Comp. R. & Regs. r. 80-1-8-.04 Repealed {#sec-ga.-comp.-r.-regs.-r.-80-1-8-.04 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-8-.04}

History

Authority: Ga. L. 1972, p. 762; Ga. L. 1974. p. 733
History. Original Rule entitled "Outstanding Bank Drafts" was filed on April 21, 1966; effective May 10, 1966.
Amended: Rule repealed and a new Rule entitled "Disposition of Abandoned Property" adopted. Filed June 9, 1972; effective January 1, 1973, as specified by the Agency.
Amended: Filed July 5, 1973; effective July 25, 1973.
Amended: Authority changed. Filed August 28, 1975; effective September 17, 1975.
Amended: Rule repealed. Filed July 13, 1981; effective August 2, 1981.

Ga. Comp. R. & Regs. r. 80-1-8-.05 Repealed {#sec-ga.-comp.-r.-regs.-r.-80-1-8-.05 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-8-.05}

History

Authority: Ga. L. 1972, Senate Bill 430
History. Original Rule entitled "Effective Date" was filed on June 9, 1972; effective January 1, 1973, as specified by the Agency.
Amended: Rule repealed. Filed August 28, 1975; effective September 17, 1975.

Subject 80-1-9 Borrowed Money

Ga. Comp. R. & Regs. r. 80-1-9-.01 Borrowed Money Defined {#sec-ga.-comp.-r.-regs.-r.-80-1-9-.01 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-9-.01}

Borrowed money for purposes of this Regulation and as used in O.C.G.A. § 7-1-291 shall mean the sum of all moneys owed by a bank including participations sold with recourse but excluding:

(a) Liabilities for deposits and official checks recorded during the regular course of business,

(b) Liabilities for moneys accrued as expenses payable or income deferred,

(d) Liabilities to Federal Reserve Bank on account of money borrowed or rediscounts,

(e) Liabilities on account of the acquisition of reserve balances at a Federal Reserve Bank or other reserve agent from a member or nonmember bank,

(f) Liabilities on account of agreements to repurchase securities sold by the bank (commonly known as "repurchase agreements"),

(g) Liabilities which result from the purchase of Federal or Correspondent Funds in excess of amounts excluded under subparagraph (d) herein to the extent that such Federal or Correspondent Funds are held for resale to other financial institutions,

(h) Liabilities which result from the acquisition of excess funds of any state or federal savings and loan association for the purpose of investing such funds in the "federal fund" market at the direction of the association,

(i) Liabilities which result from borrowing from the Export-Import Bank of the United States to the extent that such borrowings are secured by obligations to the bank which are guaranteed by the Export-Import Bank, and

(j) Liabilities in the form of subordinated securities pursuant to O.C.G.A. § 7-1-419 .

History

Authority: Ga. L. 1974, pp. 733, 801, 802
History. Original Rule was filed on May 9, 1967; effective May 28, 1967.
Amended:Original Rule entitled "Retention of Records" repealed and a new Rule entitled "Borrowed Money Defined" adopted. Filed July 5, 1973; effective July 25, 1973.
Amended: Filed September 3, 1974; effective September 23, 1974.
Amended: Filed August 28, 1975; effective September 17, 1975.
Amended: F. Aug. 26, 1997; eff. Sept. 15, 1997.
Amended: F. June 20, 2016; eff. July 10, 2016.

Ga. Comp. R. & Regs. r. 80-1-9-.02 Reserved {#sec-ga.-comp.-r.-regs.-r.-80-1-9-.02 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-9-.02}

History

Authority: Ga. L. 1974, pp. 733, 801, 802. O.C.G.A. Sec. 7-1-61
History. Original Rule entitled "Limitations on Borrowed Money" was filed on July 5, 1973; effective July 25, 1973.
Amended: Filed August 28, 1975; effective September 17, 1975.
Amended: Filed January 31, 1978; effective February 20, 1978.
Repealed: F. Aug. 26, 1997; eff. Sept. 15, 1997.

Subject 80-1-10 Fixed Assets and Assets Acquired D.p.c

Ga. Comp. R. & Regs. r. 80-1-10-.01 Limitation on Fixed Asset Investment; Excessive Investments {#sec-ga.-comp.-r.-regs.-r.-80-1-10-.01 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-10-.01}

(1) Banks may purchase, hold, and convey real estate only such as shall be necessary for the convenient transaction of its business and recreational use of its employees, except that real estate commonly referred to as Other Real Estate and as defined herein may be held for not longer than five (5) years unless the time limitation is extended by the Department of Banking and Finance.

(2) The aggregate investment by a bank in real estate, bank premises, and furniture and fixtures, stock in any real estate holding subsidiary, and leasehold as defined herein shall not exceed sixty (60) percent of the bank's statutory capital base; except that a greater sum may be invested with the prior approval of the Department of Banking and Finance.

(3) Applications for approval to invest in fixed assets an amount in excess of the limitations set forth in paragraph (2) shall be in letter form and must provide for an orderly plan for restoring the fixed asset investment to the sixty (60) percent limitation within not more than five (5) years through one of the following means:

(a) Regular annual depreciation charges consistent with current Federal Income Tax regulations, or

(b) Predetermined plans for restructuring the capital accounts to increase the sixty (60) percent legal limitation, or

(4) In the event a bank is initially in compliance with the limitations set forth in paragraph (2) but the investment in fixed assets ultimately exceeds the fixed asset investment limitation of sixty (60) percent solely as a result of a decline in the bank's statutory capital base, the Department shall not deem the bank to be in violation of paragraph (2); provided, however, nothing herein shall be construed as permitting a bank to invest additional sums in fixed assets in excess of sixty (60) percent of the bank's statutory capital base without the prior written approval of the Department.

History

Authority: Ga. L. 1974, pp. 733, 789
History. Original Rule was filed on June 9, 1972; effective June 29, 1972.
Amended. Filed August 28, 1975; effective September 17, 1975.
Amended: F. Jun. 10, 2014; eff. Jun. 30, 2014.

Ga. Comp. R. & Regs. r. 80-1-10-.02 Purchase of Real Estate for Future Expansion; Letter Notification {#sec-ga.-comp.-r.-regs.-r.-80-1-10-.02 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-10-.02}

(1) Except as otherwise provided in this Rule, a bank may purchase real property for expansion purposes only with the prior written approval of the Department.

(2) Department approval shall be granted only in those cases where the applicant bank provides reasonable assurance that it plans to utilize the property as bank premises within five (5) years from the date of purchase and indicates the purpose for which the property is being acquired.

(3) The granting of approval to purchase property for future expansion shall in no way be considered as approving any future bank premises or the expansion program.

(4) The purchase of real property for expansion purposes may be made without the prior approval of the Department and by only a letter notification when:

(a) The real property is to be utilized as bank premises within five years of the date of purchase;

(b) The purchase of the real property does not result in the bank exceeding the fixed asset limitation;

(c) The bank is not subject to any special requirements whereby the Department requires prior approval for such purchases; and

(d) If an insider is involved, a certification is provided stating that all requirements of O.C.G.A. § 7-1-492 and the provisions of the Federal Reserve Board known as Regulation O have been met.

(5) The letter notification shall be received by the Department no later than thirty (30) days after the purchase of the property and shall state the date of purchase, purchase price, location of the property, and why the bank qualifies for letter notification under the provisions of this rule.

(6) Whether the bank received prior written approval or provided timely written notification of the purchase, the ability to hold property for future expansion shall expire five (5) years from the date of purchase unless the property is utilized as bank premises prior to that time. Banks holding property beyond the five year period must divest themselves of the property through sale unless the time limitation is extended by the Department.

History

Authority: O.C.G.A. §§ 7-1-61; 7-1-262
History. Original Rule entitled "Purchase of Real Estate for Future Expansion" was filed on June 9, 1972; effective June 29, 1972.
Amended: Filed August 28, 1975; effective September 17, 1975.
Amended: Rule retitled "Purchase of Real Estate for Future Expansion; Letter Notification." F. Aug. 26, 1997; eff. Sept. 15, 1997.
Amended: F. Jul. 14, 1998; eff. Aug. 3, 1998.
Amended: F. Oct. 2, 2025; eff. Oct. 22, 2025.

Ga. Comp. R. & Regs. r. 80-1-10-.03 Expansion of Existing Facilities {#sec-ga.-comp.-r.-regs.-r.-80-1-10-.03 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-10-.03}

(1) Expansion of bank premises may be performed by a bank without the prior approval of the Department of Banking and Finance wherever the ultimate and final cost of the expansion or extension will not result in a fixed asset investment by the bank in excess of the sixty (60) percent legal limitation and

(a) The proposed extension will be physically connected to the existing banking house, or

(b) The proposed extension will be located on the same contiguous area of property as the existing banking house, and

(2) Pneumatic tube equipment may not be considered as physically connecting banking facilities within the meaning of the Banking Code.

History

Authority: Ga. L. 1974, pp. 733, 789
History. Original Rule was filed on June 9, 1972; effective June 29, 1972.
Amended: Filed July 5, 1973; effective July 25, 1973.
Amended: Filed August 28, 1975; effective September 17, 1975.

Ga. Comp. R. & Regs. r. 80-1-10-.04 Relocation: Construction of New Facilities {#sec-ga.-comp.-r.-regs.-r.-80-1-10-.04 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-10-.04}

Any relocation or construction of new bank premises which will result in a change of the official street address of any bank, whether or not such change can be accomplished within the legal limitation on fixed asset investment, must have the prior approval of the Department of Banking and Finance.

History

Authority: Ga. L. 1974, pp. 733, 789
History. Original Rule was filed on June 9, 1972; effective June 29, 1972.
Amended: Filed August 28, 1975; effective September 17, 1975.

Ga. Comp. R. & Regs. r. 80-1-10-.05 Organization of Real Estate Holding Subsidiaries {#sec-ga.-comp.-r.-regs.-r.-80-1-10-.05 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-10-.05}

(1) With the prior approval of the Department of Banking and Finance, any bank may invest in all of the outstanding capital stock of a subsidiary corporation organized for the purpose of owning bank premises which might be legally owned by such bank and such investment shall be included as fixed assets in determining whether the bank's total investment in fixed assets is within the limitations prescribed by law.

(2) Such real estate holding subsidiaries shall not be permitted to own or otherwise invest its funds in Other Real Estate, furniture and fixtures other than for its own use, securities, or any other assets inconsistent with the purpose for which it was originally organized.

(3) Such real estate holding subsidiaries shall be subject to all of the limitations, prohibitions, and requirements with respect to the purchase, ownership, and expansion of bank premises that the bank would be subject to, except the limitation imposed on fixed asset investment, but provided that the Department of Banking and Finance may set such limitations on the total investment in fixed assets, the total authorized borrowings, the total capitalization, and the annual rental charges of the real estate holding subsidiary as it considers necessary to the sound operation of the company.

(4) Banks may invest in the stock of such corporations and such investments shall be included in determining the bank's legal limitation on investment in fixed assets.

(5) Such real estate holding subsidiaries shall be subject to examination by the Commissioner of Banking and Finance on the same basis as the parent corporation.

History

Authority: O.C.G.A. §§ 7-1-61; 7-1-262
History. Original Rule entitled "Organization of Real Estate Holding Company Subsidiaries" was filed on June 9, 1972; effective June 29, 1972.
Amended: Filed August 28, 1975; effective September 17, 1975.
Amended: Rule retitled "Organization of Real Estate Holding Subsidiaries." F. Jul. 12, 1999; eff. Aug. 1, 1999.
Amended: F. July 9, 2019; eff. July 29, 2019.

Ga. Comp. R. & Regs. r. 80-1-10-.06 Repealed and Reserved {#sec-ga.-comp.-r.-regs.-r.-80-1-10-.06 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-10-.06}

History

Authority: Ga. L. 1974, pp. 733, 849
History. Original Rule was filed on June 9, 1972; effective June 29, 1972.
Amended: Filed August 28, 1975; effective September 17, 1975.
Repealed: F. Sep. 18, 2012; eff. Oct. 8, 2012.

Ga. Comp. R. & Regs. r. 80-1-10-.07 Leasehold Interests in Fixed Assets {#sec-ga.-comp.-r.-regs.-r.-80-1-10-.07 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-10-.07}

Lease contracts covering land, buildings, or furniture, fixtures, and equipment which result in a bank obtaining title to the property at the expiration of the lease or at any time prior thereto for the payment of any moneys less than the fair market value of the property at time title is acquired shall be considered as fixed assets within the meaning of Georgia Law and this Regulation and shall be reflected on the books of the bank as such and an appropriate liability account similarly established.

History

Authority: Ga. L. 1974, pp. 733, 789
History. Original Rule was filed on June 9, 1972; effective June 29, 1972.
Amended: Filed August 28, 1975; effective September 17, 1975.

Ga. Comp. R. & Regs. r. 80-1-10-.08 Definitions {#sec-ga.-comp.-r.-regs.-r.-80-1-10-.08 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-10-.08}

(1) Fixed Asset Investment as used in this Regulation shall include land, buildings, furniture, fixtures, equipment, stock in a real estate holding company subsidiary, stock in cooperative parking facilities corporations, and loans to such subsidiary corporations and leasehold interests defined in 80-1-10-.07 above but shall not include Other Real Estate.

(2) Other Real Estate is real property conveyed to a bank in satisfaction of debt previously contracted in the course of its business and real property purchased at sales under judgments, decrees, or mortgage foreclosures under securities held by it; but a bank shall not bid, at any sale, a larger amount than sufficient to satisfy its debt, costs and expenses. Other Real Estate shall also include property originally acquired for future expansion, but for which such expansion plans have been abandoned and property formerly utilized as bank premises or for other approved purposes, but no longer utilized.

History

Authority: Ga. L. 1974, p. 733
History. Original Rule was filed on June 9, 1972; effective June 29, 1972.
Amended: Filed August 28, 1975; effective September 17, 1975.
Amended: Filed January 31, 1978; effective February 20, 1978.

Ga. Comp. R. & Regs. r. 80-1-10-.09 Assets Acquired - Debts Previously Contracted ("D.P.C.") {#sec-ga.-comp.-r.-regs.-r.-80-1-10-.09 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-10-.09}

(1) All assets acquired through foreclosure or in lieu of foreclosure and all "Other Real Estate" acquired in such manner or otherwise shall be valued six (6) months prior to or three (3) months following the acquisition by an independent appraiser knowledgeable in the fair market value of such assets or, in the alternative, evaluated by a qualified officer of the bank in conformity with the Evaluation Content portion of the Interagency Appraisal and Evaluation Guidelines (hereinafter "evaluation") if the book value of the property is less than two (2) percent of the statutory capital base of the bank, $400,000 for residential property, or $500,000 for commercial property whichever amount is greater. Appraisals or evaluations subsequent to the initial valuation are required if, based upon a review of the following factors, there is a reasonable basis to determine that the prior valuation is no longer reliable as a reasonable estimate of the property's fair market value: volatility of local market; changes in terms and availability of financing; natural disasters; limited or over supply of competing properties; improvements to the subject property or competing properties; lack of maintenance of the subject or competing properties; changes in underlying economic and market assumptions, such as capitalization rates and lease terms; changes in zoning, building materials, or technology; and environmental contamination. In the event there is no basis to determine that the initial valuation is no longer reliable, then appraisals or evaluations shall be at intervals of not more than five (5) years.

(2) All requests for permission to hold assets acquired through foreclosure or in lieu of foreclosure and to hold other types of "Other Real Estate" beyond limitations imposed by statute must include a statement as to efforts made to dispose of the asset, reasons for the failure of such efforts, plans for disposal of the asset during the extended ownership period, a copy of the most recent appraisal or evaluation, and a statement as to the estimated annual cost of carrying the asset and estimated annual income produced by the asset.

(3) Extension of statutory ownership periods will not be granted for income purposes.

(4) Property subject to this rule shall be initially carried on the books of the bank at the fair market value determined by independent appraisal or evaluation, unless otherwise provided, less the estimated costs to sell the property ("new basis"). This valuation shall be determined as of the date the bank takes legal title to or physical possession of the property, whichever event occurs first. Subsequently, the carrying value shall be subject to write-down or write-up based upon the most recent appraisal or evaluation. However, the property must be carried at the lower of the current fair market value less the estimated costs to sell the property or the new basis. The new basis may be adjusted upward in the event the bank makes any permanent capital improvements, subject to the limitations in paragraph (5), necessary to prepare the property for sale but the adjustment in the new basis shall be the lower of the increase in the fair market value of the property after the capital improvements or the amount expended to make the capital improvements. Non-capital improvements and expenses necessary to carrying and maintaining the property (taxes, legal fees, insurance, yard maintenance, etc.) shall be expenses and not added to the carrying value. Income earned from the property, other than from conversion or sale, shall be credited to income and shall not reduce the carrying value of the property.

(5) A bank may make permanent capital improvements to property subject to this rule if the improvements are:

(a) Reasonably calculated to reduce any shortfall between the property's fair market value and the bank's investment in the property;

(b) Not made for the purpose of speculation; and

(6) Appraisals or evaluations obtained pursuant to this rule shall be for the purpose of determining the current fair market value of the property. Appraisals found to reflect other than current fair market value or found to have been performed by persons unfamiliar with such class of property or lacking independence from the owner of such property may be rejected by the Department and new appraisals required. Evaluations found to reflect other than current fair market value or found to have been performed by persons unfamiliar with such class of property or lacking independence (where required) from the owner of such property may be rejected by the Department and new evaluations or appraisals required.

History

Authority: O.C.G.A. § 7-1-61
History. Original Rule was filed on January 31, 1978; effective February 20, 1978.
Amended: F. Mar. 3, 2011; eff. Mar. 23, 2011.
Amended: Title changed to "Assets Acquired - Debts Previously Contracted ("D.P.C.")." F. Jun. 10, 2014; eff. Jun. 30, 2014.
Amended: F. June 29, 2017; eff. July 19, 2017.
Amended: F. June 27, 2018; eff. July 17, 2018.
Amended: F. Jan. 8, 2021; eff. Jan. 28, 2021.

Ga. Comp. R. & Regs. r. 80-1-10-.10 Bank as a Lessor of Real Estate {#sec-ga.-comp.-r.-regs.-r.-80-1-10-.10 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-10-.10}

(1) Pursuant to O.C.G.A. § 7-1-262(a)(1) , a bank may acquire and hold real estate the bank occupies or intends to occupy primarily for the transaction of its business or the business of any subsidiary or affiliate. Subject to compliance with the provisions of this rule as well as the Department's prior written approval, a bank may lease excess real estate.

(2) For purposes of this rule, the phrase "occupy primarily" means occupation and use, on a full-time basis, of at least sixty-seven (67) percent of the square footage of each individual premise by the bank or an affiliate or subsidiary of the bank.

(3) The underlying real estate must have been acquired in good faith and for permissible purposes. Nothing herein shall be deemed to authorize a bank to acquire real estate for speculative purposes.

(4) The bank may not lease real estate to a third-party if it raises safety and soundness concerns.

(5) The application for approval to lease real estate to a third-party shall contain, at a minimum, the following information:

(a) A detailed description of the lease that is contemplated, including but not limited to, the terms of the lease, a description of the proposed lessee's operations, the relationship, if any, between the bank and the proposed lessee, the real estate that is proposed to be leased, and the percentage of the real estate that will be occupied by lessee;

(b) The total amount of the bank's fixed assets that will be leased in the event the lease is approved;

(c) An affirmative statement that there is no involvement by any director, committee member, officer or employee of the bank or any related interest of such individuals with the individual or entity that is the proposed lessee. In the event there is any such involvement, then it should be detailed in the application; and

(d) A copy of the resolution adopted by the Board of Directors authorizing the lease of the specific premises to the proposed lessee.

History

Authority: O.C.G.A. §§ 7-1-61, 7-1-262
History. Original Rule entitled "Bank as a Lessor of Real Estate" adopted. F. Jan. 8, 2021; eff. Jan. 28, 2021.
Amended: F. July 7, 2022; eff. July 27, 2022.

Subject 80-1-11 Public Disclosure of Information

Ga. Comp. R. & Regs. r. 80-1-11-.01 Public Access to Records {#sec-ga.-comp.-r.-regs.-r.-80-1-11-.01 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-11-.01}

The following records of the Department of Banking and Finance shall be subject to inspection by members of the public:

(a) Sections of accepted Applications for Charter, received applications for Branch Office, Relocation, Merger, Acquisition of Control of Financial Institutions, Holding Company formation, and Holding Company acquisition deemed to be non-confidential by the Department; provided, however, such non-confidential information will come within Section 80-1-11-.02 ninety (90) days after disposition has been made of the application; and

(b) The terms of or a copy of any bond filed with the Department by (1) mortgage licensees or registrants; (2) money services businesses; and (3) installment lenders.

