Department of Banking and Finance bulletin, Jan. 31, 2002

STATE OF GEORGIA
. . . .BULLETIN. . . .BULLETIN. . . .BULLETIN. . . .BULLETIN. . . .
STATE OF GEORGIA
DEPARTMENT OF BANKING AND FINANCE
2990 Brandywine Road, Suite 200 Atlanta, Georgia 30341-5565
DAVID G. SORRELL, ACTING COMMISSIONER

Phone: (770) 986-1633

Fax: (770) 986-1655

Internet Address: http://www.state.ga.us/dbf/ or http://www.gadbf.org January 31, 2002
The following is a summary of official action taken on applications by State Financial Institutions under Chapter 7-1 of the Code of Georgia and petitions for Certificate of Incorporation of Financial Institutions and other matters of interest during the month of January 2002. IN THIS ISSUE: No-Load Sweep Account Activity for Banks, Exclusion from Registration Requirements Notice to State Charters Performing Merchant Credit Card and ACH Clearing Activities DBF Website Changes and Additions Bank Director Financial Statements

APPLICATIONS FOR NEW FINANCIAL INSTITUTION
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STATE OF GEORGIA
FINANCIAL INSTITUTION
Generations Bank 336 Blue Ridge Street Blairsville, GA 30512 Union County
Piedmont Community Bank 110 Highway 18 Connector Gray, GA 31032 Jones County
First Bank of Henry County 120 Keys Ferry Street McDonough, GA 30253 Henry County First Chatham Bank (f/k/a Citizens & Southern Bank) 7401 Hodgson Memorial Drive
Savannah, GA 31406 Chatham County
Homestead Bank 1400 Peachtree Industrial Boulevard Suwanee, GA 30024 Gwinnett County

CAPITALIZATION
$ 6,500,000

APPROVAL DATE
Pending

BEGIN BUSINESS DATE

$ 7,000,000

01-09-2002

$ 7,633,550

07-28-2000

01-28-2002

$ 10,000,000

08-17-2001

01-23-2002
(Opened at Abercorn Street Bank Office)

$ 10,000,000

Pending

APPLICATIONS TO ESTABLISH A BRANCH OFFICE

FINANCIAL INSTITUTION
Bank of Alapaha Alapaha
Citizens Trust Bank Atlanta
SunTrust Bank Atlanta
SunTrust Bank Atlanta

BRANCH OFFICE
Adel Branch Office Intersection of E Fourth Street and Cleveland Avenue Adel, GA 31620 Cook County
Stonecrest Mall Branch Office 2929 Turner Hill Road, Suite 2850 Lithonia, GA 30038 DeKalb County Centennial Place Branch Office 523 Luckie Street Atlanta, GA 30313-2401 Fulton County
Bowie Town Center Safeway In-Store Branch Office 4100 Northview Drive Bowie, MD 20716 Prince George's County

APPROVAL DATE
01-07-2002
10-17-2001
02-01-2001
01-22-2002

BEGIN BUSINESS
DATE
01-04-2002
03-21-2001

SunTrust Bank Atlanta
SunTrust Bank Atlanta

Bryans Road Safeway In-Store Branch Office 3129 Marshall Hall Road Bryans Road, MD 20616 Charles County
Mount Airy Safeway In-Store Branch Office 337 E. Ridgeville Boulevard Mount Airy, MD 21771 Carroll County
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12-26-2001

01-16-2002

11-01-2001

01-16-2002

STATE OF GEORGIA
SunTrust Bank Atlanta
The Blackshear Bank Blackshear
Community Bank & Trust Cornelia
Southeastern Bank Darien
Chestatee State Bank Dawsonville
The Merchants & Citizens Bank McRae
The Merchants & Citizens Bank McRae
First Chatham Bank Savannah
Satilla Community Bank St. Marys
The Park Avenue Bank Valdosta
FLAG Bank Vienna
FLAG Bank Vienna