History

Authority: O.C.G.A. § 7-1-61
History. Original Rule entitled "Public Access to Records" adopted. F. July 12, 1974; eff. August 1, 1974.
Amended: F. Aug. 28, 1975; eff. Sept. 17, 1975.
Repealed: New Rule of same title adopted. F. July 13, 1981; eff. August 2, 1981.
Amended: F. July 12, 1999; eff. August 1, 1999.
Amended: F. Oct. 22, 2001; eff. Nov. 11, 2001.
Amended: F. Aug. 15, 2007; eff. Sept. 4, 2007.
Amended: F. Nov. 20, 2007; eff. Dec. 10, 2007.
Amended: F. Sep. 18, 2012; eff. Oct. 8, 2012.
Amended: F. July 7, 2022; eff. July 27, 2022.

Ga. Comp. R. & Regs. r. 80-1-11-.02 Confidential Records {#sec-ga.-comp.-r.-regs.-r.-80-1-11-.02 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-11-.02}

(1) Consistent with Code Sections 7-1-70 and 7-1-1009 , the following records of the Department of Banking and Finance are declared to be in the nature of examination reports obtained by or for the confidential use of the Department in ascertaining the true condition of the bank or other regulated entity and, therefore, shall not be available for inspection except as specifically authorized by the Commissioner:

(a) Reports of Examination;

(b) Reports of Investigation of Applications to the Department;

(d) All correspondence, other records and documents not expressly made available by Rule 80-1-11-.01 .

(2) Any examination reports, reports of investigation or other information obtained from another supervisory or regulatory agency or from law enforcement shall be treated as the property of the provider and will not be available for inspection. Requests for such information should be made to the provider directly.

History

Authority: O.C.G.A. Secs. 7-1-61, 7-1-70
History. Original Rule entitled "Limited Access to Records" adopted. F. July 12, 1974; eff. August 1, 1974.
Amended: F. Aug. 28, 1975; eff. Sept. 17, 1975.
Repealed: New Rule entitled "Confidential Records" adopted. F. July 13, 1981; eff. August 2, 1981.
Amended: F. Dec. 18, 2000; eff. Jan. 7, 2001.
Amended: F. Oct. 22, 2001; eff. Nov. 11, 2001.
Amended: F. Aug. 4, 2008; eff. Aug. 24, 2008.

Ga. Comp. R. & Regs. r. 80-1-11-.03 Protection of Privacy {#sec-ga.-comp.-r.-regs.-r.-80-1-11-.03 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-11-.03}

To the extent necessary to prevent an invasion of personal privacy, the Commissioner may delete identifying details from documents described in this chapter. In each case of such deletion, the justification therefor will be clearly explained in writing.

History

Authority: Ga. L. 1974, pp. 733, 736-738
History. Original Rule entitled "Confidential Records" was filed on July 12, 1974; effective August 1, 1974.
Amended: Filed August 28, 1975; effective September 17, 1975.
Amended: Rule amended and renumbered as 80-1-11-.02, and Rule 80-1-11-.04, entitled "Protection of Privacy," renumbered as 80-1-11-.03. Filed July 13, 1981; effective August 2, 1981.

Ga. Comp. R. & Regs. r. 80-1-11-.04 Request for Records {#sec-ga.-comp.-r.-regs.-r.-80-1-11-.04 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-11-.04}

(1) Requests for copies of records must be in writing and must state the name of the person for whom the records are being sought and the purpose for which the records are to be used.

(2) Requests for copies of records believed to be for fraudulent, anticompetitive, or other illegitimate purposes shall be denied.

(3) The bank whose records are requested shall be notified of the request and disposition of same.

History

Authority: Ga. L. 1974, p. 733
History. Original Rule entitled "Protection of Privacy" was filed on July 12, 1974; effective August 1, 1974.
Amended: Filed on August 28, 1975; effective September 17, 1975.
Amended: Rule amended and renumbered as 80-1-11-.03, and Rule 80-1-1 1-.05, entitled "Request for Records," amended and renumbered as 80-1-11-.04. Filed July 13, 1981; effective August 2, 1981.
Amended: F. Oct. 12, 1989; eff. Nov. 1, 1989.

Ga. Comp. R. & Regs. r. 80-1-11-.05 Repealed {#sec-ga.-comp.-r.-regs.-r.-80-1-11-.05 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-11-.05}

History

Authority: O.C.G.A. § 7-1-61
History. Original Rule entitled "Request for Records" adopted. F. July 12, 1974; eff. August 1, 1974.
Amended: F. Aug. 28, 1975; eff. Sept. 17, 1975.
Repealed: F. July 13, 1981; eff. August 2, 1981.
Amended: New Rule entitled "Annual Disclosure Statements by Banks" adopted. F. Sept. 26, 1995; eff. Oct. 16, 1995.
Amended: F. July 22, 1999; eff. August 1, 1999.
Amended: F. June 20, 2016; eff. July 10, 2016.
Amended: F. July 7, 2023; eff. July 27, 2023.
Repealed: F. July 12, 2024; eff. Aug. 1, 2024.

(1) When necessary or appropriate for business purposes, a financial institution, or any director, officer, or employee thereof, may disclose information contained in, or related to, reports of examination issued by the Department, to a person or organization officially connected with the financial institution as officer, director, or employee or as an external accountant, attorney, or consultant. A financial institution or a director, officer, or employee may make such disclosure if the external accountant, attorney, or consultant is under a written contract to provide services to the financial institution and the external accountant, attorney, or consultant has a written agreement with the financial institution in which the external accountant, attorney, or consultant:

(a) States its awareness of, and agreement to maintain the confidentiality of the disclosed information as required by O.C.G.A. §§ 7-1-67 and 7-1-70 ; and

(b) Agrees not to use the disclosed information for any purpose other than as provided under its contract to provide services to the financial institution.

(2) The requirements for written contractual acknowledgements and agreements shall not apply if the recipient of the disclosed information is subject to independent ethical standards to maintain the confidentiality of such information

History

Authority: O.C.G.A. §§ 7-1-61; 7-1-70
History. Original Rule entitled "Sharing Confidential Supervisory Information" adopted. F. June 27, 2018; eff. July 17, 2018.

Subject 80-1-12 Dividends, Management Fees, Etc

Ga. Comp. R. & Regs. r. 80-1-12-.01 Dividends {#sec-ga.-comp.-r.-regs.-r.-80-1-12-.01 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-12-.01}

(1) The Board of Directors of any state-chartered bank in this State may declare and the bank may pay dividends on its outstanding capital stock without any requirement to notify the Department or request the approval of the Department under the following conditions:

(a) Total adversely classified assets at the most recent examination of the bank, the conclusions of which may have been presented to the Board of Directors, do not exceed eighty (80) percent of Tier 1 Capital plus the allowances for credit losses as reflected at such examination; and

(b) The aggregate amount of dividends declared or anticipated to be declared in the calendar year:

(i) does not exceed fifty (50) percent of the net income that is attributable to the bank that is a Subchapter C-Corporation for the previous calendar year as reported on the Consolidated Reports of Income, Schedule RI-Income Statement; or

(ii) does not exceed seventy-five (75) percent of the net income that is attributable to the bank that is a Subchapter S-Corporation for the previous calendar year as reported on the Consolidated Reports of Income, Schedule RI-Income Statement; and

(2) Any dividend to be declared by the Board of Directors of a bank at a time when each of the foregoing conditions does not exist must be approved, in writing, by the Department prior to the payment thereof pursuant to the provisions of Section 7-1-460(a)(3) of the Code of Georgia. Requests for approval of dividends shall be on forms prescribed by the Department.

(3) The definition of Tier 1 Capital and Average Total Assets as used herein shall be consistent with the definition utilized by the Federal Regulatory Agencies.

History

Authority: O.C.G.A. §§ 7-1-61, 7-1-460
History. Original Rule entitled "Dividends" adopted. F. May 1, 1975; eff. May 21, 1975.
Repealed: New Rule of the same title adopted. F. Mar. 23, 1982; eff. Apr. 12, 1982.
Amended: F. July 14, 1998; eff. August 3, 1998.
Amended: F. Dec. 18, 2000; eff. Jan. 7, 2001.
Amended: F. Aug. 29, 2014; eff. Sept. 18, 2014.
Amended: F. Jan. 8, 2021; eff. Jan. 28, 2021.
Amended: F. July 7, 2021; eff. July 27, 2021.
Amended: F. July 7, 2022; eff. July 27, 2022.

Ga. Comp. R. & Regs. r. 80-1-12-.02 Intercompany Dealings, Management Fees {#sec-ga.-comp.-r.-regs.-r.-80-1-12-.02 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-12-.02}

(1) No bank or trust company shall purchase, lease, or sell any asset or service from or to any affiliate upon terms which are detrimental to the bank or trust company or any minority shareholders of the bank or trust company. Methods for determining propriety of a transaction shall be subject to Departmental oversight and review.

(2) Tax payments by a bank or trust company to a bank holding company shall generally be consistent with the payment of tax liabilities which would have been made had it filed tax returns as a separate entity, eliminating any benefit arising from surtax exemptions. Timing of such payments should generally be in concert with tax payment dates prescribed by tax regulations for estimated tax payments and the rendering of final returns.

(3) Management fees and other charges:

(a) Management fees and other charges, other than specific charges for reimbursement of tax payments or for the purchase or lease of assets or services, payable to a bank holding company or an affiliate of a bank holding company may be paid by the banking or trust subsidiary provided such fees and charges do not exceed the subsidiary's pro rata share of the administrative overhead of the bank holding company plus any direct expenses attributable to the subsidiary and it is clearly demonstrated that the subsidiary has received direct benefit from its relationship with the holding company. Such pro rata share shall be determined through an equitable proration of such administrative overhead among all holding company subsidiaries and activities. The proration may be based on any reasonable formula provided such formula is justified by appropriate memorandum in the files of the bank or trust company and approved by the Board of Directors of the bank or trust company. Such formula shall be subject to Departmental oversight and review.

(b) Administrative overhead shall include only those expenses incurred in general support of all holding company activities and not specifically allocable to a particular subsidiary or activity.

(c) Administrative overhead shall not include net losses incurred in any holding company activity, subsidiary, or investment; nor shall the term include any closing costs, interest, service charge or other expense incurred in connection with any debt owed by the holding company. Administrative overhead shall also not include any salary or other compensation of officers, directors or shareholders which is not commensurate with duties and responsibilities performed in some official capacity with the holding company. Time devoted to performance of duties and fulfilling responsibilities at the holding company level and compensation in connection with such action shall be considered in establishing reasonable levels of compensation from the bank or trust company for persons who are employed by both entities. Each entity shall pay only that portion of the total compensation as is commensurate with the duties performed on behalf of that entity.

(4) Fees and charges contemplated under this Rule may be paid after the liability therefor is incurred. Administrative overhead may be accrued or paid monthly based upon a reasonable projection of actual charges, provided such accrual or payment is adjusted to actual expenses at least annually. No such fee or charge may be paid in advance. Appropriate documentation and justification must be maintained in the bank for any disbursement governed by this Rule.

History

Authority: Ga. L. 1974, p. 733; 1976, p. 175
History. Original Rule entitled "Dividends" adopted. F. May 1, 1975; eff. May 21, 1975.
Repealed: New Rule of the same title adopted. F. Mar. 23, 1982; eff. Apr. 12, 1982.
Amended: F. July 14, 1998; eff. August 3, 1998.
Amended: F. Dec. 18, 2000; eff. Jan. 7, 2001.
Amended: F. Nov. 7, 2013; eff. Nov. 27, 2013.

Ga. Comp. R. & Regs. r. 80-1-12-.03 Repealed {#sec-ga.-comp.-r.-regs.-r.-80-1-12-.03 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-12-.03}

History

Authority: Ga. L. 1974, p. 733; Ga. L. 1976, p. 175
History. Original Rule entitled "Banks Acting as Agents for Affiliated Banks" adopted. F. Oct 12, 1989; eff. November 1, 1989.
Repealed: F. Sept 26, 1995; eff. October 16, 1995.

Subject 80-1-13 Correspondent Funds

Ga. Comp. R. & Regs. r. 80-1-13-.01 Definitions {#sec-ga.-comp.-r.-regs.-r.-80-1-13-.01 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-13-.01}

(1) Correspondent (or Federal) Funds shall mean excess funds of one financial institution placed with another financial institution at interest and subject to immediate withdrawal. Funds shall include "unsecured day(s) funds".

(2) For purposes of this Rule,"financial institution" shall mean any of the following:

(a) A state or federally chartered bank;

(b) A state or federally chartered savings and loan association;

(d) A foreign banking institution holding a state or federal license to maintain a branch or agency in any state of the United States.

History

Authority: Ga. L. 1974, pp. 705, 733, 793; Ga. L. 1981, H.B. 822
History. Original Rule entitled "Definitions" was filed and effective on June 27, 1975, as Emergency Rule 80-1-13-0.3-.01, to remain in effect for 120 days.
Amended: Permanent Rule entitled "Definitions" adopted replacing Emergency Rule 80-1-13-0.3-.01. Filed August 28, 1975; effective September 17, 1975.
Amended: Rule repealed and a new Rule of the same title adopted. Filed July 13, 1981; effective August 2, 1981.
Amended: F. June 20, 2016; eff. July 10, 2016.

Ga. Comp. R. & Regs. r. 80-1-13-.02 Status of Accounts {#sec-ga.-comp.-r.-regs.-r.-80-1-13-.02 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-13-.02}

(1) Correspondent Funds Placed (Sold) shall not be considered to be extensions of credit but shall have the same status as a deposit provided the funds are withdrawable on demand and are unsecured.

(2) Correspondent Funds Held (Purchased) shall not constitute borrowings, but shall have the same status as depositors of the financial institution receiving such funds provided the recipient financial institution does not pledge its assets to secure funds and such funds may be withdrawn upon demand.

History

Authority: Ga. L. 1974, pp. 705, 733, 793-795, 801-802
History. Original Rule entitled "Status of Accounts" was filed and effective on June 27, 1975, as Emergency Rule 80-1-13-0.3-.02, to remain in effect for 120 days.
Amended: Permanent Rule adopted replacing Emergency Rule 80-1-13-0.3-.02. Filed August 28, 1975; effective September 17, 1975.
Amended: Rule repealed and a new Rule of the same title adopted. Filed July 13, 1981; effective August 2, 1981.

Ga. Comp. R. & Regs. r. 80-1-13-.03 Approval of Board of Directors {#sec-ga.-comp.-r.-regs.-r.-80-1-13-.03 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-13-.03}

No correspondent Funds may be placed (sold) with another financial institution in excess of fifteen (15) percent of the placing (selling) financial institution's statutory capital base without the prior approval of the recipient by the Board of Directors, or a committee thereof, of the placing or selling institution; provided however, the selection of a financial institution by the Board of Directors pursuant to the provisions of Section 7-1-370 to be a depository of a bank's funds shall constitute approval of that institution as the recipient of placed (sold) Correspondent Funds.

History

Authority: Ga. L. 1974, pp. 705, 733, 793; Ga. L. 1981, H.B. 822; Ga. L. 1983, Act No . 255, effective March 16, 1983
History. Original Rule entitled "Approval of Board of Directors" was filed on July 13, 1981; effective August 2, 1981.
Amended: Filed August 17, 1983; effective September 6, 1983.

Subject 80-1-14 Audits

Ga. Comp. R. & Regs. r. 80-1-14-.01 Independent Audits {#sec-ga.-comp.-r.-regs.-r.-80-1-14-.01 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-14-.01}

(1) Every bank shall have an audit of its books and records performed at least annually by independent public accountants in accordance with generally accepted auditing standards. The audit must be of sufficient scope to enable the auditor to render an opinion on the financial statements of the bank or consolidated holding company. Such audit shall include a review of the bank's internal controls and such other tests and reviews of bank records as deemed appropriate by the independent auditor, including verifications of the bank's loan and deposit accounts, review of fiduciary activities (pursuant to agreed-upon procedures) accounts held in a fiduciary capacity, and adequate testing and review of the bank's information technology activities. The extent of audit work should be clearly defined in engagement letters. Such letters should discuss the scope of the audit, the objectives, resource requirements, audit timeframe, and resulting reports. Independent Public Accountants must make their audit work papers, policies, and procedures available to Department examiners for review upon request.

(2) Audit reports in which the auditor expresses an unqualified opinion shall be provided to the Department upon request. Audit reports in which the auditor expresses anything other than an unqualified opinion, including, but not limited to, a qualified opinion, an adverse opinion, or a disclaimer of opinion, shall be provided to the Department within fifteen (15) days following receipt by the financial institution. Audit reports submitted to the Department shall be accompanied by the Letter to Management, if applicable, detailing any reportable conditions discovered during the audit engagement. Failure to obtain the required opinion audit, or the auditor's report thereof, shall be reported to the Department within fifteen (15) days of discovery.

History

Authority: O.C.G.A. § 7-1-61
History. Original Rule entitled "Minimum Standards for Internal Audit" adopted. F. Aug. 28, 1975; eff. Sept. 17, 1975.
Amended: F. Nov. 17, 1986; eff. Dec. 7, 1986.
Repealed: New Rule entitled "Independent Audits" adopted. F. Jan. 27, 1995; eff. Feb. 16, 1995.
Amended: F. July 12, 1999; eff. August 1, 1999.
Amended: F. Aug. 22, 2006; eff. Sept. 11, 2006.
Amended: F. June 29, 2017; eff. July 19, 2017.

Ga. Comp. R. & Regs. r. 80-1-14-.02 Internal Audit Program {#sec-ga.-comp.-r.-regs.-r.-80-1-14-.02 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-14-.02}

(1) An institution shall have an internal audit program that is appropriate to the size of the institution and the nature and scope of its activities. An appropriate internal audit program consists of qualified persons and provides for effective:

(a) Monitoring and reporting on the system of internal controls;

(b) Testing and review of controls over information systems;

(d) Verifying and reviewing of management actions to address material weaknesses; and

(e) Engagement and oversight by the institution's Board of Directors.

(2) The Board of Directors shall name an internal auditor or designate an employee, which includes an officer, or independent director to act as a liaison with third parties engaged to perform the internal audit program.

(3) The Board of Directors shall review and approve the scope of the internal audit program to include the operational areas targeted for review, the proposed timeline of reviews, testing procedures to be used, the qualifications of personnel for the subject matter to be reviewed, and the independence of personnel from operational responsibilities over areas to be reviewed. Alternatively, a committee formed in compliance with O.C.G.A. § 7-1-483(b)(2) , is authorized to act in lieu of the Board of Directors. The scope of the internal audit will be documented - via an engagement letter when third parties are engaged - and provided to the Department upon request.

(4) The internal auditor or designated liaison shall:

(a) Implement or oversee implementation of the institution's internal audit program;

(b) Monitor the implementation of corrective actions; and

(c) Report to the Board of Directors at least annually on the status of the internal audit program to include audit activities, findings, and corrective actions.

(5) The internal audit shall be appropriate to the size of the institution and the nature and scope of its activities. In determining the nature and scope of the internal audit, the financial institution shall take into consideration the auditing standards formulated by The Auditing Standards Board of the AICPA, the Public Company Accounting Oversight Board ("PCAOB"), and/or the Institute for Internal Auditors. Internal audit reports shall be sent directly from the internal auditor to all independent directors of the Board of Directors, all independent directors of the audit committee, or an independent director that acts as chair of the Board of Directors or audit committee.

(6) Unless pre-approved by the Department in writing, the external audit obtained pursuant to O.C.G.A. § 7-1-487 and Rule 80-1-14-.01 will not satisfy the internal audit program requirement.

(7) In the event the Department determines that an internal audit program is deficient, the Department may require the institution to:

(a) Replace the internal auditor with an individual acceptable to the Department;

(b) Perform additional reviews by personnel acceptable to the Department with subject matter expertise on, and independence from, the areas targeted for review; and

(c) Engage a third-party acceptable to the Department to perform a comprehensive review of the adequacy of the institution's internal control environment in accordance with a standard acceptable to the Department.

History

Authority: O.C.G.A. § 7-1-61
History. Repealed: New Rule entitled "The Internal Auditor" adopted. F. Jan. 27, 1995; eff. Feb. 16, 1995.
Amended: New title "Internal Audit Program." F. July 9, 2019; eff. July 29, 2019.
Amended: F. June 18, 2025; eff. July 8, 2025.

Ga. Comp. R. & Regs. r. 80-1-14-.03 Repealed {#sec-ga.-comp.-r.-regs.-r.-80-1-14-.03 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-14-.03}

History

Authority: Ga. L. 1974, pp. 733, 960
History. Original Rule entitled "Reporting Requirements" adopted. F. Aug. 28, 1975; eff. Sept. 17, 1975.
Repealed: F. Oct. 18, 1988; eff. Nov. 7, 1988.

Subject 80-1-15 Extensions of Existing Offices and Facilities

Ga. Comp. R. & Regs. r. 80-1-15-.01 Automated Teller Machine ("ATM") and Night Depository {#sec-ga.-comp.-r.-regs.-r.-80-1-15-.01 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-15-.01}

An ATM machine, which by definition in O.C.G.A. § 7-1-603 takes deposits, and a night depository may be established anywhere in this state. Establishment of an ATM machine in this state does not constitute doing a banking business here.

History

Authority: O.C.G.A. § 7-1-61
History. Original Rule entitled "Emergency Acquisitions and Consolidations Involving a Financial Institution in Danger of Failing or a Failed Financial Institution" adopted as ER. 80-1-15-0.5-.01. F. June 30, 1978; eff. June 29, 1978, the date of adoption.
Amended: ER. 80-1-15-0.7-.01 adopted. F. Jan. 9, 1979; eff. Jan. 4, 1979, the date of adoption.
Amended: ER. 80-1-15-0.8-.01 adopted. F. and eff. Mar. 17, 1981, the date of adoption.
Amended: ER. 80-1-15-0.9-.01 adopted. F. June 1, 1983; eff. May 31, 1983, the date of adoption.
Amended: New Rule entitled "Definitions" adopted. F. July 7, 1988; eff. July 27, 1988.
Amended: Rule retitled "Automated Teller Machine ("ATM")". F. Sept. 26, 1995; eff. Oct. 16, 1995.
Amended: Rule retitled "Automated Teller Machine ("ATM") and Night Depository". F. Aug. 26, 1997; eff. Sept. 15, 1997.
Amended: F. July 28, 2003; eff. August 17, 2003.
Amended: F. Sept. 1, 2004; eff. Sept. 21, 2004.
Amended: F. Jan. 8, 2021; eff. Jan. 28, 2021.
Amended: F. July 7, 2022; eff. July 27, 2022.

Ga. Comp. R. & Regs. r. 80-1-15-.02 Mobile Banking Units {#sec-ga.-comp.-r.-regs.-r.-80-1-15-.02 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-15-.02}

(1) Banks may provide unlimited banking services through mobile banking units that do not have a single, permanent site and use a vehicle that travels to various locations to enable customers to conduct the business of banking.

(2) A mobile branch may provide banking services at various regularly scheduled locations or it may be open in a defined area at varying times and locations. If the mobile branch provides banking services at regularly scheduled locations, then it shall be accessible to banking customers in accordance with a published schedule available on the bank's website. In all circumstances, each mobile branch is required to maintain logs indicating the specific locations and times in which the mobile unit is operating in order to track branch activities.

(3) Each bank providing mobile banking unit services shall carry adequate fidelity, robbery, and hazard insurance coverage commensurate with the risks associated with the operation of such units.

(4) Disclosures shall be given to all customers regarding when deposits will be credited and when checks or other withdrawals will be debited.

(5) Since a mobile unit will function as a branch, application for approval must be made as it is for all other branches.

(6) Banks may alter the banking service area set forth in paragraph 2 of this Rule by submitting advance written notification to the Department.

History

Authority: O.C.G.A. § 7-1-602
History. Original Rule entitled "Procedures" adopted as ER. 80-1-15-0.7-.02. F. Jan. 9, 1979; eff. Jan. 4, 1979, the date of adoption.
Amended: ER. 80-1-15-0.8-.02 adopted. F. and eff. Mar. 17, 1981, the date of adoption.
Amended: New Rule entitled "Mobile Banking Units" adopted. F. July 7, 1988; eff. July 27, 1988.
Amended: F. Aug. 26, 1997; eff. Sept. 15, 1997.
Amended: F. July 14, 1998; eff. August 3, 1998.
Amended: F. July 12, 1999; eff. August 1, 1999.
Amended: F. July 9, 2019; eff. July 29, 2019.
Amended: F. Jan. 8, 2021; eff. Jan. 28, 2021.

Ga. Comp. R. & Regs. r. 80-1-15-.03 Messenger Services {#sec-ga.-comp.-r.-regs.-r.-80-1-15-.03 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-15-.03}

(1) For purposes of this Rule, the below terms shall be defined as follows:

(a) "Branching" shall mean the receipt of deposits, payment of checks, or lending of money.

(b) "Messenger service" shall mean any service used by a bank and its customers to pick up from and deliver to, specific customers at locations such as their homes or offices, items related to transactions between the bank and such customers.

(2) Banks may establish and operate a messenger service or use, with its customers, a third-party messenger service. Banks may use the messenger service to transport items related to the bank's transactions with its customers without the messenger service being approved as a branch provided that the messenger service does not perform any branching functions. In establishing or using such a messenger service, a bank must establish terms and conditions in order to ensure compliance with this Rule and safe and sound banking practices.

(3) Banks may use, with its customers, a messenger service to pick up from, and deliver to, customers items related to branching functions without the messenger service being approved as a branch so long as the messenger service is established and operated by a third-party. Under no circumstance will such messenger service be authorized to perform branching functions. In using such a messenger service, the bank must establish terms and conditions in order to ensure compliance with this Rule and safe and sound banking practices.

(4) The Department will review the facts and circumstances and determine whether a messenger service is established by a third-party. However, a messenger service will always be established by a third party if:

(a) A party other than the bank owns the messenger service and its facilities (or rents these from a party other than the bank), and who employs the personnel engaged in the provision of the service;

(b) The party retains ultimate discretion as to the limits of the geographic area and the customers it will serve;

(d) The party operates under a separate name from the bank and does not advertise the service as being provided by the bank;

(e) The party assumes full responsibility for all items in transit, including the provision of adequate insurance to cover employee fidelity and any other losses while items are in the custody and control of the party; and

(f) The party acts as the agent for the customer while the items are picked-up, transported, and delivered.

(5)

(a) The bank may defray all or part of the costs incurred by the customer for use of the messenger service, consistent with safety and soundness and prudent fiscal policy. Any payment by the bank may not exceed the actual charge for the services rendered.

(b) The bank shall deem items for deposit to be received by the bank at the time they are credited to the customer's account at the bank or a branch office.

(6) Banks may provide messenger services for the pick-up and delivery of items related to or not related to branching. They may do so by establishing their own service or by use of a third-party service. Such services may be provided anywhere and will not be considered branching.

History

Authority: O.C.G.A. §§ 7-1-61; 7-1-602
History. Original Rule entitled "Courier Services" adopted. F. July 7, 1988; eff. July 27, 1988.
Amended: F. Sept. 26, 1995; eff. Oct. 16, 1995.
Amended: F. July 12, 1999; eff. August 1, 1999.
Amended: F. Aug. 15, 2007; eff. Sept. 4, 2007.
Amended: New title "Messenger Services." F. Jan. 8, 2021; eff. Jan. 28, 2021.

Ga. Comp. R. & Regs. r. 80-1-15-.04 Account Service Representatives {#sec-ga.-comp.-r.-regs.-r.-80-1-15-.04 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-15-.04}

Banks lawfully doing a banking business in Georgia may provide for account service representatives to visit public events and commercial locations including governmental, educational, and health facilities for the purpose of opening deposit accounts and providing services incidental thereto; provided, access to such locations and facilities is available to other financial institutions on a nondiscriminatory basis. Account paying and receiving services may not be provided during such visits other than an initial deposit to a new account.

History

Authority: O.C.G.A. § 7-1-602
History. Original Rule entitled "Account Service Representatives" adopted. F. July 7, 1988; eff. July 27, 1988.
Amended: F. Aug. 26, 1997; eff. Sept. 15, 1997.
Amended: F. Jan. 8, 2021; eff. Jan. 28, 2021.

Ga. Comp. R. & Regs. r. 80-1-15-.05 School Savings and Banking Education Programs {#sec-ga.-comp.-r.-regs.-r.-80-1-15-.05 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-15-.05}

Banks lawfully doing a banking business in Georgia may participate in school savings and banking education programs, where such programs: are provided for minors in order to promote thrift or to provide banking and financial education; are supervised by a school official or an organization affiliated with the school on school premises or at a facility utilized by the school; and are in a location where the bank would otherwise be authorized to have a branch. School savings program deposits are not considered received until they have been delivered to a representative of and at the participating bank. Under a school savings program, checks are not considered paid until received by the participating bank either directly or through a messenger acting as agent for the customer. These programs shall not be considered a branch office, provided the above provisions are met.

History

Authority: O.C.G.A. §§ 7-1-241; 7-1-261
History. Original Rule entitled "School Savings and Banking Education Programs" adopted. F. July 14, 1998; eff. August 3, 1998.
Amended: F. Jan. 8, 2021; eff. Jan. 28, 2021.

Ga. Comp. R. & Regs. r. 80-1-15-.06 Representative Offices {#sec-ga.-comp.-r.-regs.-r.-80-1-15-.06 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-1-15-.06}

(1) A bank or bank holding company chartered by the Department or a subsidiary of such bank or bank holding company may establish and maintain representative offices upon registering such locations with the Department.

(2) A representative office shall be staffed and accessible to the public.

(3) A representative office may not engage in the banking business which includes, but is not limited to, accepting deposits, opening deposit or savings accounts, paying withdrawals, drafts, or checks, disbursing loan proceeds to the borrower, or accepting payments.

(4) The combination of representative offices with other facilities such as an automatic teller machine or cash dispensing machine is permitted.

(5) In the event a bank or bank holding company chartered by the Department or a subsidiary of such bank or bank holding company closes a representative office, notice must be provided to the Department prior to the closure in compliance with Rule 80-1-1-.08 .

History

Authority: O.C.G.A. §§ 7-1-61, 7-1-591
History. Original Rule entitled "Representative Offices" adopted. F. July 7, 2022; eff. July 27, 2022.
Amended: F. July 12, 2024; eff. Aug. 1, 2024.

Chapter 80-2 Credit Unions

Subject 80-2-1 Books and Records

Ga. Comp. R. & Regs. r. 80-2-1-.01 General Requirements for Accounting Procedures {#sec-ga.-comp.-r.-regs.-r.-80-2-1-.01 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-1-.01}

(1) A credit union is required to maintain its books of account in accordance with Generally Accepted Accounting Principles, including a complete and accurate account of:

(a) All of its assets, whether in its name or in the name of another person;

(b) All of its liabilities, its borrowings, and any security interests in its assets; and

(2) Each credit union shall, by the end of each month, prepare a financial statement reflecting its position and operations of the preceding month. This statement, to be prepared from the accounts of the general ledger of the credit union, shall include a complete report of the credit union's earnings, setting forth in detail all items of income and expense. In the event the credit union shall become aware of a misstatement in a financial statement, then the credit union must amend the financial statement in a timely manner. A notice, which the credit union shall at all times display, shall be posted in a public area of its main office and each branch office as well as any credit union website, informing its members that the monthly financial statement may be examined, upon request of a member, at each office of the credit union and/or on the credit union's website. The notice shall include at a minimum, directions as to who to contact to view the statement.

(3) Each credit union shall file with the Department a complete report of its condition as of the last business day in March, June, September and December of each calendar year and at such other dates as the Commissioner may determine. Such reports shall be filed no more than thirty (30) days after the close of the applicable accounting period. Each such report shall be on forms required by the Department and shall be attested as provided on the form.

History

Authority: O.C.G.A. §§ 7-1-61, 7-1-663
History. Original Rule entitled "Retention of Records of Credit Unions" adopted. F. and eff. June 30, 1965.
Repealed: New Rule entitled "General Requirements for Accounting Procedures" adopted. F. June 17, 1976; eff. July 7, 1976.
Amended: F. July 13, 1981; eff. August 2, 1981.
Amended: F. Aug. 17, 1983; eff. Sept. 6, 1983.
Repealed: New Rule of same title adopted. F. Oct. 12, 1989; eff. Nov. 1, 1989.
Amended: F. July 28, 2003; eff. August 17, 2003.
Amended: F. June 27, 2018; eff. July 17, 2018.
Amended: F. July 7, 2023; eff. July 27, 2023.

Ga. Comp. R. & Regs. r. 80-2-1-.02 Minimum Requirements for Books and Records {#sec-ga.-comp.-r.-regs.-r.-80-2-1-.02 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-1-.02}

(1) In addition to the requirements otherwise set forth herein, the following subsidiary records must be maintained:

(a) Securities Register - shall contain a record of all securities, certificates of deposit, commercial paper, acceptances, and other investments bought or sold, showing date of transaction, proper name of the security, interest rate, maturity date, par value, purchase price, book value, schedule of amortization of premium and accretion of discounts, and location where the security is held.

(b) Loan Ledgers -

credit unions shall maintain a record of the direct and indirect liability of each member;
where a credit union elects to maintain installment loans separately from other direct loans of a borrower and does not include them on the Liability Ledger above, they may be maintained in a separate ledger with payments being posted directly thereto. Such ledger must reflect any and all modifications to the terms of the original note contract which may be granted from time to time, i.e., adjustments of the due date or amount of payments;
such record may be maintained in whatever order desired by management, i.e., alphabetical, numerical, class of loan, except where they are not maintained alphabetically, a cross-reference file must be maintained.

(c) Deposit Ledgers - credit unions must maintain separate deposit records for each general ledger segregation of deposits. Such record must contain a continuing itemized record of all deposits and withdrawals. Deposits will be segregated into no fewer than the following categories: Transaction or Share Draft Accounts, Savings Deposits, Christmas Savings, and Member Deposit Certificates. Deposit records must be posted daily wherever the credit union offers transaction or share draft accounts; provided, a credit union may defer business conducted on Saturday for posting on the next business day. Such record may be maintained in whatever order desired by management; i.e., alphabetical, numerical, class of deposit, except where they are not maintained alphabetically, a cross-reference file must be maintained.

(d) Income and Expense Register - a detailed record of income and expenses must be maintained. Expenses are to be recorded in such detail as to clearly describe each expense; i.e., supplies, rent, salaries, etc.

(e) Cash Items Register - a daily listing must be maintained of all cash items held which shows the maker on the item, last endorser, date acquired, amount, and reason held. The register may be maintained on a decentralized basis at each of the credit union's operating offices. The current register shall be reviewed by the Board of Directors at least monthly. For purposes of this Rule, Cash Items shall include any item received by a credit union and paid but for which reimbursement by the maker or endorser is not made before the end of the next business day following the date in which the item is received, except such items as are customarily held by the credit union for settlement with its member, whether maker or endorser on the item, not less frequently than weekly. Where the item is held beyond the regular settlement date, it shall be considered as a Cash Item within the definition of this Rule. In addition to the foregoing, Cash Items and the register thereof shall include such other items as the Board of Directors shall from time to time determine.

(f) Charged-Off Assets - all charge-offs, including loans, must be approved by the Board of Directors and such approvals recorded in the minute book. A permanent record of all charge-offs and recoveries thereon must be maintained. When a recovery is made on an asset that has been charged off, the funds are to be credited to the regular reserve and applied to the account that was charged off.

(g) Safekeeping Register - a register must be maintained of all items held for safekeeping by a credit union for its members other than items maintained in a safe deposit box under the sole control of the member. The register should describe the item fully, show the name of the owner, date received, and the number of the receipt given to the member. When the item is returned to the member, the receipt must be secured by the credit union, signed by the member stating that he has received the item that was held for safekeeping. The receipt must then be maintained with the safekeeping register.

(h) Reconcilement Records - the Audit Committee shall reconcile correspondent account statements monthly or shall verify for accuracy reconcilements made by others. A copy of each reconcilement shall be filed in chronological order and kept as a record. The Audit Committee may delegate this responsibility to an internal auditor provided such person has no authority to sign on the account or to initiate or post entries to the general ledger.

(i) Overdrafts - a record of all overdrawn deposit accounts shall be maintained. Such record shall contain the name of the account holder, the amount of the overdraft, and the date the overdraft originated. The most current record shall be approved by the Credit Committee or, in lieu thereof, by the board of directors of the credit union at least monthly, and such approval shall be recorded in the minutes of the meeting at which the action was taken. Overdrafts of less than $1,000, other than overdrafts on the accounts of officers, and directors may be aggregated and reported in lump sum.

(2) All subsidiary records maintained in support of General Ledger accounts must be balanced back to the General Ledger control balance at least monthly. After balancing at the end of each month on all accounts segregated in the general ledger, the balances and the amounts shown in the general ledger of those accounts and the reconcilement of differences, if any, must be recorded in the Trial Balance Log. The date and the initials of the person running the trial balance must be entered in the log.

(3) Information required to be maintained pursuant to this Rule may be in written form or available subject to access upon computer query. If available, subject to query access, a written record of such information shall be produced at least monthly.

(4) Where a credit union has net worth of $5,000,000 or more, review by the Board of Directors as required in paragraphs (1)(e), (1)(f), and (1)(i) above, may be delegated to a specific officer or department of the credit union where such delegation is recorded in the minutes of the Board of Directors. A properly constituted member of the Board of Directors may perform this function for the full Board of Directors regardless of the size of the credit union.

History

Authority: O.C.G.A. §§ 7-1-61; 7-1-663
History. Original Rule entitled "Minimum Requirements for Books and Records" adopted. F. June 17, 1976; eff. July 7, 1976.
Amended: F. July 13, 1981; eff. August 2, 1981.
Amended: F. Aug. 17, 1983; eff. Sept. 6, 1983.
Repealed: New Rule of same title adopted. F. Oct. 12, 1989; eff. Nov. 1, 1989.
Amended: F. Sept. 1, 2004; eff. Sept. 21, 2004.
Amended: F. June 29, 2017; eff. July 19, 2017.
Amended: F. July 9, 2019; eff. July 29, 2019.
Amended: F. Dec. 20, 2024; eff. Jan. 9, 2025.

Ga. Comp. R. & Regs. r. 80-2-1-.03 Minimum Records Retention Periods {#sec-ga.-comp.-r.-regs.-r.-80-2-1-.03 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-1-.03}

Retention of records of the State chartered credit unions shall be in accordance with Rule 80-10-1.

History

Authority: O.C.G.A. Sec. 7-1-61
History. Original Rule entitled "Minimum Records Retention Periods" adopted. F. June 17, 1976; eff. July 7, 1976.
Repealed: New Rule of same title adopted. F. July 13, 1981; eff. August 2, 1981.
Repealed: New Rule of same title adopted. F. Oct. 12, 1989; eff. Nov. 1, 1989.

Ga. Comp. R. & Regs. r. 80-2-1-.04 Notification of Intent to Utilize a Federal Power {#sec-ga.-comp.-r.-regs.-r.-80-2-1-.04 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-1-.04}

(1) In order to invoke O.C.G.A. § 7-1-671 , a credit union must provide the Department with notice if it intends to utilize a federal power or avail itself of any federal preclusion or preemption of any provision of law, rule or regulation of this State. Such notice shall contain the following information:

(a) A detailed description of the proposed activity to be undertaken by the credit union;

(b) A citation to the specific federal authorization of such proposed activity;

(d) Documentation establishing that the credit union satisfies all the federal requirements, limitations, and restrictions to engage in the activity;

(e) To the extent the activity relates to a new product or service to be offered by the credit union, an analysis of how the proposed activity fits within the credit union's business plan;

(f) An analysis of the projected financial impact of the proposed activity; and

(g) Such other information as may be required by the Department.

(2) A notice shall be incomplete and, thus, not received by the Department until all information has been provided to the satisfaction of the Department.

(3) If the Department determines that the notice is incomplete, then the Department shall provide the credit union with notice of this fact. The credit union must cure any deficiencies in the notice or provide any information requested by the Department within thirty (30) days after receipt of such notification from the Department. If the credit union fails to address and/or cure the deficiencies or provide the requested information to the Department within the thirty (30) day period, the notice shall be deemed withdrawn. However, prior to the expiration of the thirty (30) day period, a credit union can make a written request for an extension of time to cure the deficiencies or provide the information requested by the Department and it shall be in the Commissioner's sole discretion to approve, conditionally or otherwise, or deny the request for an extension of time. Further, the Department may provide a credit union with multiple notifications of deficiencies with the notice or multiple requests for additional information.

(4) After the credit union satisfactorily completes the notice and provides all of the required documents, the Department will issue an official acceptance letter evidencing that the notice is deemed complete. The issuance of the official acceptance letter shall not be construed as evidence that the federal power identified in the notice is authorized.

(5) Within 45 (forty-five) days after issuance of the official acceptance letter, the Department may object to the exercise of the federal power, in whole or in part, or to the federal preclusion or preemption of the law, rule, or regulation of this State, in whole or in part. Prior to the expiration of the review period, the Department may extend the review period for an additional 45 (forty-five) days by providing the credit union with written notice of such extension. In the event the Department does not object to the exercise of the federal power during the applicable review period, the credit union will have satisfied the requirements in O.C.G.A. § 7-1-671 to exercise the federal power.