Monticello Marketplace Branch Office Monticello Avenue at Powhatan Parkway Williamsburg, VA 23188 James City County
Jesup Branch Office 375 W. Cherry Street Jesup, GA 31545 Wayne County
Walmart #520 Branch Office 440 Atlanta Highway NW Winder, GA 30680 Barrow County
Richmond Hill Branch Office 1925 Highway 17 Richmond Hill, GA 31324 Bryan County
Keith Bridge Commons Branch Office Georgia Highway 306 and Keith Bridge Commons Pkwy Cumming, GA 30041 Forsyth County
Oak Street Branch Office 850 E. Oak Street McRae, GA 31055 Telfair County
Mount Zion Street Branch Office Mount Zion Street Milan, GA 31060 Telfair County
Abercorn Street Branch Office 7917 Abercorn Street Savannah, GA 31406 Chatham County
Brantley County Branch Office 113 East Cleveland Street Nahunta, GA 31553 Brantley County
Hall County Branch Office 4058 Continental Drive Oakwood, GA 30566 Hall County
McDonough Village Branch Office 908 Hampton Road, Suite 1 McDonough Village McDonough, GA 30281 Henry County
Roswell Branch Office L.L. 412, 1st Dist., 2nd Sec. Roswell, GA 30075
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11-28-2000

01-14-2002

09-24-2001

01-07-2002

01-23-2002

11-06-2001

01-31-2002

01-31-2002

10-22-2001

01-02-2002

10-22-2001

01-02-2002

10-09-2001

01-23-2002

04-07-1999

01-22-2002

01-29-2002

11-05-2001

01-02-2002

Pending

STATE OF GEORGIA
United Bank Zebulon

Fulton County
North Church Street Wal-Mart Branch Office 855 North Church Street Thomaston, GA 30286 Upson County

12-18-2001

01-23-2002

PREVIOUS NAME
Citizens & Southern Bank Savannah

NOTICE OF CHANGE IN NAME

NEW NAME
First Chatham Bank

APPROVAL DATE
01-22-2002

EFFECTIVE DATE
01-23-2002

PROPOSED NAME
Capital Community Bank
First Chatham Bank

APPLICATIONS FOR RESERVATION OF A NAME

COUNTY
Clayton County

APPLICANT
Mr. Richard T. Hills, Attorney Womble Carlyle Sandridge & Rice 1201 West Peachtree Street, Suite 3500 Atlanta, GA 30309

Chatham County

Mr. Byron Richardson, Principal Bank Resources, Inc. 1000 Whitlock Ave, Suite 320 Marietta, GA 30064

McIntosh Commercial Bank SFNB (Georgia) Bank

Carroll County Fulton County

Mr. John B. Kline, CFE, Principal P. O. Box 724888 Atlanta, GA 31139-1888
Mr. Bin Tan Sullivan & Cromwell 125 Broad Street New York, NY 10004

FINANCIAL INSTITUTION (SURVIVOR)
The Park Avenue Bank Valdosta
Branch Banking and Trust Company Winston-Salem, NC

FINANCIAL INSTITUTION MERGERS

MERGED INSTITUTION
Eagle Bank and Trust Statesboro
Community First Bank Carrollton

APPROVAL DATE
10-30-2001
Pending

EFFECTIVE DATE
01-14-2002

APPLICATIONS TO BECOME A BANK HOLDING COMPANY AND/OR TO ACQUIRE VOTING STOCK OF A FINANCIAL INSTITUTION
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STATE OF GEORGIA
BANK HOLDING COMPANY
FORMATIONS
FCB Financial Corporation, Inc., f/k/a C & S Bancorporation, Inc. Savannah, GA
Folkston Investors, LLC Savannah, GA

TO ACQUIRE
First Chatham Bank Savannah, GA First National Corporation Folkston, GA