History

Authority: O.C.G.A. §§ 7-1-61; 7-1-671
History. Original Rule entitled "Microfilm and EDP Processing Requirements" adopted. F. June 17, 1976; eff. July 7, 1976.
Repealed: F. Oct. 12, 1989; eff. Nov. 1, 1989.
Adopted: New Rule entitled "Notification of Intent to Utilize a Federal Power." F. June 27, 2018; eff. July 17, 2018.

Ga. Comp. R. & Regs. r. 80-2-1-.05 Notice of Unauthorized Access to Customer Information {#sec-ga.-comp.-r.-regs.-r.-80-2-1-.05 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-1-.05}

Pursuant to 15 USC § 6801 et seq. and 12 CFR Part 748, credit unions are required to develop and implement a response program that will be utilized in the event unauthorized access to member information has taken place. Member information is any record containing nonpublic information about a member, whether in paper, electronic, or other form maintained by or on behalf of a credit union. Federal law and regulations require disclosure to federal regulators of unauthorized access of customer information in certain circumstances. If disclosure of such unauthorized access is required under federal law, then a duplicate of such disclosure will simultaneously be submitted to the Department.

History

Authority: O.C.G.A. § 7-1-61
History. Original Rule entitled "Notice of Unauthorized Access to Customer Information" adopted. F. July 9, 2019; eff. July 29, 2019.

Ga. Comp. R. & Regs. r. 80-2-1-.06 Notification of Reportable Cyber Incident {#sec-ga.-comp.-r.-regs.-r.-80-2-1-.06 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-1-.06}

Pursuant to 12 C.F.R. Part 748 credit unions are required to notify the appropriate federal regulator no later than 72 hours after the credit union determines that a cyber incident, which rises to the level of a reportable cyber incident, has occurred. A reportable cyber incident is an occurrence identified in 12 CFR § 748.1. If a cyber incident is required to be reported under federal law, then a duplicate of such report, whether provided via email, telephone, or otherwise, will be submitted simultaneously to the Department.

History

Authority: O.C.G.A. §§ 7-1-61, 7-1-663
History. Original Rule entitled "Standard Form Bylaws" adopted. F. Oct. 20, 1981; eff. Nov. 9, 1981.
Repealed: F. Oct. 12, 1989; eff. Nov. 1, 1989.
Adopted: New Rule entitled "Notification of Reportable Cyber Incident." F. July 7, 2023; eff. July 27, 2023.
Amended: F. July 12, 2024; eff. Aug. 1, 2024.

Subject 80-2-2 Group Sales Promotions

Ga. Comp. R. & Regs. r. 80-2-2-.01 Definitions {#sec-ga.-comp.-r.-regs.-r.-80-2-2-.01 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-2-.01}

"Group Sales Promotions" shall mean any offering for the sale of goods or services by or through a credit union to its members, or a class of members, on behalf of a third party not affiliated with the credit union whether or not the credit union is compensated for making the offer available to its members or receives any compensation from the proceeds of the sale of such goods or services.

History

Authority: Ga. L. 1974, pp. 733, 904
History. Original Rule was filed and effective on June 30, 1965.
Amended: Original Rule entitled "Credit Union's Membership as a Part of a Cooperative Purchasing Group" repealed and a new Rule entitled "Definitions" adopted. Filed September 9, 1977; effective September 29, 1977.

Ga. Comp. R. & Regs. r. 80-2-2-.02 Group Sales Promotions Generally {#sec-ga.-comp.-r.-regs.-r.-80-2-2-.02 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-2-.02}

(1) "Group Sales Promotions" shall generally be permitted, provided:

(a) There is no warranty, guaranty, or indemnity on the part of the credit union, either expressed or implied;

(b) all compensation or commissions, payable by the provider of such goods or services to any officer, director, employee, or committee member of the credit union in connection with the sale of such goods or services, shall be paid over to the credit union; provided, however, the requirements of this paragraph shall not preclude the individual promoting the group activity from participation in the promotion free of charge or at a discounted rate so long as the Board of Directors are advised accordingly and this fact is recorded in the minutes of the board; and

(2) In addition to the foregoing requirements,"Group Sales Promotions" involving franchise or group insurance shall be subject to the additional requirement that "administration fees" paid to the credit union in connection with the sale of such insurance shall not exceed five (5%) percent of the premiums collected by the credit union for transmission to the insuror or its agent.

(3) The prohibitions set forth in paragraph (1) (a) above shall be included in writing with all promotional material distributed to members of the credit union.

History

Authority: Ga. L. 1974, pp. 733, 904
History. Original Rule was filed on September 9, 1977; effective September 29, 1977.

Subject 80-2-3 Shares, Deposits and Dividends

Ga. Comp. R. & Regs. r. 80-2-3-.01 Certificate of Deposit {#sec-ga.-comp.-r.-regs.-r.-80-2-3-.01 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-3-.01}

(1) Certificates of Deposit Generally--Any credit union may, from time to time as determined by its board of directors, issue deposit contracts in the form of Certificates of Deposit whereby the credit union agrees to pay a guaranteed rate of interest to the depositor which may be less than, equal to, or greater than any rate paid in the past or anticipated to be paid in the future on regular share deposits of members, provided the terms of such contracts are in compliance with the provisions of this regulation.

(2) Minimum Contract Terms and Standards:

(a) Monies accepted by a credit union pursuant to the authority of paragraph (1) of this regulation shall be considered to be a deposit subject to the provisions of the Financial Institutions Code of Georgia under the following conditions:

Certificates of deposit are issued only to members of the issuing credit union or to another financial institution consistent with O.C.G.A. § 7-1-650 ;
Certificates of deposit shall have a fixed maturity, and shall disclose their terms, including any automatic renewal provisions as established by the board of directors;
Funds deposited thereunder shall be subject to penalty provisions for withdrawal prior to maturity;
Certificates of deposit shall be non-negotiable and nontransferable;
The rates of interest payable under the certificate of deposit contract shall be approved by the Board of Directors of the credit union;
Requirements set forth in sections (2)(a)2., (2)(a)3. and 2(a)4. of this rule shall be disclosed to the depositor along with the date of maturity, interest rate, penalties for early withdrawal, and principal amount of the certificate of deposit.

(b) Every credit union issuing Certificates of Deposit shall maintain a record of every certificate of deposit issued. The record may be in the form of a register, ledger, or copy of the certificate by other technological means available and shall show:

The name of the registered owner of the certificate of deposit;
The amount of the certificate of deposit;
The maturity of the certificate of deposit; and
The rate of interest payable on the certificate of deposit.

(c) Interest may be payable at such intervals in accordance with the contract as determined by the board of directors but not more frequently than monthly except for the payment of accrued interest at the time of redemption of the certificate of deposit. Interest may be paid by check or other electronic means, by deposit to the member's regular share account, or added to the principal value of the certificate of deposit.

History

Authority: O.C.G.A. §§ 7-1-61, 7-1-650, 7-1-663
History. Original Rule entitled "Member Deposit Certificates" adopted as ER. 80-2-3-0.1-.01 . F. and eff. August 1, 1973.
Amended: Permanent Rule of same title adopted. F. Nov. 27, 1973; eff. Dec. 17, 1973.
Amended: ER. 80-2-3-0.2-.01 adopted. F. and eff. April 8, 1974.
Amended: Permanent Rule adopted. F. Apr. 29, 1974; eff. May 19, 1974.
Amended: F. Nov. 15, 1974; eff. Dec. 5, 1974.
Amended: ER. 80-2-3-0.4-.01 adopted. F. and eff. December 9, 1976.
Amended: Permanent Rule adopted. F. Jan. 21, 1977; eff. Feb. 10, 1977.
Amended: ER. 80-2-3-0.6-.01 adopted. F. and eff. August 31, 1978.
Amended: Permanent Rule adopted. F. Nov. 8, 1978; eff. Nov. 28, 1978.
Amended: F. Mar. 18, 1980; eff. Apr. 7, 1980.
Amended: F. July 13, 1981; eff. August 2, 1981.
Amended: F. Aug. 17, 1983; eff. Sept. 6, 1983.
Amended: F. Oct. 12, 1989; eff. Nov. 1, 1989.
Amended: F. Oct. 22, 2001; eff. Nov. 11, 2001.
Repealed: New Rule entitled "Certificate of Deposit" adopted. F. Aug. 15, 2005; eff. Sept. 4, 2005.
Amended: F. July 7, 2023; eff. July 27, 2023.

Ga. Comp. R. & Regs. r. 80-2-3-.02 Savings Promotion Raffle {#sec-ga.-comp.-r.-regs.-r.-80-2-3-.02 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-3-.02}

(1) At least thirty (30) days prior to conducting a savings promotion raffle under O.C.G.A. § 7-1-239.10 , a credit union must provide the Department with written notice detailing the proposed savings promotion raffle. Such notice shall, at a minimum, contain the following information:

(a) A detailed description of the terms of the proposed savings promotion raffle including, but not limited to, the type of account that will be utilized to offer the savings promotion raffle, the interest rate to be paid on the account, the fees associated with the account, the fees associated with the most substantially similar account to the savings promotion raffle account offered by the credit union, the amount required to be deposited in the account for a member to be entered in the raffle and any limitations on the number of entries per member, the frequency of drawings, and available prizes;

(b) Credit union's policies and procedures related to the proposed savings promotion raffle;

(c) Sample of all disclosures provided to members opening a savings promotion raffle account in accordance with O.C.G.A. § 7-1-239.10(c)(1) ;

(e) If the savings promotion raffle is conducted in whole or in part by a third-party service provider, a document from the third-party service provider identifying the number and location of all other financial institutions whose members and customers are eligible to participate in the savings promotion raffle.

(2) A credit union's directors, officers, employees, and the members of such persons' immediate family, as defined by O.C.G.A. § 20-2-58.1 , are prohibited from participating in a savings promotion raffle conducted by that credit union. A credit union's directors and officers are prohibited from participating in a savings promotion raffle at any financial institution if the savings promotion raffle is administered by the same third-party service provider that administers the savings promotion raffle at the credit union.

History

Authority: O.C.G.A. § 7-1-61
History. Original Rule entitled "Savings Promotion Raffle" adopted. F. July 9, 2019; eff. July 29, 2019.

Ga. Comp. R. & Regs. r. 80-2-3-.03 Reserved {#sec-ga.-comp.-r.-regs.-r.-80-2-3-.03 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-3-.03}

History

Authority: Authority O.C.G.A. Secs. 7-1-61, 7-1-663
History. Original Rule entitled "Payment Periods for Dividends" adopted. F. July 13, 1981; eff. August 2, 1981.
Amended: F. Aug. 15, 2005; eff. Sept. 4, 2005.
Repealed: Rule reserved. F. Aug. 22, 2006; eff. Sept. 11, 2006.

Ga. Comp. R. & Regs. r. 80-2-3-.04 Departmental Approval of Dividends {#sec-ga.-comp.-r.-regs.-r.-80-2-3-.04 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-3-.04}

(1) A credit union proposing to pay dividends that total less than 50% of its net income of the preceding calendar year as reported in the Statement of Income and Expense in the December 31 st Call Report may do so without the prior written approval of the department; provided that:

(a) Total adversely classified assets at the most recent examination of the credit union, the conclusions of which may have been presented to the Board of Directors, do not exceed eighty (80) percent of net worth as reflected at such examination; and

(b) The net worth ratio after dividend distribution shall not be less than seven (7) percent.

(2) If a request for approval of the payment of a dividend is required by this Rule, then such requests must be submitted on forms provided by the department.

(3) Approval of dividends shall be based upon the following considerations:

(a) Adequacy of current year earnings to fund the proposed dividends;

(b) Adequacy of reserves;

(c) Adequacy of undivided earnings from previous fiscal years to maintain a level of capital commensurate with asset growth, net worth requirements in accordance with applicable law and regulations, and adequate funding of ongoing operations;

(d) Effects of any dividend reduction on cash flow and liquidity; and

(e) Asset condition of the credit union.

History

Authority: O.C.G.A. §§ 7-1-61, 7-1-660, 7-1-663
History. Original Rule entitled "Departmental Approval of Dividends" was filed on July 13, 1981; effective August 2, 1981.
Amended: Filed August 17, 1983; effective September 6, 1983.
Amended: F. Oct. 12, 1989; eff. Nov. 1, 1989.
Amended: F. Aug. 15, 2005; eff. Sept. 4, 2005.
Amended: F. July 7, 2023; eff. July 27, 2023.

Ga. Comp. R. & Regs. r. 80-2-3-.05 Repealed {#sec-ga.-comp.-r.-regs.-r.-80-2-3-.05 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-3-.05}

History

Authority: O.C.G.A. § 7-1-61
History. Original Rule entitled "Third Party Payment Services" adopted. F. July 13, 1981; eff. August 2, 1981.
Amended: F. Aug. 17, 1983; eff. Sept. 6, 1983.
Amended: F. Oct. 22, 2001; eff. Nov. 11, 2001.
Repealed: New Rule entitled "Third Party Payment Services; Other Consumer Services" adopted. F. Aug. 15, 2005; eff. Sept. 4, 2005.
Repealed: F. July 7, 2022; eff. July 27, 2022.

Ga. Comp. R. & Regs. r. 80-2-3-.06 Service Charges Against Dormant Accounts {#sec-ga.-comp.-r.-regs.-r.-80-2-3-.06 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-3-.06}

The provisions contained in Chapter 80-1-8, Dormant Accounts, shall be applicable to credit unions in determining which accounts are dormant and the maximum service charges which may be assessed against such accounts.

History

Authority: Ga. L. 1974, pp. 705, 733, 904
History. Original Rule entitled "Service Charges Against Dormant Accounts" was filed on June 28, 1984, effective August 1, 1984, as specified by the Agency.

Subject 80-2-4 Investment of Credit Union Funds

Ga. Comp. R. & Regs. r. 80-2-4-.01 Investment of Credit Union Funds in Other Financial Institutions {#sec-ga.-comp.-r.-regs.-r.-80-2-4-.01 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-4-.01}

(1) No credit union shall deposit its funds in an amount exceeding twenty-five (25) percent of the net worth of the credit union in any one bank, savings and loan association, or other credit union that is less than adequately capitalized as defined by 12 CFR § 324.403 , 12 CFR § 702.102 , or 12 CFR § 704.4 as applicable, unless the credit union obtains prior written approval from the Department.

(2) A credit union's policies and procedures shall take into account credit and liquidity risks, including operational risks, in selecting financial institutions in which to deposit funds and terminating those relationships.

(3) Where deposits at a financial institution exceed twenty-five percent of the credit union's net worth, the credit union's policies and procedures shall require periodic reviews of the financial condition of the financial institution and shall take into account actions to be taken in the event of any deterioration in the financial condition of the financial institution. Factors bearing on the financial condition of the financial institution include the capital level, level of nonaccrual and past due loans and leases, level of earnings, and other factors affecting its financial condition. Where public information on the financial condition of the financial institution is available, a credit union may base its review of the financial condition of the financial institution on such information and is not required to obtain non-public information for its review.

(4) Where the deposits at a financial institution exceed twenty-five percent of the credit union's net worth or the financial condition of the financial institution creates a significant risk that the financial institution may not be able to honor a withdrawal of the credit union's deposits, a credit union's policies and procedures shall limit the credit union's exposure to the financial institution, either by the establishment of internal limits or by other means. Limits shall be consistent with the risk undertaken, considering the financial condition of the credit union as well as the financial condition of the financial institution holding the credit union's deposits. Limits may be fixed as to amount or flexible, based on such factors as the financial condition of the credit union or the financial institution. A credit union shall monitor its deposits at a financial institution to ensure that its deposits ordinarily do not exceed the credit union's internal limits except for occasional excesses resulting from unusual market disturbances, market movements favorable to the credit union, increases in activity, operational problems, or other unusual circumstances. Generally, monitoring may be done on a retrospective basis. The level of monitoring required depends on the extent to which the amount of the deposits approaches the credit union's internal limits and the financial condition of the financial institution. A credit union shall establish appropriate procedures to promptly address deposits in excess of its internal limits.

(5) The policies and procedures established under this rule shall be reviewed and approved by the credit union's board of directors at least annually.

(6) If the funds a credit union has deposited in a financial institution are fully and continuously insured by federal deposit insurance, then the credit union does not have to develop the policies and procedures required by this rule.

History

Authority: O.C.G.A. §§ 7-1-61, 7-1-663
History. Original Rule entitled "Investment of Credit Union Funds" adopted. F. May 10, 1976; eff. May 30, 1976.
Repealed: New Rule entitled "Investment of Credit Union Funds in Other Financial Institutions" adopted. F. Oct. 22, 2001; eff. Nov. 11, 2001.
Amended: F. June 20, 2016; eff. July 10, 2016.
Amended: New title, "Deposit of Credit Union Funds in Other Financial Institutions." F. July 7, 2023; eff. July 27, 2023.

Ga. Comp. R. & Regs. r. 80-2-4-.02 Investment of Credit Union Funds in Fixed Assets; Requirements {#sec-ga.-comp.-r.-regs.-r.-80-2-4-.02 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-4-.02}

(1) The aggregate investment by a credit union in fixed assets shall not exceed sixty (60) percent of net worth except that a greater sum may be invested with the prior approval of the Department.

(2) In the event a credit union invests in a leasehold in order to occupy the premises for the transaction of its business and the investment does not cause the credit union to exceed the fixed asset limitation set forth in paragraph (1), the credit union shall provide the Department with written notification of the investment.

(3) Letter form applications seeking approval to invest in fixed assets in an amount in excess of sixty (60) percent of net worth, must provide for an orderly plan of restoring the fixed asset investment to the sixty (60) percent limitation within not more than five (5) years.

(4) Nothing herein shall be construed as permitting a credit union to acquire real estate without the prior approval of the Department or as expressly provided in Rule 80-2-4-.04 .

History

Authority: O.C.G.A. §§ 7-1-61, 7-1-663
History. Original Rule entitled "Investment of Credit Union Funds in Fixed Assets; Letter Form Application and Regular Form Application; Requirements" adopted. F. Oct. 22, 2001; eff. Nov. 11, 2001.
Amended: New title "Investment of Credit Union Funds in Fixed Assets; Requirements." F. June 29, 2017; eff. July 19, 2017.
Amended: F. July 7, 2023; eff. July 27, 2023.

Ga. Comp. R. & Regs. r. 80-2-4-.03 Investment of Credit Union Funds in Subsidiaries {#sec-ga.-comp.-r.-regs.-r.-80-2-4-.03 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-4-.03}

(1) Unless otherwise precluded by law or regulations, a credit union may acquire and hold for its own account shares of stock or interest in a subsidiary or affiliate corporation or limited liability company engaged in the following functions or activities that do not pose undue risk to the safety and soundness of the credit union and that are consistent with the objectives of O.C.G.A. § 7-1-3 . The functions or activities that the credit union subsidiary or affiliate is authorized to conduct include, but are not limited to:

(a) offering third party payment services;

(b) holding real estate;

(d) offering a full range of investment products;

(e) exercising powers incidental to financial activities as provided in O.C.G.A. § 7-1-650 ; and

(f) exercising powers granted by Department rules or powers determined by the Commissioner to be financial in nature or incidental to the provision of financial services.

(2) O.C.G.A. § 7-1-650(6) contemplates that a credit union can have a separate subsidiary or affiliate to exercise powers that are express or incidental to the credit union's authority with the approval of the Department. Subject to certain investment limitations for credit unions, the subsidiary or affiliate can conduct such powers as may be financial in nature or incidental or complimentary to the provision of financial services. Prior to the subsidiary or affiliate engaging in any functions or activities that a credit union is authorized to engage, the credit union must submit a letter form application to the Department describing the proposed activity, detailing the activity's relationship to the business of the credit union, and setting forth the provisions that will be implemented in order to mitigate any related risks. Upon review of the application, the Department may request additional information if it determines such additional information is necessary in order to fully and completely evaluate the application. After completion of its review, the Department shall either approve, conditionally or otherwise, or deny such application in writing.

(3) If more than one credit union has an ownership interest in such subsidiary or affiliate, the credit union that has the largest percentage ownership in the subsidiary or affiliate must submit the application to the Department. In the event the largest credit union percentage ownership in the subsidiary or affiliate is held by multiple credit unions, then only one credit union is required to submit an application to the Department.

(4) Notwithstanding paragraph (2) of this Rule, if a credit union owns less than ten (10) percent of the subsidiary or affiliate and the ownership interest in the subsidiary or affiliate is less than ten (10) percent of the credit union's net worth, then the credit union does not need to obtain approval from the Department for such investment. Further, notwithstanding the requirement in paragraph (3) of this Rule that the credit union with the largest percentage ownership must submit the application to the Department, if the credit union with the largest percentage ownership does not have to obtain approval from the Department pursuant to this paragraph, then the credit union, if any, that has an ownership interest in the subsidiary or affiliate that is ten (10) percent or more of the credit union's net worth must submit the required application under paragraph (3) to the Department.

(5) For purposes of this rule only, "affiliate" means a corporation or limited liability company, that a credit union has less than a majority ownership interest.

History

Authority: O.C.G.A. §§ 7-1-61, 7-1-663
History. Original Rule entitled "Investment of Excess Funds in Participation Loans" adopted. F. Oct. 22, 2001; eff. Nov. 11, 2001.
Amended: F. Aug. 15, 2005; eff. Sept. 4, 2005.
Repealed: F. Aug. 15, 2007; eff. Sept. 4, 2007.
Adopted: New Rule entitled "Investment of Credit Union Funds in Subsidiaries." F. Jun. 10, 2014; eff. Jun. 30, 2014.
Amended: F. July 9, 2019; eff. July 29, 2019.
Amended: F. July 7, 2022; eff. July 27, 2022.
Amended: F. July 7, 2023; eff. July 27, 2023.

Ga. Comp. R. & Regs. r. 80-2-4-.04 Purchase of Real Estate for Future Expansion; Letter Notification {#sec-ga.-comp.-r.-regs.-r.-80-2-4-.04 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-4-.04}

(1) Except as otherwise provided in this Rule, a credit union may purchase real property for expansion purposes only with the prior written approval of the Department.

(2) Department approval shall be granted only in those cases where the applicant credit union provides reasonable assurance that it plans to utilize the property as credit union premises within five (5) years from the date of purchase and indicates the purpose for which the property is being acquired.

(3) The granting of approval to purchase property for future expansion shall in no way be considered as approving any future credit union premises or the expansion program.

(4) The purchase of real estate solely for expansion purposes may be made without the prior approval of the Department and by only a letter notification when:

(a) The real property is to be utilized solely as the premises of a credit union or its wholly owned subsidiary within five years of the date of purchase;

(b) The purchase of the real property does not result in the credit union exceeding the fixed asset limitation;

(c) The credit union is not subject to any special requirements whereby the Department requires prior approval for such purchases; and

(d) If a director, officer, or committee member is a party to the transaction, a certification is provided stating that all requirements of O.C.G.A. § 7-1-656 and the provisions of any applicable federal requirement have been satisfied.

(5) The letter notification shall be received by the Department no later than thirty (30) days after the purchase of the property and shall state the date of purchase, purchase price, location of the property, and why the credit union qualifies for letter notification under the provisions of this rule.

(6) Whether the credit union received prior written approval or provided timely written notification of the purchase, the ability to hold property for future expansion shall expire five (5) years from the date of purchase unless the property is utilized as credit union premises prior to that time. Credit unions holding property beyond the five-year period must divest themselves of the property through sale unless the time limitation is extended by the Department.

History

Authority: O.C.G.A. §§ 7-1-61; 7-1-650; 7-1-663
History. Original Rule entitled "Purchase of Real Estate for Future Expansion; Letter Notification" adopted. F. June 29, 2017; eff. July 19, 2017.
Amended: F. Oct. 2, 2025; eff. Oct. 22, 2025.

Ga. Comp. R. & Regs. r. 80-2-4-.05 Credit Union as a Lessor of Real Estate {#sec-ga.-comp.-r.-regs.-r.-80-2-4-.05 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-4-.05}

(1) Pursuant to O.C.G.A. § 7-1-650(8)(A) , a credit union may purchase, hold, and convey real estate the credit union occupies or intends to occupy primarily for the transaction of its business. Subject to compliance with the provisions of this rule as well as the Department's prior written approval, a credit union may lease excess real estate.

(3) The underlying real estate must have been acquired in good faith for permissible purposes and with the intent of providing services to the credit union's members. Nothing herein shall be deemed to authorize a credit union to acquire real estate for speculative purposes.

(4) The credit union may not lease real estate to a third-party if it raises safety and soundness concerns.

(5) The application for approval to lease real estate to a third-party shall contain, at a minimum, the following information:

(a) A detailed description of the lease that is contemplated, including but not limited to, the terms of the lease, a description of the proposed lessee's operations, the relationship, if any, between the credit union and the proposed lessee, the real estate that is proposed to be leased, and the percentage of the real estate that will be occupied by lessee;

(b) The total amount of the credit union's fixed assets that will be leased in the event the lease is approved;

(c) An affirmative statement that there is no involvement by any director, committee member, officer or employee of the credit union or any related interest of such individuals with the individual or entity that is the proposed lessee. In the event there is any such involvement, then it should be detailed in the application; and

(d) A copy of the resolution adopted by the Board of Directors authorizing the lease of the specific premises to the proposed lessee.

History

Authority: O.C.G.A. § 7-1-61
History. Original Rule entitled "Credit Union as a Lessor of Real Estate" adopted. F. June 27, 2018; eff. July 17, 2018.
Amended: F. Jan. 8, 2021; eff. Jan. 28, 2021.

Ga. Comp. R. & Regs. r. 80-2-4-.06 Charitable Donation Accounts {#sec-ga.-comp.-r.-regs.-r.-80-2-4-.06 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-4-.06}

Credit unions are authorized to invest in charitable donation accounts subject to the following limitations:

(1) The primary purpose of the charitable donation account must be to generate funds to donate to 501(c)(3) and 501(c)(19) non-profit organizations that serve a charitable, social, welfare, or educational purpose and serves the credit union's field of membership;

(2) Prior to investing in a charitable donation account, the Board of Directors must adopt a Conflict of Interest and Ethics Policy that specifically addresses charitable contributions. Such Conflict of Interest and Ethics Policy must include all designated charitable purposes authorized to receive contributions and each designated charitable purpose must be consistent with the best interests of the membership of the credit union. The credit union shall develop written procedures regarding the funding of charitable donation accounts and the distribution of funds from such accounts;

(3) The terms and conditions controlling the charitable donation account must be documented in a written agreement. At a minimum, the written agreement must provide that donations will only be made to authorized organizations, document the investment strategies and risk tolerances that must be followed in administering the account, provide that all records of the account, including distributions and liquidation, will be maintained in conformity with generally accepted accounting principles, and provide for the frequency of distributions to authorized organizations;

(4) The charitable donation account may purchase an investment that would otherwise be impermissible if purchased by the credit union so long as the type of investment is authorized by the written agreement;

(5) Prior to the charitable donation account investing in an otherwise impermissible investment under Paragraph (4), the credit union must develop policies and procedures, approved by the Board of Directors, detailing the risk management processes that will be utilized prior to investing in an otherwise impermissible investment, including, but not limited to, the controls that will be implemented to monitor the investment, the timing and methodology of evaluating the quality and risks posed by the investment, and a documented and reasonable approach to transfer or otherwise divest of the investment in an expedited manner;

(6) The aggregate investment in charitable donation accounts cannot exceed five (5) percent of the credit union's net worth;

(7) A credit union cannot contribute funds to a charitable donation account if it has negative earnings unless it has received prior written approval from the department;

(8) A minimum of 51 percent of the total return from each charitable donation account must be distributed to one or more authorized organizations;

(9) Distributions must be made to authorized organizations no less frequently than every five (5) years;

(10) Assets of charitable donation accounts must be held in segregated custodial accounts or special purpose entities specifically identified as charitable donation accounts. If a credit union structures the charitable donation account as a trust, such trust must be a revocable trust and the trustee must be an entity regulated by a state or federal regulatory agency;

(11) Upon termination of the charitable donation account and subject to compliance with Paragraph 8, the credit union may receive a distribution of the remaining assets in cash or, alternatively, in kind so long as those assets are permissible investments for state-chartered credit unions; and

(12) Such investment must be consistent with principles of safety and soundness.

History

Authority: O.C.G.A. §§ 7-1-61, 7-1-663
History. Original Rule entitled "Charitable Donation Accounts" adopted. F. June 27, 2018; eff. July 17, 2018.
Amended: F. July 12, 2024; eff. Aug. 1, 2024.

Ga. Comp. R. & Regs. r. 80-2-4-.07 Life Insurance as an Employee Benefit {#sec-ga.-comp.-r.-regs.-r.-80-2-4-.07 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-4-.07}

Subject to any additional limitations the Commissioner or applicable federal regulator may impose by policy, guidance, or order, including, but not limited to, the Interagency Statement on the Purchase and Risk Management of Life Insurance as well as safety and soundness principles, a credit union may purchase, hold or fund life insurance as follows:

(1) Life insurance purchased, held, or funded in connection with employee compensation or benefit plans approved by the credit union's board of directors;

(2) Life insurance purchased or held to recover the cost of providing preretirement or postretirement employee benefits approved by the credit union's board of directors;

(3) The kind and amount of life insurance must be reasonable given the size of the credit union, the financial condition of the credit union, the duties of the employee, and other compensation of the employee;

(4) Obtain written approval from the Department prior to purchasing, holding, or funding split dollar life insurance or a product substantially similar to split dollar life insurance to ensure consistency with the Interagency Statement on the Purchase and Risk Management of Life Insurance and safety and soundness principles;

(5) A credit union investing to fund life insurance obligations may purchase an investment that would otherwise be impermissible if the investment is approved by the credit union's board of directors, is directly related to the credit union's obligation or potential obligation under such life insurance, and the credit union holds the investment only for as long as it has an actual or potential obligation under such life insurance; and

(6) Prior to the board of directors approving an otherwise impermissible investment under Paragraph (5), the credit union must develop board approved policies and procedures detailing the risk management processes the board will take into consideration in approving an otherwise impermissible investment, including, but not limited to, the controls that will be implemented to monitor the investment, the timing and methodology of evaluating the quality and risks posed by the investment, and a documented and reasonable approach to transfer or otherwise divest of the investments in an expedited manner.

History

Authority: O.C.G.A. §§ 7-1-61; 7-1-650
History. Original Rule entitled "Life Insurance as an Employee Benefit" adopted. F. June 27, 2018; eff. July 17, 2018.

Ga. Comp. R. & Regs. r. 80-2-4-.08 Application Requirements for Branch Offices {#sec-ga.-comp.-r.-regs.-r.-80-2-4-.08 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-4-.08}

(1) Branch offices may be established with the prior approval of the Department by regular application or by expedited application for certain qualified credit unions as provided in paragraph (3).

(2) Unless the provisions related to an expedited application in paragraph (3) is satisfied, a credit union must submit an application to the Department in order to obtain approval to establish a branch office. An application will not be deemed to have been accepted by the Department until all portions of the application have been completed to the satisfaction of the Department. If the Department notifies the credit union of deficiencies in the application, the credit union must complete the application within thirty (30) days of receipt of the notification of the Department. The Department will approve or deny an application for a branch office within thirty (30) days of receipt of a completed application.

(3) In lieu of an application, a credit union is authorized to submit an expedited application to establish a new branch office subject to the below conditions.

(a) The credit union must meet the following criteria:

The credit union must be well capitalized as defined by the capital requirements of the Department and the NCUA;
The credit union must have received a CAMELS composite rating of "1" or "2" as a result of the most recent state or federal examination;
The credit union must not be subject to any agreements, orders, or other enforcement or administrative agreements with the Department or the NCUA; and
Total investments in fixed assets do not exceed sixty (60) percent of net worth.

(b) The expedited application must include the following:

The physical address of the branch office;
A statement regarding whether or not an insider is involved in the acquisition, construction, or leasing of the property;
The anticipated fixed asset investment for this proposal and whether the credit union will be in compliance with Rule 80-2-4-.02 ; and
A statement certifying that the credit union qualifies for expediated processing under subparagraph (a).

(c) Unless it has previously issued an approval letter under subparagraph (d), the Department will attempt to acknowledge receipt of an expedited application or notify the applicant that it does not qualify for expedited processing and may submit an application for regular processing within two business days of receipt of such notice.

(d) The approval to establish a branch office will be effective at the earlier of the approval letter from the Department or 10 business days from the date of acknowledged receipt.

(e) Notwithstanding the above, the Department may deny or remove from expedited processing any credit union's application where it finds that:

Safety and soundness concerns of the Department dictate a more comprehensive review;
Any material adverse comment is received by the Department;
Other supervisory concerns, legal issues, or policy issues come to the attention of the Department;
If applicable, any acquisition of fixed assets would cause the institution to exceed the fixed asset limitation; or
Any other good cause exists for denial or removal. In this event, the credit union will be notified that expedited processing is not available, the reason, and instructions as to how to proceed.

History

Authority: O.C.G.A. §§ 7-1-61, 7-1-663, 7-1-665
History. Original Rule entitled "Application or Notice Requirements for Branch Offices" adopted. F. Jan. 8, 2021; eff. Jan. 28, 2021.
Amended: New title, "Application Requirements for Branch Offices." F. July 7, 2022; eff. July 27, 2022.
Amended: F. July 7, 2023; eff. July 27, 2023.

Ga. Comp. R. & Regs. r. 80-2-4-.09 Relocation or Simultaneous Redesignation of Two or More Credit Union Locations {#sec-ga.-comp.-r.-regs.-r.-80-2-4-.09 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-4-.09}

(1) Definitions:

(a) Relocation. The location of an existing branch location is to be moved to a new or additional location which is to be constructed, purchased or leased within the same immediate vicinity of the existing branch.

(b) Redesignation. Where two existing credit union locations exchange their designations, a redesignation occurs. Under a redesignation, a branch office becomes the main office and the main office, if it is not closed, becomes a branch office.

(2) Procedure for a Relocation. A credit union meeting the qualifying criteria for expedited processing in sections (3) of Rule 80-2-4-.08 may submit a letter form notification to relocate an existing branch or main office location. The approval to relocate such existing location under the notice procedure will be effective at the earlier of: an approval letter from the department, or 10 business days from the date of acknowledged receipt. In the event the credit union does not qualify for expedited processing, a form application should be submitted to the Department, which will normally be processed within 30 days from receipt of a completed application. All relocations should include a notice to members posted in a conspicuous place of the affected location as well as on the credit union's website at least 30 days before relocating. In addition, if any relocation proposal involves relocation of the credit union's main office, additional procedures such as amendment of the credit union's Articles of Incorporation may apply.

(3) Procedure for a Redesignation. Upon receipt of a letter form request setting forth the details of the proposed redesignation, the Department will review and process such request within seven (7) days. In the event the credit union intends on closing the former main office as part of a redesignation, then the closing procedures for a branch location must be followed.

History

Authority: O.C.G.A. § 7-1-61
History. Original Rule entitled "Relocation or Simultaneous Redesignation of Two or More Credit Union Locations" adopted. F. Jan. 8, 2021; eff. Jan. 28, 2021.

Subject 80-2-5 Surety Bond Coverage

Ga. Comp. R. & Regs. r. 80-2-5-.01 Minimum Requirements for Fidelity Coverage {#sec-ga.-comp.-r.-regs.-r.-80-2-5-.01 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-5-.01}

(1) The Board of Directors of each credit union shall review the fidelity insurance coverage annually in order to ascertain its adequacy in relation to the exposure to theft, defalcation, or other similar actions by officers, directors, and employees and to any minimum requirements that may be fixed from time to time by the Commissioner. In evaluating the adequacy and scope of the fidelity coverage, the Board of Directors shall consider whether the coverage should include agents and independent contractors of the credit union.

(2) Every credit union shall obtain fidelity coverage, such as a fidelity bond, to provide protection against the potential risks facing the credit union as prescribed in the credit union's bylaws, applicable statutes, and rules and regulations of the Department.

(3) It shall be the duty of the Board of Directors of the credit union to provide adequate fidelity coverage.

(4) The Commissioner may require additional coverage for any credit union when, in his or her opinion, the fidelity coverage in force is insufficient to provide adequate fidelity coverage, and it shall be the duty of the Board of Directors of the credit union to obtain such additional coverage within thirty (30) days after the date of written notice from the Commissioner of the requirement to obtain such additional coverage. If the credit union is unable to obtain such additional coverage within the thirty (30) day timeframe, the credit union shall provide the Department with detailed information documenting the commercially reasonable efforts undertaken by the credit union during the timeframe and the Department shall determine the amount of additional time needed for the credit union to obtain the required coverage.

History

Authority: O.C.G.A. §§ 7-1-61, 7-1-663
History. Original Rule entitled "Minimum Requirements for Surety Bond Coverage" adopted. F. May 14, 1976; eff. June 3, 1976.
Amended: F. July 13, 1981; eff. August 2, 1981.
Amended: F. Aug. 22, 2006; eff. Sept. 11, 2006.
Amended: Title changed to "Minimum Requirements for Fidelity Bond Coverage." F. June 10, 2014; eff. June 30, 2014.
Amended: F. July 12, 2024; eff. Aug. 1, 2024.
Amended: New title, "Minimum Requirements for Fidelity Coverage." F. June 18, 2025; eff. July 8, 2025.

Subject 80-2-6 Supervisory Audits

Ga. Comp. R. & Regs. r. 80-2-6-.01 Audits {#sec-ga.-comp.-r.-regs.-r.-80-2-6-.01 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-6-.01}

(1) Every Audit Committee shall have an annual audit of the credit union performed, which must be comprehensive in scope covering the period elapsed since the last annual audit, and submit a summary of the audit results at the next annual meeting of the members of the credit union.

(2) The annual audit must be performed by a licensed independent accountant or firm of accountants. However, if the credit union has assets of less than $20 million, the Audit Committee may elect to have the annual audit conducted by the internal auditors of any sponsoring group, concern, or association of credit unions approved in advance by the Department in writing. In evaluating such request, the Department shall, among other items, take into consideration the credit union's net worth adequacy, any material findings in the most recent audits and reports of examination, condition of the credit union, and adequacy of internal controls. Any such approval from the Department shall be limited to the specific fiscal year that is the subject of the request.

(3)

(a) Audit reports in which a licensed independent accountant expresses an unqualified opinion shall be provided to the Department upon request. All other audit reports in which a licensed independent accountant expresses anything other than an unqualified opinion, including, but not limited to, a qualified opinion, an adverse opinion, or a disclaimer of opinion, shall be provided to the Department within fifteen (15) days following receipt by the financial institution. All audit reports generated by anyone besides a licensed independent accountant in accordance with Paragraph 2 of this rule, shall be provided to the Department within fifteen (15) days following receipt by the financial institution. Audit reports submitted to the Department shall be accompanied by the Letter to Management, if applicable, detailing any reportable conditions discovered during the audit engagement.

(b) Failure to obtain the required audit, or the auditor's report thereof, shall be reported to the Department within fifteen (15) days of discovery.

(c) The engagement letter should clearly define the extent of the audit work including, the scope of the audit, the objectives, the resource requirements, the audit timeframes, and the resulting reports, as well as detail the methods utilized by the auditor to handle and protect member information. The credit union shall provide the Department with a copy of the engagement letter at the same time the audit report is provided to the Department.

(d) The auditor shall also provide the Department with a copy of the audit as well as the engagement letter at the request of the Department.

(4) If the audit is conducted by a licensed independent accountant or firm of accountants, the individual or firm is responsible for the preparation and maintenance of any work papers used to support the findings and conclusions in the audit. Conversely, if the audit is conducted by the internal auditors of any sponsoring group, concern, or association of credit unions, the Audit Committee shall be responsible for the preparation and maintenance of any work papers used to support the finding and conclusions in the audit. Under either scenario, the work papers shall be subject to review by the Department and must be made available to the Department upon request.

(5) In the event the Department determines that an audit is deficient, the Department may require the credit union to immediately obtain a new annual audit performed on terms and by an individual acceptable to the Department.

(6) At frequent intervals, but under no circumstances less than annually, the Audit Committee shall also make, or cause to be made, an inspection of the assets and liabilities of the credit union, the credit union's loan and deposit accounts, and the credit union's information technology. The Audit Committee shall also have supplementary audits performed upon request of the Department.

(7) At frequent intervals, but under no circumstances less than annually, the Audit Committee shall make, or cause to be made, a physical cash count.

History

Authority: O.C.G.A. §§ 7-1-61; 7-1-657
History. Original Rule was filed on October 26, 1976; effective November 15, 1976.
Amended: New title "Supervisory Audits." F. June 15, 2015; eff. July 5, 2015.
Amended: F. June 29, 2018; eff. July 19, 2018.
Amended: New title "Audits." F. July 9, 2019; eff. July 29, 2019.
Amended: F. Oct. 2, 2025; eff. Oct. 22, 2025.