APPROVAL DATE
01-15-2002
Pending

ACQUISITIONS
Colony Bankcorp, Inc. Fitzgerald, GA
CITY
Milledgeville Athens Decatur Port Wentworth Macon Blue Ridge Atlanta Norcross Cartersville Atlanta Atlanta Decatur Decatur

Quitman Federal Savings Bank Quitman, GA

Pending

CHECK CASHER LICENSES ISSUED

APPLICANT NAME
American Eagle Leasing & Finance, Inc. Blue Diamond Investments Inc. Cash Atlanta, Inc. Cox's Mini Mart, Inc. EZ Mobile Check Cashing, Inc. Elite Armored Services LLC FaxyGram, Inc. Finanza Directo.com, Inc. Lee, Cho Ae Momo Enterprise, Inc. Snow Rock, Inc. Yee, Eun Sil Cash Atlanta, Inc.

TRADE NAME
Check Cashing Services Global News Stand Wesley Chapel Check Cashers Cox's Beverage Center EZ Mobile Check Cashing Elite Armored Services FaxyGram, Inc. USA Transfers Citgo Express Beverage City Package Denny's Super Save College Inn Liquor Wesley Chapel Check Cashers

APPROVAL OF ELECTRONIC DATA PROCESSING SERVICER

FINANCIAL INSTITUTION
Gainesville Bank & Trust Gainesville, GA

APPROVAL DATE
01-31-2002
NOTICES

No-Load Sweep Account Activity for Banks, Exclusion from Registration Requirements
The Department has received an informal interpretation from the Division of Securities of the Secretary of State's Office regarding whether state chartered banks that perform no-load sweep account activities are required to register under the Georgia Securities Act of 1973 (the Georgia Act). A state chartered bank has raised questions regarding the applicability of these requirements to banks that perform sweep account services to no-load, open-end investment funds. These activities were specifically exempted from Federal Registration requirements under the Gramm-Leach-Bliley Act ("GLBA"). The interpretation received indicates that pursuant to Georgia Rule 590-4-1-. 03(3) the Commissioner of Securities by and through the Acting Assistant Commissioner of Securities adopts as an informal Interpretation of the Georgia Securities Division the following: Consistent with the Georgia Act, the GLBA and the Securities Exchange Act of 1934, Banks organized under the laws of the United States or any bank organized
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STATE OF GEORGIA
and supervised under the laws of any state shall be excluded from the dealer registration requirements found in Section 3 of the Georgia Act specifically with regard to a bank engaging in effecting transactions as part of a program for the investment or reinvestment of deposit funds into any no-load open-end management investment company registered under the Investment Company Act of 1940 that holds itself out as a money market fund. This interpretation was effective December 20, 2001. It should also be recognized that this interpretation is based on the currently statutory language of the Georgia Act, and subsequent changes to the Georgia Act could materially impact this interpretation. If you have questions regarding this interpretation, please contact Deputy Commissioner for Supervision George A. Reynolds at (770) 986-1629.
NOTICE TO STATE CHARTERED FINANCIAL INSTITUTIONS PERFORMING MERCHANT CREDIT CARD AND ACH CLEARING ACTIVITIES
A number of banks are involved with merchant credit card activities in their financial institutions. While this provides a needed financial service to the community and can be profitable to the bank, these activities can be an area of substantial risk to a bank. Over the past several years, banks that perform merchant credit card activities for telemarketing or Internet merchants have experienced significant loss exposure due to unanticipated charge backs. These banks are responsible for these charge backs, provided that the consumer has followed the proper procedures under law. Additionally, the credit card companies can also levy monetary sanctions if chargeback activity exceeds certain established thresholds.
It is important that banks that are involved in this business develop the proper procedures and controls to mitigate this risk. Banks should have merchant acceptance procedures and should avoid providing this service for merchants that are high risk based on their operating and financial history. Merchants that provide goods through telemarketing or Internet marketing may represent higher risk and these accounts should be carefully reviewed during the acceptance process. These relationships should be underwritten in a method similar to a credit relationship, because in the event of unforeseen chargebacks, the bank will have to look to this merchant to cover the unanticipated exposure. There should be a written merchant agreement between the bank and the merchant that covers the responsibilities of the parties. The bank should monitor the financial position of the merchant and the volume of chargebacks on a continuing basis. In the event that a merchant fails to comply with the merchant agreement, the bank needs to move quickly to assess loss exposure and take actions to improve their position or exit the relationship. If third party marketers are used to establish new merchant account activity, it is vital that there be sufficient oversight over their activities to assure that the account acceptance procedures and other operating policies of the bank are being appropriately maintained.