Ga. Comp. R. & Regs. r. 80-2-6-.02 Repealed {#sec-ga.-comp.-r.-regs.-r.-80-2-6-.02 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-6-.02}

History

Authority: O.CG.A. § 7-1-61
History. Original Rule was filed on October 26, 1976; effect November 15, 1976.
Amended: F. June 15, 2015; eff. July 5, 2015.
Repealed: F. June 29, 2018; eff. July 19, 2018.

Ga. Comp. R. & Regs. r. 80-2-6-.03 Applicable Auditing Standards {#sec-ga.-comp.-r.-regs.-r.-80-2-6-.03 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-6-.03}

An audit of a credit union by an independent accountant or firm of such accountants or the internal auditors of any sponsoring group, concern, or association of credit unions shall be made in accordance with generally accepted auditing standards as set forth in pronouncements of the American Institute of Certified Public Accountants.

History

Authority: Ga. L. 1974, pp. 705, 733, 904; 1981, pp. 1245, 1250
History. Original Rule was filed on October 26, 1976; effect November 15, 1976.
Amended: F. June 15, 2015; eff. July 5, 2015.

Ga. Comp. R. & Regs. r. 80-2-6-.04 Scope of Audit {#sec-ga.-comp.-r.-regs.-r.-80-2-6-.04 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-6-.04}

(1) The auditor should be generally familiar with the statutes, rules, and regulations under which the credit union being audited operates, and with its charter and bylaw provisions. The annual audit should incorporate the necessary procedures to satisfy the auditor that there is compliance with the applicable requirements that might materially affect the credit union's financial position of operation.

(2) Such annual audit shall include a review of the credit union's internal controls and such other tests and reviews of the credit union's records as deemed appropriate by the auditor, including, but not limited to, verifications of the credit union's loan and deposit accounts as well as adequate testing and review of the credit union's information technology activities.

(3) Specific Requirements for the annual audit:

(a) The audit must state the method and degree of direct verification of loan and share accounts and analyze the results by schedule. The audit should indicate whether positive or negative account confirmations were used, number of confirmations mailed, number of replies received, number of undeliverable confirmations, analysis of discrepancies disclosed, and degree of follow-up confirmation for non-replies and undeliverable confirmations;

(b) The audit includes a verification of a timely and accurate cash reconciliation and an affirmative verification of investments and deposits made by the audited credit union as well as the adequacy of the internal controls over these processes;

(c) Verification of the status of funds borrowed by the audited credit union, including promissory notes and certificates;

(d) The audit must confirm that internal routines and controls were evaluated and no exceptions were found or that certain listed exceptions were noted; and

(e) The audit must set forth in sufficient detail the general scope of the audit performed.

History

Authority: O.C.G.A. §§ 7-1-61; 7-1-657
History. Original Rule was filed on October 26, 1976; effective November 15, 1976.
Amended: F. June 15, 2015; eff. July 5, 2015.
Amended: F. June 29, 2018; eff. July 19, 2018.

Ga. Comp. R. & Regs. r. 80-2-6-.05 Internal Audit Program {#sec-ga.-comp.-r.-regs.-r.-80-2-6-.05 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-6-.05}

(a) Monitoring and reporting on the system of internal controls;

(b) Testing and review of controls over information systems;

(d) Verifying and reviewing of management actions to address material weaknesses; and

(e) Engagement and oversight by the institution's Board of Directors.

(3) The Board of Directors shall review and approve the scope of the internal audit program to include the operational areas targeted for review, the proposed timeline of reviews, testing procedures to be used, the qualifications of personnel for the subject matter to be reviewed, and the independence of personnel from operational responsibilities over areas to be reviewed. Alternatively, an audit committee formed in compliance with O.C.G.A. § 7-1-656(b)(2) , is authorized to act in lieu of the Board of Directors. The scope of the internal audit will be documented - via an engagement letter when third parties are engaged - and provided to the Department upon request.

(4) The internal auditor or designated liaison shall:

(a) Implement or oversee implementation of the institution's internal audit program;

(b) Monitor the implementation of corrective actions; and

(c) Report to the Board of Directors at least annually on the status of the internal audit program to include audit activities, findings, and corrective actions.

(5) The internal audit shall be appropriate to the size of the institution and the nature and scope of its activities. In determining the nature and scope of the internal audit, the financial institution shall take into consideration the auditing standards formulated by The Auditing Standards Board of the AICPA, and/or the Institute for Internal Auditors. Internal audit reports shall be sent directly from the internal auditor to all independent directors of the Board of Directors, all independent directors of the audit committee, or an independent director that acts as chair of the Board of Directors or audit committee.

(6) Unless pre-approved by the Department in writing, the external audit obtained pursuant to O.C.G.A. § 7-1-657 and Rule 80-2-6-.01 , will not satisfy the internal audit program requirement.

(7) In the event the Department determines that an internal audit program is deficient, the Department may require the institution to:

(a) Replace the internal auditor with an individual acceptable to the Department;

(b) Perform additional reviews by personnel acceptable to the Department with subject matter expertise on, and independence from, the areas targeted for review; and

History

Authority: O.C.G.A. § 7-1-61
History. Original Rule entitled "Internal Audit Program" adopted. F. July 9, 2019; eff. July 29, 2019.
Amended: F. June 18, 2025; eff. July 8, 2025.

Subject 80-2-7 Credit Union Service Contracts

Ga. Comp. R. & Regs. r. 80-2-7-.01 General Provisions and Definitions {#sec-ga.-comp.-r.-regs.-r.-80-2-7-.01 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-7-.01}

(1) A state credit union may contract with another financial institution or a third party service provider to provide certain services in a principal-agent relationship, provided both parties comply with the applicable rules and regulations of the Department.

(2) Agency relationships shall comport with safety and soundness principles to protect the financial integrity of the credit union and the accounts of its members.

(3) Definitions:

(a) "Credit Union Service Contract" shall mean a contract executed by a credit union and a third party service provider to provide financial services, whether direct or indirect, to the credit union.

(b) "Third party service provider" shall mean any provider of financial services to a credit union as authorized by O.C.G.A. § 7-1-72 .

(4) This chapter is not intended to apply to non-banking related operational or administrative functions which do not tend to impact the safety and soundness of the credit union or the accessibility to the Department of records.

History

Authority: O.C.G.A. §§ 7-1-61, 7-1-663
History. Original Rule entitled "General Provisions and Definitions" adopted. F. Nov. 8, 1978; eff. Nov. 28, 1978.
Amended: Rule retitled "Definitions." F. July 28, 2003; eff. August 17, 2003.
Amended: New title, "General Provisions and Definitions." F. July 7, 2023; eff. July 27, 2023.

Ga. Comp. R. & Regs. r. 80-2-7-.02 Credit Union Service Contracts {#sec-ga.-comp.-r.-regs.-r.-80-2-7-.02 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-7-.02}

(1) If a state-chartered credit union is required to disclose a credit union service contract to the National Credit Union Administration, a duplicate of such disclosure will simultaneously be submitted to the Department.

(2) A state-chartered credit union entering into a credit union service contract with a third party service provider must maintain the following information on file at the credit union and shall not execute a contract with a third party service provider unless this information has been obtained:

(a) A copy of the contract under which the services are provided;

(b) A schedule of fees to be charged for each type of service to be performed;

The records of the credit union for which the services are to be performed will be subject to examination and regulation by the department as if the records were maintained by the credit union on its own premises;
The records of the credit union in the service provider's possession shall be available to examiners promptly upon receipt of notice;
The department shall have the authority to periodically review the internal routine and controls of the service provider to ascertain that the operations are being conducted in a sound manner in keeping with generally accepted credit union procedures and industry standards;

(d) A listing of all reports and printouts which the third party service provider is offering the credit union and the time required, after receipt of notice of examination, to provide those reports in readable form to the examiners; and

(e) Evidence of financial stability to include a copy of the third party service provider's most recent audit and financial statement, both of which should be aged no more than 18 months. This is a continuous requirement.

(3) A state-chartered credit union contracting with a third party service provider must employ good faith efforts to monitor the financial condition of the service provider and must notify the department immediately when it discovers or suspects that the service provider is insolvent or has suffered significant financial losses that threaten the continuing viability of the third party service provider.

History

Authority: O.C.G.A. §§ 7-1-61, 7-1-663
History. Original Rule entitled "Application for Permission to Perform Credit Union Services" adopted. F. Nov. 8, 1978; eff. Nov. 28, 1978.
Amended: F. July 13, 1981; eff. August 2, 1981.
Amended: Rule retitled "Contracts for Credit Union Services." F. July 28, 2003; eff. August 17, 2003.
Amended: New title, "Credit Union Service Contracts." F. July 7, 2023; eff. July 27, 2023.

Ga. Comp. R. & Regs. r. 80-2-7-.03 Credit Union Service Contracts: Requirements of Third Party Service Providers {#sec-ga.-comp.-r.-regs.-r.-80-2-7-.03 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-7-.03}

(1) Each third party service provider that enters into a credit union service contract with a state-chartered credit union shall be subject to examination and regulation by the department as if the entity were a state financial institution, as authorized by O.C.G.A. § 7-1-72 .

History

Authority: O.C.G.A. §§ 7-1-61, 7-1-663
History. Original Rule entitled "Contracting to Perform or Have Performed Credit Union Services" adopted. F. Nov. 8, 1978; eff. Nov. 28, 1978.
Amended: F. July 13, 1981; eff. August 2, 1981.
Repealed: Rule reserved. F. July 28, 2003; eff. August 17, 2003.
Adopted: New Rule entitled "Credit Union Service Contracts: Requirements of Third Party Service Providers." F. July 7, 2023; eff. July 27, 2023.

Ga. Comp. R. & Regs. r. 80-2-7-.04 Debt Cancellation Contracts and Debt Suspension Agreements {#sec-ga.-comp.-r.-regs.-r.-80-2-7-.04 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-7-.04}

(1) State chartered credit unions may offer Debt Cancellation Contracts and Debt Suspension Agreements to members, subject to this rule and policies and procedures of the Department. Policies of the Department include requirements for disclosures and certain prohibited practices. Credit unions are expected to comply with all these requirements. Such products will not be considered insurance products in this state when offered by credit unions.

(2) Definitions and Explanation:

(a) A "Debt Cancellation Contract" (DCC) is a contractual agreement modifying loan terms that is linked to a credit union's extension of credit, under which the credit union agrees to cancel all or part of a member's obligation to repay an extension of credit from that credit union upon the occurrence of a specified event.

(b) A "Debt Suspension Agreement" (DSA) is a contractual agreement that modifies loan terms and that is linked to an extension of credit, wherein the credit union agrees to suspend all or part of a member's obligation to repay an extension of credit upon the occurrence of some specified event.

(c) Typically, these products are tied to the life, injury or disability of the borrower, although some products are based on the occurrence of some other specified event, such as termination of employment.

(d) Fees are assessed to the borrower for the ability to cancel or suspend loan payments on the loan, in accordance with the terms of the agreement.

(e) To "underwrite" in the context of this rule means to directly provide for any losses resulting from the operation of the product.

(3) State chartered credit unions desiring to offer DCC or DSA products where the credit union is not underwriting the product shall provide a letter form notification to the Department. The credit union must keep on file the following information, which must be obtained before execution of a contract:

(a) A listing of the types of contracts offered and the underwriting standards for each product;

(b) A copy of the written policies and procedures developed regarding administration of debt cancellation or debt suspension products and their compliance with Department policies;

(d) A copy of the credit union's plan demonstrating the ability to administer claims;

(e) An analysis of the credit union's risk evaluation and mitigation procedures, including any plans to obtain insurance coverage to fully or partially indemnify itself for losses resulting from the operation of the DCC or DSA product; and

(f) An analysis of the expected impact on credit union staffing.

(4) If a credit union intends to underwrite any part of the DCC or DSA, the following information must also be submitted to the Department in the form of a letter application. No underwriting will be permitted until such approval is granted.

(b) An explanation of the risk management techniques the credit union will undertake, including product design criteria, underwriting procedures, limitations and conditions on DCC or DSA products, and other risk mitigation procedures in order to limit risk exposure to the credit union.

(c) A well-documented analysis of risk of the products being proposed, including the risks posed by catastrophic events that could result in unusually high claims upon the credit union.

(d) An outline of the proposed practices for properly reserving for risks related to these products based on industry practices and Generally Accepted Accounting Principles.

(e) An analysis of the credit union to support that the credit union has the proper financial position, cash flow performance and capital position to sustain continued operations in the event of an unusually high claims event.

(5) State chartered credit unions desiring to offer DCC or DSA products where third party service providers will underwrite the products or will administer any part of the program shall provide the letter form notification described in this rule. In addition to any requirements of Rule Chapter 80-2-7 governing service providers, the following information shall also be obtained by the credit union before any contract is executed, and such information will be kept on file at the credit union:

(a) A description of the experience of the third party service provider in offering such DCC or DSA products;

(c) In lieu of (a) and (b) of this paragraph, the credit union may provide proof of the third party's appropriate licensure with the state of Georgia Department of Insurance.

(d) A copy of the standard form contract to be utilized. The contract must contain the third party service provider's assurance that:

It will make its books and records available for examination by the Department; and
The Department shall have the authority to periodically review the internal routine and controls of the service provider to ascertain that the operations are being conducted in a sound manner in keeping with industry practices and Generally Accepted Accounting Principles.

(e) A schedule of fees to be charged for each product or service performed; and

(f) A listing of reports, printouts, schedules or program that will be provided by the third party service provider to the credit union to permit management, auditors, examiners and other interested parties to monitor the services provided.

History

Authority: O.C.G.A. §§ 7-1-61, 7-1-663
History. Original Rule entitled "Debt Cancellation Contracts and Debt Suspension Agreements" adopted. F. July 28, 2003; eff. August 17, 2003.
Amended: F. July 7, 2022; eff. July 27, 2022.

Subject 80-2-8 Field of Membership

Ga. Comp. R. & Regs. r. 80-2-8-.01 Definitions {#sec-ga.-comp.-r.-regs.-r.-80-2-8-.01 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-8-.01}

(1) The field of membership of a state-chartered credit union shall consist of those persons, groups of persons, or organizations, each bound together by its own "common bond," i.e., a specific relationship of occupation, association or interest; residence or employment within a well-defined neighborhood, community, or rural district; employment; or membership in a bona fide cooperative, educational, fraternal, professional, religious, rural or similar organization. The common bond shall be such as would tend to create a mutual interest between persons sharing the relationship and must exist outside of the credit union itself. A common bond within a field of membership shall include persons related by blood, adoption, or marriage to or living in the same household with a person having the common bond as well as persons and surviving spouses of persons who are no longer within the common bond but who were members of the credit union in good standing when they left.

(2) Organizations, where more than 50% of the organization consists of employees, members, or owners within a non-geographic common bond shall be eligible for membership in the credit union under the same conditions as such employees, members or owners. Organizations that are headquartered within a geographic common bond shall be eligible for membership in the credit union under the same conditions as natural persons located within the field of membership.

History

Authority: O.C.G.A. §§ 7-1-61, 7-1-651, 7-1-663
History. Original Rule entitled "Definition" adopted. F. Aug. 17, 1983; eff. Sept. 6, 1983.
Repealed: New Rule entitled "Definitions" adopted. F. Aug. 15, 2005; eff. Sept. 4, 2005.
Amended: F. June 29, 2017; eff. July 19, 2017.
Amended: F. July 7, 2022; eff. July 27, 2022.

Ga. Comp. R. & Regs. r. 80-2-8-.02 Expedited Applications for Non-Geographic Group Common Bonds {#sec-ga.-comp.-r.-regs.-r.-80-2-8-.02 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-8-.02}

(1) Requests for approval of non-geographic common bonds can be submitted to the Department via an expedited application form so long as the following conditions are satisfied:

(a) The credit union must have received a CAMELS composite rating of "1" or "2" as a result of the most recent state or federal examination;

(b) The credit union must not be subject to any agreements, orders, or other enforcement or administrative agreements with the Department or the NCUA;

(d) The requested field of membership is not a geographic common bond;

(e) The requested field of membership is located entirely within the State of Georgia; and

(f) The requested field of membership satisfies all of the requirements in this rule and Rule 80-2-8-.03 .

(2) Notwithstanding the above, the Department may remove from expedited processing any credit union's application where it finds that:

(a) Safety and soundness concerns of the Department dictate a more comprehensive review;

(b) Other supervisory concerns, legal issues, or policy issues come to the attention of the Department;

(d) Any other good cause exists for denial or removal. In this event, the credit union will be notified that expedited processing is not available, the reason, and instructions as to how to proceed.

(3) The Department shall approve, deny, or remove from expedited processing any expedited application for field of membership approval within ten (10) business days of receipt of a completed expedited application.

History

Authority: O.C.G.A. §§ 7-1-61, 7-1-663
History. Original Rule entitled "Affiliated Organizations" adopted. F. Aug. 17, 1983; eff. Sept. 6, 1983.
Repealed: New Rule entitled "Affiliated Organizations as Additions to Non Residential Group Common Bonds" adopted. F. Aug. 15, 2005; eff. Sept. 4, 2005.
Amended: New title "Affiliated Organizations as Additions to Non-Geographic Group Common Bonds." F. June 29, 2018; eff. July 19, 2018.
Amended: New title, "Expedited Applications for Non-Geographic Group Common Bonds." F. July 7, 2022; eff. July 27, 2022.

Ga. Comp. R. & Regs. r. 80-2-8-.03 Requirements for Adding Additional Common Bond Groups to a Credit Union's Field of Membership {#sec-ga.-comp.-r.-regs.-r.-80-2-8-.03 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-8-.03}

(1) A field of membership may consist of more than one common bond. Pursuant to O.C.G.A. § 7-1-634 , application to the Department is required prior to a credit union amending its bylaws to add an additional common bond group.

(2) An application to add a common bond group must:

(a) Demonstrate that the application promotes competition and that broadens the availability of financial services to the proposed membership;

(b) Reserved;

(d) In the case of a non-geographic group common bond, demonstrate sponsor support for any new group sought such as the submission of a written request from a senior policy making official of the organization certifying that the organization desires inclusion in the credit union's field of membership; and

(e) Meet any additional requirements in this rule chapter.

(3) A credit union may expand its field of membership pursuant to this section only where:

(a) It has demonstrated sufficient managerial and financial capacity to safely and soundly serve such expanded membership; and

(b) It has developed a comprehensive business plan acceptable to the Department designed to accomplish such expansion program in a safe, sound and business-like manner.

(4) Requests for approval of additional groups of any type must be in writing and include evidence that all the requirements of this rule chapter have been met.

(5) The field of membership shall not be expanded to include the additional common bond group until:

(a) The Department approves the application;

(b) The Board of Directors amends the bylaws to add such common bond to the field of membership; and

(c) A copy of the amended bylaws, properly adding such common bond to the field of membership, is received by the Department.

History

Authority: O.C.G.A. §§ 7-1-61, 7-1-630, 7-1-634
History. Original Rule entitled "Community Financial Services" adopted. F. Aug. 17, 1983; eff. Sept. 6, 1983.
Amended: F. Oct. 12, 1989; eff. Nov. 1, 1989.
Repealed: New Rule entitled "Requirements for Occupational and Organizational Groups" adopted. F. Sept. 1, 2004; eff. Sept. 21, 2004.
Repealed: New Rule entitled "Requirements for Adding Additional Common Bond Groups to a Credit Union's Field of Membership" adopted. F. Aug. 15, 2005; eff. Sept. 4, 2005.
Amended: F. June 29, 2018; eff. July 19, 2018.
Amended: F. July 9, 2019; eff. July 29, 2019.
Amended: F. July 7, 2022; eff. July 27, 2022.

Ga. Comp. R. & Regs. r. 80-2-8-.04 Requirements for Geographic Groups {#sec-ga.-comp.-r.-regs.-r.-80-2-8-.04 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-8-.04}

(1) A credit union shall request approval from the department to add a geographic common bond group to its field of membership by an amendment to its bylaws. O.C.G.A. § 7-1-630(b) permits a common bond of a field of membership to be "residence or employment within a well-defined neighborhood, community, or rural district."

(2) Definitions for geographic groups:

(a) "Well defined" shall mean able to be described in writing and delineated by geographic or political boundaries on a map.

(b) "Neighborhood" shall mean a small part of a geographic unit considered in regard to its inhabitants or distinctive characteristics. It will have unifying characteristics such as recreational, associational or social facilities or functions for residents.

Residents share common political, environmental, geographical or economic characteristics that tend to create a mutual interest; or
Residents share common facilities or services such as an education or transportation system, recreational or cultural facilities, government, medical services, newspaper, fire or police protection, public utilities and services or other unifying characteristics that tend to create interaction or a mutual interest.

(d) "Rural District" shall mean an area that is outside a Metropolitan Statistical Area (MSA) as those areas are established from time to time by the United states Office of Management and Budget. It should also reflect a commonality of interest which may be participation or membership in agricultural, land use, or soil conservation districts or associations.

(3) A geographic group common bond request shall be accompanied by application to the department and a proposed change to the credit union's bylaws. In reviewing such application, the department shall consider:

(a) Whether the well-defined area has adequate unifying characteristics or a mutual interest such that the safety and soundness of the institution, and protection of the funds invested by members, is maintained;

(b) Consistent with Chapter 1 of Title 7, the ability of state credit unions to maintain parity and to compete fairly with their federal counterparts, and the law and rules of the National Credit Union Administration regarding community common bonds;

(c) Service by the credit union that is responsive to the needs of prospective members, to promote thrift and create a source of credit at reasonable rates;

(d) Protection for the interests of current and future members of the credit union; and

(e) The encouragement of economic progress in the state by allowing the opportunity to expand services and facilities.

(4) The applicant credit union shall have the burden to show to the department such facts and data that support the requirements and considerations in this rule and department policy.

(5) The department shall formulate detailed policies and procedures to guide credit unions in making applications for geographic groups, and to give specific requirements. The financial and managerial capacity of a credit union shall be a primary consideration for the department in approving any geographic group common bond. The credit union must demonstrate that the size, capability and experience of its management is adequate to meet the demands of the geographic group proposed. A comprehensive strategic and ongoing business plan will be required that addresses the services to be provided, impact on the credit union's capital and resources, adequacy of fixed assets, service distribution capability, data management facilities, and ability of management to recognize, monitor and control risk.

History

Authority: O.C.G.A. §§ 7-1-3; 7-1-61; 7-1-70; 7-1-630; 7-1-634; 7-1-663
History. Original Rule entitled "Other Changes" adopted. F. Aug. 17, 1983; eff. Sept. 6, 1983.
Amended: F. Jan. 27, 1995; eff. Feb. 16, 1995.
Amended: F. Dec. 18, 2000; eff. Jan. 7, 2001.
Repealed: New Rule entitled "Requirements for Residential Groups" adopted. F. Sept. 1, 2004; eff. Sept. 21, 2004.
Amended: F. Aug. 15, 2005; eff. Sept. 4, 2005.
Amended: F. June 15, 2015; eff. July 5, 2015.
Amended: F. June 29, 2017; eff. July 19, 2017.
Amended: New title "Requirements for Geographic Groups." F. June 29, 2018; eff. July 19, 2018.

Ga. Comp. R. & Regs. r. 80-2-8-.05 Repealed {#sec-ga.-comp.-r.-regs.-r.-80-2-8-.05 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-8-.05}

History

Authority: O.C.G.A. Secs. 7-1-61, 7-1-663
History. Original Rule entitled "Emergency Changes" adopted. F. Aug. 17, 1983; eff. Sept. 6, 1983.
Repealed: New Rule entitled "Other Changes" adopted. F. Sept. 1, 2004; eff. Sept. 21, 2004.
Repealed: F. Aug. 15, 2005; eff. Sept. 4, 2005.

Ga. Comp. R. & Regs. r. 80-2-8-.06 Emergency Changes {#sec-ga.-comp.-r.-regs.-r.-80-2-8-.06 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-8-.06}

The department may waive any provisions of this chapter in its discretion to facilitate the merger or combination of any credit union with a troubled or failing credit union.

History

Authority: O.C.G.A. Secs. 7-1-61, 7-1-663
History. Original Rule entitled "Emergency Changes" adopted. F. Sept. 1, 2004; eff. Sept. 21, 2004.

Subject 80-2-9 Investment Securities

Ga. Comp. R. & Regs. r. 80-2-9-.01 Investment Securities {#sec-ga.-comp.-r.-regs.-r.-80-2-9-.01 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-9-.01}

(1) Subject to such further restrictions and limitations as its board of directors may set forth in this investment policy, a credit union may purchase, sell and hold securities:

(a) Without limitation if such securities are:

The general obligations of the United States Government or any agency or instrumentality thereof;
Guaranteed as to principal and interest by the United States Government or any agency or instrumentality thereof; or
Separate Trading of Registered Interest and Principal of Securities which are offered exclusively in book entry form, are direct obligations of the United States, and are issued under Chapter 31, Title 13 USC.

(b) Without limitation if such securities are:

The general obligations of any state or territorial government of the United States or any agency of such governments;
Securities guaranteed as to principal and interest by such states or territorial governments or any agency of such governments;
The general obligations of counties, districts, and municipalities of any state or territorial government of the United States which is authorized to levy taxes;
Securities issued by counties, districts, and municipalities of any state or territorial government of the United States which are secured by a pledge or assignment of tax receipts sufficient to pay the principal and interest of such securities as they become due; or
Revenue obligations of counties, districts, and municipalities of any state or territorial government of the United States authorized to establish utility fees, public transportation usage fees, or public use fees where such levies or fees are pledged to and are sufficient to pay the principal and interest of the securities as they become due.

Revenue obligations issued by a political subdivision located within the United States where the repayment is dependent upon rentals or other fees payable to such political subdivision by a non-governmental unit, such as in the case of industrial revenue bonds. In such cases, the obligor for the purpose of applying legal limitations shall be the non-governmental unit responsible for the payment of such rentals or other fees and any guarantor of such payments;
Reserved;
Reserved; and
The securities are the securities of, or other interests in, any open-end or closed-end management type investment fund or investment trust which:

(i) Is registered under the Investment Company Act of 1940,

(ii) Expressly requires that any changes in the investment objectives, fundamental operating policies, and limitations of the fund or trust must receive prior approval by a majority of the shareholders authorized to vote on such matters,

(iii) Limits the investment portfolio of such investment fund or investment trust to:

(I) Obligations otherwise authorized under subparagraphs (1)(a)1., (1)(a)2., and (1)(a)3. of this Rule;

(II) Repurchase agreements, which are fully collateralized by securities authorized in subparagraph (1)(a)1., (1)(a)2., and (1)(a)3. of this Rule, and where the fund or trust takes delivery of such collateral either directly or through an authorized custodian; or

(III) Certificates of deposit issued by financial institutions insured by an instrumentality of the United States government, and;

(iv) Does not:

(I) Except to the extent authorized in subparagraph (1)(a)3. of this Rule, acquire investments in the form of stripped or detached interest obligations associated with any security which otherwise constitutes a permissible investment under the provisions of this Rule;

(II) Engage in the purchase or sale of interest rate futures contracts;

(III) Purchase securities on margin, make short sales of securities or maintain a short position; or

(IV) Otherwise engage in futures, forwards or options transactions, except, however, that forward commitments may be entered into for the express purpose of acquiring securities on a when-issued basis;

Bankers Acceptances and Subordinated Securities issued by financial institutions domiciled in Georgia or by financial institutions affiliated with a financial institution domiciled in Georgia;
Commercial paper issued by corporations domiciled within the United States which are rated in the four highest rating categories by a nationally recognized rating service;
Other securities issued by political subdivisions located within the United States which are rated in the four highest rating categories by a nationally recognized rating service;
Credit unions may invest in such other investment securities as may be authorized for federally chartered credit unions subject to the prior approval of the Department; or
Such other securities as the Department may approve and subject to such limitations as the Department may specify upon a finding that the securities are marketable under ordinary circumstances, with reasonable promptness, at a fair value.

(2) In the case of a corporate credit union, the Department may approve investments of the type described in subparagraph (1)(c) of this rule which may exceed fifteen (15) percent of net worth but in no event exceed 25% of net worth. Prior approval is required and may be subject to certain conditions of approval.

(3) Reserved.

(4) Asset backed securities repayable in both interest and principal which are issued under the following:

(a) Governmentally sponsored securities which are fully collateralized by obligations fully guaranteed as to principal and interest by a governmental entity may be purchased to the same extent as direct obligations of the governmental entity granting the guarantee; and

(b) Private label securities which are fully collateralized by obligations fully guaranteed as to principal and interest by a governmental entity may be purchased to the same extent as direct obligations of the governmental entity granting the guarantee.

(5)

(a) Except for those investments specifically authorized in subparagraph (1)(a)3. of this Rule, futures, forwards, option contracts, interest rate swaps, and direct and indirect investments associated with any security which otherwise constitutes a permissible investment under provisions of this Rule may be approved in writing by the Department for credit unions demonstrating technical expertise and policies sufficient to promote safe and sound use of such investments as part of prudent investment strategies.

(b) Notwithstanding the limitation in subparagraph (5)(a), a credit union may invest in derivative instruments, including forwards and interest rate swaps, without the approval of the Department so long as the investment is solely for the purpose of managing interest rate risk. Such investment must be denominated in U.S. dollars, have a contract maturity of fifteen (15) years or less, and be based on domestic interest rates or the Secured Overnight Financing Rate (SOFR), or similar replacement rate for the U.S. dollar-denominated London Interbank Offered Rate (LIBOR). A credit union must have technical expertise, sufficient policies and procedures, and adhere to safe and sound practices in making such investments.

(6) Subordinated debt is a security issued by a credit union after approval by the National Credit Union Administration, which may qualify as capital under federal regulatory capital guidelines. The subordinated debt must be scrutinized under the suitability analysis in this rule as if it was a loan being underwritten by the purchasing credit union. Subordinated debt is an authorized investment for a state credit union subject to compliance with the terms and conditions contained in this paragraph.

(a) Notwithstanding any provision in this rule to the contrary, the credit union's aggregate investment in subordinated debt shall not exceed the credit union's policy limits or twenty-five percent of net worth, whichever is less. For purposes of determining compliance, this aggregation requirement applies to all subordinated debt investments, whether purchased pursuant to this paragraph or any other paragraph of this rule.

(b) The securities shall be of investment quality or the credit equivalent of investment quality. Investment quality means that a rating in one of the four highest categories has been assigned to the securities by a nationally recognized rating service and, as such, are not predominantly speculative in nature. If the securities are not rated by a nationally recognized rating service, then credit equivalency shall be determined by the methods in subsection (c) of this rule.

(c) Before the purchase of subordinated debt, the credit union shall perform a due diligence suitability analysis to determine whether the subordinated debt is suitable for purchase relative to the credit union's tolerance for credit risk, asset liability position, sensitivity to market risk, and its liquidity exposure. Such analysis shall include, at a minimum, the following:

A complete credit analysis, including pro forma financial statements and cash flow analysis, sufficient to determine that the issuer is creditworthy and thus has the ability to meet the debt repayment schedule;
A review of the subordinated debt plan submitted by the issuing credit union to the National Credit Union Administration;
An analysis of the quality, capability, and leadership expertise of the management of the issuing credit union;
A marketability analysis, sufficient to determine whether or not the securities may be sold with reasonable promptness at a price corresponding to their fair value, which analysis may be supported by input from the placement agent for such securities;
The documentation of the suitability analysis shall be in written form and maintained in the credit union's files; and
A periodic update of the suitability analysis shall be performed by the credit union at least as frequently as annually during the term of the investment.

(d) The credit union shall obtain and monitor the securities' market values on an ongoing basis.

(e) The credit union's written policies and procedures shall adequately address the various risks inherent in these securities including credit risk, price or market risk, interest rate risk, and liquidity risk.

(7) Department Rule 80-2-4-.03(1) , authorizes credit unions to obtain shares of stock or interests in certain subsidiary or affiliates. A credit union may invest in such subsidiary or affiliate without the approval of the Department if it owns less than ten (10) percent of the subsidiary or affiliate and the ownership interest in the subsidiary or affiliate is less than ten (10) percent of the credit union's net worth. However, in the event the credit union wishes to have an ownership interest of ten (10) percent or more in the subsidiary or affiliate or an ownership interest in the subsidiary or affiliate that is ten (10) percent or more of the credit union's net worth, then it must obtain prior approval from the Department pursuant to subparagraph (1)(c)8. of this Rule.

(8) In the event a credit union's investment in securities no longer conforms to this Rule but conformed when the investment was originally made, the credit union shall provide written notification to the Department regarding the nonconforming investment within 30 days of discovering the nonconforming investment or 120 days of the investment becoming nonconforming, whichever event occurs first. In the event a credit union wishes to hold the nonconforming investment, the credit union must submit a letter form application to the Department including the institution's current assessment of the condition of the nonconforming security and supporting documentation that details the cause of the deterioration, severity of the deterioration, and resulting accounting treatment by the institution. Upon review of the application, the Department may request additional information if it determines such additional information is necessary in order to fully and completely evaluate the application. After completion of its review, the Department shall either approve, conditionally or otherwise, or deny such application in writing.

(9) A credit union may sell a nonconforming investment without Department authorization but only if it provides the Department with written notice no later than five (5) business days after the sale.

History

Authority: O.C.G.A. §§ 7-1-61, 7-1-663
History. Original Rule entitled "Investment Securities" adopted. F. Oct. 12, 1989; eff. Nov. 1, 1989.
Amended: F. July 7, 1994; eff. July 27, 1994.
Amended: F. July 14, 1998; eff. Aug. 3, 1998.
Amended: F. July 12, 1999; eff. Aug. 1, 1999.
Amended: F. Aug. 15, 2007; eff. Sept. 4, 2007.
Amended: F. June 10, 2014; eff. June 30, 2014.
Amended: F. July 7, 2022; eff. July 27, 2022.
Amended: F. July 7, 2023; eff. July 27, 2023.
Amended: F. June 18, 2025; eff. July 8, 2025.

Ga. Comp. R. & Regs. r. 80-2-9-.02 Accounting and Record Keeping {#sec-ga.-comp.-r.-regs.-r.-80-2-9-.02 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-9-.02}

(1) Securities transactions shall be accounted for in accordance with paragraph 1 of Rule 80-2-1-.01 .

(2) Credit Unions shall maintain documentation sufficient to identify adequately the nature of all securities owned. For all securities other than direct investments in government bonds, notes, or debentures, documentation may include annual reports, offering circulars, credit analyses published by nationally recognized rating firms, or in-house analyses, reflecting an evaluation of the degree of risk in regard to liquidity, marketability, and price volatility.

(3) Investments in the form of "Zero Coupon" obligations shall be recorded at cost plus accretion to maturity over the life of the obligations. Legal limitations applicable to such securities shall be measured against the actual cost of the security. Provided, however, to the extent that the cash investment plus accretions of income earned, but not collected, exceed the legal limitation on any zero coupon security, such amount shall be set aside into a capital reserve and excluded in considering capital adequacy.

History

Authority: Ga. L. 1974, p. 733
History. Original Rule entitled "Accounting and Record Keeping" adopted. F. Oct. 12, 1989; eff. Nov. 1, 1989.
Amended: F. Jul. 7, 1994; eff. July 27, 1994.

Ga. Comp. R. & Regs. r. 80-2-9-.03 Custody and Safekeeping {#sec-ga.-comp.-r.-regs.-r.-80-2-9-.03 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-9-.03}

(1) Securities may be held in physical or book entry form.

(2) Physical possession of securities shall be maintained:

(a) In the vault of the investing credit union, or

(b) In safekeeping at any:

Federally-insured correspondent bank, credit union or trust company,
Federal Reserve or Federal Home Loan Bank,
Broker-dealer insured under the Securities Investors Protection Act provided the market value of such securities does not exceed $500,000, or
As otherwise specifically approved by the Department.

History

Authority: Ga. L. 1974, p. 733
History. Original Rule entitled "Custody and Safekeeping" adopted. F. Oct. 12, 1989; eff. Nov. 1, 1989.
Amended: F. Jul. 7, 1994; eff. July 27, 1994.

Subject 80-2-10 Credit Union Voting Procedures

Ga. Comp. R. & Regs. r. 80-2-10-.01 Proxy {#sec-ga.-comp.-r.-regs.-r.-80-2-10-.01 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-10-.01}

The prohibition of Section 7-1-661 regarding vote by proxy makes it unlawful for any individual representative to cast a vote for another individual member of the credit union at any meeting. This does not preclude the authorized representative vote exception as provided in that section.

History

Authority: Ga. L. 1968, p. 465, Sec. 1
History. Original Rule entitled "Proxy" adopted. F. Jan. 27, 1995; eff. Feb. 16, 1995.

Ga. Comp. R. & Regs. r. 80-2-10-.02 Voting Procedures {#sec-ga.-comp.-r.-regs.-r.-80-2-10-.02 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-10-.02}

(1) Members may vote in person, by written ballot, or electronically. Voting by written ballot or electronically may occur prior to the membership meeting by mail, electronically, or at established ballot box locations, provided:

(a) The credit union's bylaws specifically authorize voting electronically or by mail ballot and/or ballot box voting;

(b) The Board of Directors of the credit union have officially adopted electronic, written mail ballot and/or ballot box voting procedures which assure that such voting occurs in an orderly, secure and controlled environment designed to preserve the one member one vote statutory requirement;

(c) The notice of the meeting includes a copy of the voting procedures. In the case of ballot box voting, a copy of the voting procedures must be prominently posted at each ballot box location; and

(d) The question being considered is clearly and fully stated in the notice of the meeting.

History

Authority: Authority O.C.G.A. Sec. 7-1-663
History. Original Rule entitled "Voting Procedures" adopted. F. Jan. 27, 1995; eff. Feb. 16, 1995.
Amended: F. Aug. 22, 2006; eff. Sept. 11, 2006.

Subject 80-2-11 Extensions of Existing Offices and Facilities; Auxiliary Services

Ga. Comp. R. & Regs. r. 80-2-11-.01 Automated Teller Machine ("ATM") and Night Depository {#sec-ga.-comp.-r.-regs.-r.-80-2-11-.01 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-11-.01}

An ATM machine, which by definition in O.C.G.A. § 7-1-664 takes deposits, and a night depository may be established anywhere in this state. Establishment of an ATM machine in this state does not constitute doing a banking business here.

History

Authority: O.C.G.A. § 7-1-664
History. Original Rule entitled "Expansion of Credit Union Fixed Assets; Letter Form Application and Regular Form Application; Requirements" adopted. F. Dec. 18, 2000; eff. Jan. 7, 2001.
Repealed: F. Oct. 22, 2001; eff. Nov. 11, 2001.
Adopted: New Rule entitled "Automated Teller Machine ("ATM") and Night Depository." F. Jan. 8, 2021; eff. Jan. 28, 2021.

Ga. Comp. R. & Regs. r. 80-2-11-.02 Mobile Credit Union Units {#sec-ga.-comp.-r.-regs.-r.-80-2-11-.02 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-11-.02}

(1) A credit union may provide unlimited banking services through mobile credit union units that do not have a single, permanent site and use a vehicle that travels to various locations to enable members to conduct the business of banking.

(2) A mobile branch may provide banking services at various regularly scheduled locations or it may be open in a defined area at varying times and locations. If the mobile branch provides banking services at regularly scheduled locations, then it shall be accessible to credit union members in accordance with a published schedule available on the credit union's website. In all circumstances, each mobile branch is required to maintain logs indicating the specific locations and times in which the mobile unit is operating in order to track branch activities.

(3) Each credit union providing mobile credit union unit services shall carry adequate fidelity, robbery, and hazard insurance coverage commensurate with the risks associated with the operation of such units.

(4) Disclosures shall be given to all members regarding when deposits will be credited and when checks or other withdrawals will be debited.

(5) Since a mobile unit will function as a branch, application for approval must be made as it is for all other branches.

(6) Credit unions may alter the banking service area set forth in paragraph 2 of this Rule by submitting advance written notification to the Department.

History

Authority: O.C.G.A. § 7-1-665
History. Original Rule entitled "Mobile Credit Union Units" adopted. F. Jan. 8, 2021; eff. Jan. 28, 2021.

Ga. Comp. R. & Regs. r. 80-2-11-.03 Account Service Representatives {#sec-ga.-comp.-r.-regs.-r.-80-2-11-.03 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-11-.03}

Credit unions lawfully doing a banking business in Georgia may provide for account service representatives to visit public events and commercial locations including governmental, educational, and health facilities for the purpose of opening deposit accounts and providing services incidental thereto; provided, access to such locations and facilities is available to other credit unions on a nondiscriminatory basis. Account paying and receiving services may not be provided during such visits other than an initial deposit to a new account.

History

Authority: O.C.G.A. §§ 7-1-61; 7-1-241
History. Original Rule entitled "Account Service Representatives" adopted. F. Jan. 8, 2021; eff. Jan. 28, 2021.

Ga. Comp. R. & Regs. r. 80-2-11-.04 School Savings and Banking Education Programs {#sec-ga.-comp.-r.-regs.-r.-80-2-11-.04 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-11-.04}

Credit unions lawfully doing a banking business in Georgia may participate in school savings and banking education programs, where such programs: are provided for minors in order to promote thrift or to provide banking and financial education; are supervised by a school official or an organization affiliated with the school on school premises or at a facility utilized by the school; and are in a location where the credit union would otherwise be authorized to have a branch. School savings program deposits are not considered received until they have been delivered to a representative of and at the participating credit union. Under a school savings program, checks are not considered paid until received by the participating credit union either directly or through a messenger acting as agent for the customer. These programs shall not be considered a branch office, provided the above provisions are met.