A related area of business that has been noted in several neighboring states is for banks to provide ACH clearing activity for consumer transaction accounts. Again, certain activities for which this is being performed including telemarketing or Internet marketing create greater risk exposure and as in merchant credit card clearing activity, the clearing bank may be responsible for items disputed by consumers. Often, smaller community banks have been approached and the prospect of having an (initially) large merchant deposit account and the prospect of getting substantial fee income on every transaction is very attractive, but in some cases, the risk has not been considered in taking on this business. These relationships involve potential operational and credit risk as well as compliance risk to participating financial institutions Even though these are established as deposit accounts at the bank, it is important these relationships be underwritten like a loan relationship, since any properly disputed amounts are potential loans to the merchant, should the account balance be exceeded. Also it is vital that the bank have a written agreement with the merchant, establishing account and balance standards, established standards regarding chargebacks, legal liability provisions and provisions regarding termination of the agreement.
As in merchant credit card clearing activities, it is important to have account acceptance procedures, to make certain that the merchant's financial and operating characteristics are consistent with the risk profile and underwriting standards of the bank. The use of third party service providers for ACH processing can also heighten the risk characteristics and this feature necessitates the use of written agreements establishing approval procedures, dollar limits and other safeguards to control risk to participating financial institutions. The OCC recently released a Bulletin, OCC 2002-2, that deals specifically with ACH Transactions involving the Internet, that discusses the risks involved
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STATE OF GEORGIA
with these transactions and also provides a good overview of the ACH Network. This is available at http://www.occ.treas.gov/ If there are any questions regarding these issues, please contact Deputy Commissioner George A. Reynolds at (770) 986-1629.
DBF WEBSITE CHANGES AND ADDITIONS The Department's website has undergone a few changes that we wanted to bring to your attention. First, there is a new drop down menu in place that appears when you scroll over the items/icons down the left hand side of the webpage. Moving you mouse over the items will cause the drop down menu to appear, then you may select an item from the drop down menu and click on that item to go directly to that specific webpage or document. Second, we have implemented an online Field of Membership Expansion application for qualifying state-chartered credit unions. The online form can be accessed directly at: http://www.state.ga.us/dbf/fom/fom.cgi. Lastly, we have made available an "Assessment Calculator" for state-chartered banks and credit unions. The Assessment Calculator is an MS Excel spreadsheet that the bank or credit union can download and use to estimate their annual assessment fees to the Department. In addition, the spreadsheet can be used to calculate a surcharge or discount. The Assessment Calculator is available from the bank or credit union forms/applications page or can be accessed directly at: http://www.state.ga.us/dbf/docs/assessmentcalculator.xls.
BANK DIRECTOR FINANCIAL STATEMENTS Form 19-6 and 19-6a) Historically, the Department has mailed out a package of blank financial statement forms for directors (19-6a for existing directors and 19-6 for new directors) at the beginning of each year. However, these forms are now available on the Department's website at: http://www.state.ga.us/dbf/bank_related.html. Please retrieve these forms as needed from the Internet address noted above. If you have difficulty downloading and printing the forms, please contact Merian Croston at (770) 986-1658 to obtain these forms in hard copy. Back to Top
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