History

Authority: O.C.G.A. §§ 7-1-241; 7-1-650
History. Original Rule entitled "School Savings and Banking Education Programs" adopted. F. Jan. 8, 2021; eff. Jan. 28, 2021.

Ga. Comp. R. & Regs. r. 80-2-11-.05 Expansion or Extension of Branch Location {#sec-ga.-comp.-r.-regs.-r.-80-2-11-.05 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-11-.05}

(1) No notification is necessary for an extension that is an ATM, cash dispensing machine, night depository or point of sale terminal.

(2) If any other extension is located within the boundary lines of a single contiguous area of property owned or leased by the credit union and used as a branch location or if it is within 200 yards of such branch location, then the credit union must provide written notice to the Department of such extension. Such notification shall be in letter form and shall specify:

(a) Exact location of proposed extension;

(b) The nature of service that will be provided at the extension;

(d) Ownership of the location; and

(e) Cost of establishing the extension, and if site is to be leased, a copy of the proposed lease agreement.

(3) For all other extensions that are not addressed in paragraphs (1) and (2), a credit union must obtain prior approval from the Department by submitting a letter form application.

History

Authority: O.C.G.A. § 7-1-664
History. Original Rule entitled "Expansion or Extension of Branch Location" adopted. F. Jan. 8, 2021; eff. Jan. 28, 2021.

Subject 80-2-12 Credit Union Loans

Ga. Comp. R. & Regs. r. 80-2-12-.01 Loans Generally, Interpretations and Rulings {#sec-ga.-comp.-r.-regs.-r.-80-2-12-.01 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-12-.01}

(1) Lending limitations of Code Section 7-1-658 shall be computed quarterly as reported on the credit union's most recently filed call report; provided, however, that if significant capital changes occur after the filing of the call report which causes the net worth of the credit union to increase or decrease by 5 percent or more, then the legal lending limit will be immediately recalculated at the time of the capital change and it will be effective until the filing of the next call report. In determining whether the net worth capital has increased or decreased by 5 percent or more, each credit union will utilize the dollar amount reported on the applicable call report and recalculate its net worth if the dollar amount increases or decreases by 5 percent or more during the applicable time period.

(2) Where the lending limitations are reduced by recalculation, existing debt which was in conformity with the legal limitations at the time it originated shall not be construed to be non-conforming with new legal limitations.

(3) "Indirect" loans as used in Code Section 7-1-658 shall mean loans made for the substantial benefit of a third party where repayment of the loan is dependent on activities of the third party rather than solely dependent on the resources of the borrower and subject to the provisions of Rule 80-2-12-.05 .

(4) Loans by a credit union to any wholly-owned subsidiary of the credit union, which subsidiary is located within an approved office of the credit union and which has agreed to abide by all laws, rules and regulations applicable to the credit union shall be exempt from the twenty-five (25) percent maximum lending limit of the credit union.

(5) Wherever approval of the Board of Directors or Credit Committee is required, such approval must be a specific, prior, and written approval of each extension of credit, except that advances made under a master note covering a specific purpose or project need not receive specific approval where such approval was accorded the master note. Annual approval of a line of credit may be used where interest rate, repayment terms, and anticipated collateral are clearly identified and current credit information is on file. Commodity, floor-plan and discount lines of credit which are anticipated to exceed five (5) percent of the legal lending limit may be approved annually to be deemed appropriate by the Board of Directors without each transaction receiving specific prior approval.

(6) In determining whether or not a loan in excess of the five (5) percent limitation is secured by "good collateral and other ample security," the lack of a perfected lien, inadequate insurance, and insufficient margins between collateral value and the amount of the loan shall be prima facie evidence of inadequate security to the debt.

(7) A borrower's savings accounts or certificate of deposits in the lending credit union will be regarded as collateral to a loan when they are not subject to check or withdrawal, mature on or after the loan which is secured, are under the sole control of the credit union, and are properly assigned. Where, according to the terms of the deposit contract, the deposit is eligible for withdrawal before the secured loan matures, the credit union must establish internal procedures to prevent release of the security without the lending credit union's prior consent. If proper procedures are in place, such deposits will be considered as collateral. Where deposit balances are properly taken as collateral to a loan, the loan may be reduced to the extent of the deposit in determining the amounts loaned for either secured or unsecured legal lending limitations, as applicable.

(8) In determining the primary collateral basis upon which a loan is granted, that portion of the collateral having the greatest market value shall be assumed to be the primary collateral.

(9) In determining amounts loaned, all amounts guaranteed or insured by any instrumentality of the United States government shall be deducted to the extent of the guaranty or insurance coverage. Immediate and deferred participations on loans by an instrumentality of the United States government shall also be excluded. Where the source of repayment of a loan, i.e. lease payments, is guaranteed by an instrumentality of the United States government and such guarantee is assignable and has been assigned to the credit union, such loan may be excluded to the extent of the guarantee.

(10) Except as provided in this paragraph, exposures in the form of insufficient funds checks held beyond the permissible return date and overdrafts shall be considered "extensions of credit" solely for the purpose of determining compliance with the legal limitation as it applies to the maker of the check or owner of the overdraft. Such exposures shall also be subject to the requirements for prior written approval and ample collateral where the total indebtedness of the borrower exceeds five (5) percent of the credit union's net worth. Such exposures will not be considered extensions of credit for purposes of compliance with the above legal loan limitations and requirements, provided that the exposure is inadvertent, which requires that:

(a) The extension(s) do not exceed the aggregate amount of $1,000 at any one time; and

(b) The account is not overdrawn or the insufficient funds check held for more than five business days.

(11) Extensions of credit to political subdivisions of the State of Georgia authorized to levy taxes or backed by the taxing authority of another political subdivision shall qualify for exemption from the twenty-five (25) percent loan limitation under the provisions of O.C.G.A. § 7-1-658(g) , only where such extension of credit otherwise conforms with the provisions of Georgia Constitution, Article 9, Section 5.

(12) Pursuant to O.C.G.A. § 7-1-658(h) , a loan or extension of credit to a leasing company for the purpose of purchasing equipment for lease shall be considered a loan to the lessee, provided that:

(a) The credit union documents the basis for its reliance on the lessee as the primary source of repayment before the loan is extended to the leasing company;

(b) The loan is made without recourse to the leasing company;

(c) The credit union receives a security interest in the equipment and, in the event of default, may proceed directly against the equipment and the lessee for any deficiency resulting from the sale of the equipment;

(d) The leasing company assigns all of its rights under the lease to the credit union;

(e) The lessee's lease payments are assigned and paid to the credit union directly by the lessee; and

(f) The lease terms are subject to the same limitations that would apply to a credit union acting as a lessor.

(13) The Department shall promulgate a form which may be used to document compliance with the requirements for approval of loans and obligations in excess of 5 percent of the net worth of the credit union by members of the board of directors or credit committee as set forth in O.C.G.A. § 7-1-658(e) .

History

Authority: O.C.G.A. §§ 7-1-61; 7-1-658
History. Original Rule entitled "Loans Generally, Interpretations and Rulings" adopted. F. Aug. 15, 2007; eff. Sept. 4, 2007.
Note: Correction of typographical error in Rule title on SOS Rules and Regulations website. In accordance with the Official Compilation Rules and Regulations of the State of Georgia (as published September 4, 2007), "Loan Generally, Interpretations and Rulings" corrected to "Loans Generally, Interpretations and Rulings." Effective July 17, 2018.
Amended: F. June 27, 2018; eff. July 17, 2018.
Amended: F. Jan. 8, 2021; eff. Jan. 28, 2021.

Ga. Comp. R. & Regs. r. 80-2-12-.02 Real Estate Loans {#sec-ga.-comp.-r.-regs.-r.-80-2-12-.02 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-12-.02}

(1) A real estate loan shall be any loan secured by real estate where the credit union relies upon such real estate as the primary security for the loan. If the proceeds of the loan are used for the purchase of the real estate pledged, the loan will be presumed to be a real estate loan. Where the credit union relies substantially upon other factors, such as the general credit standing of the borrower, guaranties, or security other than real estate, the loan does not constitute a real estate loan, although as a matter of prudent underwriting it may also be secured by real estate, provided:

(a) Current credit information on the borrower and/or the guarantors is maintained to sufficiently show the credit worthiness of the borrower or guarantors is adequate to support the debt; and

(b) The other collateral is properly pledged to the credit union, protected by adequate hazard insurance, and supported by a statement of appraised or estimated value.

(2) A loan may be secured by a first lien although subordinate to another lien if:

(a) The credit union takes obligations of the borrower in an amount equal to the debt outstanding on the prior mortgage obligation plus the amount secured by such credit union's lien; and

(b) The credit union may at any time effect payment of the prior lien. In such case the credit union may require the borrower to make all mortgage payments to such credit union, with that credit union servicing the prior lien from such payments, provided that:

Where such "wrap around" arrangements are made, the credit union will obtain a statement from the borrower and the holder of the first lien that no further advances will be made to the borrower by the first lien holder and subject to its lien without the prior consent of the credit union, and that
The credit union may repay the first lien at its option with no penalty or a stated prepayment penalty.

(3) Conditions common to all real estate loans as to legal requirements and technical aspects shall be met, including but not limited to evidence of title search, recordation, an independent written appraisal or, in the alternative, a written estimate of market value in conformity with 12 CFR Part 722 (hereinafter "estimate"), and adequate insurance protection upon the insurable improvements with loss payable clause to the credit union. The lack of the foregoing technical requirements, while causing the loan to be technically defective, shall not be cause to consider the loan as nonconforming and in violation of law unless the total aggregate borrowings by the borrower exceed the unsecured lending limits of O.C.G.A. § 7-1-658 , in which case the real estate collateral will not contribute to the "ample security" of the line.

(4) Nonamortized commercial real estate loans shall not exceed seventy-five percent (75%) of the fair market value of the property pledged. Exemptions from this loan to value ratio for first liens are as follows:

(a) Loans to the extent secured in whole or in part by guarantees or commitments to take over, insure, participate in, or purchase the same, made by any governmental agency of the United States or entities sponsored by the United States, including corporations wholly owned either directly or indirectly by the United States.

(b) Loans which are fully guaranteed or insured by this State or by a State Authority.

(c) Commercial loans made for operating funds, working capital, or similar purposes, (other than the purchase of, investment in, or development of real estate) predicated upon the credit standing of the borrower or endorser, guarantor or co-maker, or other such security, but on which real estate collateral (including second mortgages) is taken as precautionary measure against possible contingencies may be exempt from the restrictions and limitations imposed upon real estate loans, provided such loans are supported (in addition to adequate credit information and/or collateral documents) by a general purpose statement signed by the borrower or by a credit memorandum signed by a loan officer, stating the purpose for which the loan is made and sufficient to indicate the exemption is valid.

(d) Loans representing the sale by the credit union of other real estate acquired for debts previously contracted shall be exempt from the limitations as to property values and membership requirements exempted by O.C.G.A. § 7-1-650(9) , but shall be subject to all other requirements of this regulation, provided that the amount so financed shall not be for a greater sum than the credit union's investments in such property.

(e) Loans which, when made, were either unsecured or secured by personalty, but which are now secured in whole or in part by liens on real estate taken in order to prevent loss on a debt previously contracted.

(5) All construction and development loans made or held by a credit union shall be exempt from the state loan to value and maturity limitations of this rule when made to comply with the following conditions:

(a) Loans having maturities not to exceed sixty (60) months may be made to finance the construction of industrial or commercial buildings where there is a valid and binding agreement entered into by a financially responsible lender to advance the full amount of the credit union's loan upon completion of the buildings.

(b) Loans having maturities not to exceed twenty-four (24) months may be made for residential construction or development purposes where the credit union holds a firm (or conditional) commitment to guarantee or insure from any instrumentality or corporation wholly-owned by the United States or by any Authority of this State as indicated in Rule 80-2-12-.02(4)(a) and (b) of this Rule, or where there is a take-out agreement by any financially responsible lender to advance the full amount of the credit union's loan upon completion of the dwelling.

(c) Temporary construction or development loans may be made by a credit union for a period not to exceed sixty (60) months where the loan is made to finance the construction of residential development which will exceed nine (9) units or industrial or commercial buildings, or for a period not to exceed twenty-four (24) months where the loan is made to finance construction of nine (9) or less residential units or farm buildings or to improve and develop land preliminary to such construction, without a prior commitment to guarantee or insure or take-out agreement by an instrumentality or corporation wholly-owned by the United States or of this State or any other financially responsible lending agency. The parties must actually intend the loan to be paid off or refinanced by a purchaser within the specified maturities and the lots, when development is residential, must be released periodically during the development of land for such purposes, and pro rata reductions must be made in the principal of the debt. All such temporary construction and development loans must be supported by a statement of purpose or intent, and if held beyond the construction or development periods, must be made to conform to the seventy-five percent (75%) and ninety-five percent (95%) limitations; otherwise, they will be held to be nonconforming real estate loans. For purposes of this Rule, 75% and 95% limitations are defined as loans for not more than 75% of the fair market value of the real estate in the case of a single maturity loan, or for not more than 95% of the fair market value of the real estate in the case of loans that must be regularly amortized.

(d) Commitments to guarantee, insure or purchase must be currently valid, and maturities of the loans may not be extended or loans held beyond the periods stipulated above.

(6) Except as otherwise provided in law or regulations, credit unions may not acquire directly or indirectly an ownership interest in real estate without the prior written approval of the Department.

History

Authority: O.C.G.A. §§ 7-1-61, 7-1-262
History. Original Rule entitled "Real Estate Loans" adopted. F. Aug. 15, 2007; eff. Sept. 4, 2007.
Amended: F. June 27, 2018; eff. July 17, 2018.
Amended: F. July 7, 2022; eff. July 27, 2022.
Amended: F. July 7, 2023; eff. July 27, 2023.
Amended: F. July 12, 2024; eff. Aug. 1, 2024.
Amended: F. June 16, 2026; eff. July 6, 2026.

Ga. Comp. R. & Regs. r. 80-2-12-.03 Participation Loans and Whole Loans {#sec-ga.-comp.-r.-regs.-r.-80-2-12-.03 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-12-.03}

(1) Credit unions may invest in loans made by other lenders. Credit unions may purchase one hundred percent or less of a loan as part of a participation. Alternatively, credit unions may purchase one hundred percent of a loan as a whole loan. Loans purchased must conform to all laws and regulations applicable to that category of loan to the same extent as if the purchasing credit union had originated the loan itself. Applicable statutory and regulatory requirements, including, but not limited to, collateral documentation requirements, loan to collateral value requirements, and loan limitations must be met. The purchasing credit union shall obtain from the selling lender copies of all pertinent collateral and credit documents or, solely in the case of a loan participation, a summary of information sufficient to conclude that all legal and regulatory requirements have been met.

(2) A credit union that purchases a loan has the responsibility of conducting loan underwriting procedures on the loan to determine that it complies with the policies of the credit union and meets the credit union's credit standards.

(3) The following additional requirements apply to a participation purchase in pools of loans and, those that are applicable, apply to a whole loan purchase in pools of loans:

(a) Loans in the pool or discount line must be specifically identifiable on the records of the selling lender.

(b) The participation agreement must call for the participant to share pro rata in losses experienced by the pool.

(c) The participation agreement must provide for a periodic, at least quarterly, report by the seller to the purchaser to account for settlement for losses incurred and to provide information on past due status of loans contained in the pool or discount line.

(d) Where the purchase exceeds the purchasing credit union's unsecured lending limit, the purchase must be accorded prior written approval from the Board or the Board-approved credit committee.

(e) The purchase in the pool must satisfy safety and soundness. In determining whether a participation in a pool of loans is safe and sound, the Department will consider:

The credit union's understanding of the selling lender's organization, business model, financial health, and the related risks of the participation;
The credit union's due diligence in monitoring and protecting against participation risks;
If contracts between the credit union and the selling lender grants the credit union sufficient control over the seller's actions and provides for replacing an inadequate servicer; and
Other factors relevant to safety and soundness.

(4) Where agreements exist for the seller to repurchase or indemnify loss, participation and whole loan purchases shall be treated as loans to the seller by the purchasing credit union and the amount of the purchase shall be considered to be remaining on the seller's books for the purposes of the seller's loan limitations.

(5) The purchasing credit union shall be deemed in compliance with the documentation requirements of this Rule so long as the credit union may electronically access, on demand, the required pertinent documentation required by this Rule.

History

Authority: O.C.G.A. §§ 7-1-61, 7-1-650, 7-1-663
History. Original Rule entitled "Participation Loans" adopted. F. Aug. 15, 2007; eff. Sept. 4, 2007.
Amended: New title "Participation Loans and Whole Loans." F. June 29, 2017; eff. July 19, 2017.
Amended: F. July 9, 2019; eff. July 29, 2019.
Amended: F. July 7, 2022; eff. July 27, 2022.

Ga. Comp. R. & Regs. r. 80-2-12-.04 Assets Acquired - Debts Previously Contracted ("D.P.C.") {#sec-ga.-comp.-r.-regs.-r.-80-2-12-.04 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-12-.04}

(1) All assets acquired through foreclosure or in lieu of foreclosure and all "Other Real Estate" acquired in such manner or otherwise shall be valued six (6) months prior to or three (3) months following the acquisition by an independent appraiser knowledgeable in the fair market value of such assets or, in the alternative, evaluated by a qualified officer of the credit union in conformity with the Evaluation Content portion of the Interagency Appraisal and Evaluation Guidelines (hereinafter "evaluation") if the book value of the property is less than two (2) percent of the net worth and allowances for credit losses of the credit union, $400,000 for residential property, or $500,000 for commercial property whichever amount is greater. Appraisals or evaluations subsequent to the initial valuation are required if, based upon a review of the following factors, there is a reasonable basis to determine that the prior valuation is no longer reliable as a reasonable estimate of the property's fair market value: volatility of local market; changes in terms and availability of financing; natural disasters; limited or over supply of competing properties; improvements to the subject property or competing properties; lack of maintenance of the subject or competing properties; changes in underlying economic and market assumptions, such as capitalization rates and lease terms; changes in zoning, building materials, or technology; and environmental contamination. In the event there is no basis to determine that the initial valuation is no longer reliable, then appraisals or evaluations shall be at intervals of not more than five (5) years.

(3) Extension of statutory ownership periods will not be granted for income purposes.

(4) Property subject to this rule shall be initially carried on the books of the credit union at the fair market value determined by independent appraisal or evaluation, unless otherwise provided, less the estimated costs to sell the property ("new basis"). This valuation shall be determined as of the date the credit union takes legal title to or physical possession of the property, whichever event occurs first. Subsequently, the carrying value shall be subject to write-down or write-up based upon the most recent appraisal or evaluation. However, the property must be carried at the lower of the current fair market value less the estimated costs to sell the property or the new basis. The new basis may be adjusted upward in the event the credit union makes any permanent capital improvements, subject to the limitations in paragraph (5), necessary to prepare the property for sale but the adjustment in the new basis shall be the lower of the increase in the fair market value of the property after the capital improvements or the amount expended to make the capital improvements. Non-capital improvements and expenses necessary to carrying and maintaining the property (taxes, legal fees, insurance, yard maintenance, etc.) shall be expenses and not added to the carrying value. Income earned from the property, other than from conversion or sale, shall be credited to income and shall not reduce the carrying value of the property.

(5) A credit union may make permanent capital improvements to property subject to this rule if the improvements are:

(a) Reasonably calculated to reduce any shortfall between the property's fair market value and the credit union's investment in the property;

(b) Not made for the purpose of speculation; and

History

Authority: O.C.G.A. §§ 7-1-61, 7-1-663, 7-1-650
History. Original Rule entitled "Assets Acquired - Debts Previously Contracted ("D.P.C.")" adopted. F. June 27, 2018; eff. July 17, 2018.
Amended: F. Jan. 8, 2021; eff. Jan. 28, 2021.
Amended: F. July 7, 2023; eff. July 27, 2023.

Ga. Comp. R. & Regs. r. 80-2-12-.05 Combination of Debt for Legal Lending Limit Purposes {#sec-ga.-comp.-r.-regs.-r.-80-2-12-.05 omnilex-key=us-ga-regs-official--department-80--Ga. Comp. R. & Regs. r. 80-2-12-.05}

(a) General Rule. Pursuant to Code Section 7-1-658 , loans or extensions of credit to one person will be attributed to another person and each person will be deemed a borrower: