. . . .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/
February 28, 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 February 2002.
IN THIS ISSUE: Alert Regarding Security Vulnerabilities in the Simple Network Management Protocol Banks Charging "Loan Fees" and Potential Interest and Usury Implications Per Loan Fee ($6.50 fee) on Georgia Residential Real Estate Loans Payment of $6.50 Mortgage Fees and Return of Fee Statement Form
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APPLICATIONS FOR NEW FINANCIAL INSTITUTION
FINANCIAL INSTITUTION
Generations Bank 336 Blue Ridge Street Blairsville, GA 30512 Union County
CAPITALIZATION APPROVAL DATE
$ 6,500,000
Pending
BEGIN BUSINESS DATE
Homestead Bank 1400 Peachtree Industrial Boulevard Suwanee, GA 30024 Gwinnett County
$ 10,000,000
Pending
APPLICATIONS FOR DISSOLUTION
FINANCIAL INSTITUTION
Southern Frozen Foods Employees Credit Union Montezuma, GA
APPROVAL DATE
02-11-2002
EFFECTIVE DATE
APPLICATIONS TO ESTABLISH A BRANCH OFFICE
FINANCIAL INSTITUTION
SunTrust Bank Atlanta
BRANCH OFFICE
Ingleside Safeway Branch Office 5660 Baltimore National Pike Baltimore, MD 20716 Baltimore County
APPROVAL DATE
02-19-2002
BEGIN BUSINESS
DATE
02-28-2002
SunTrust Bank Atlanta
Hamilton Mill North Branch Office 3480 Georgia State Highway 124 Ducula, GA 30019 Gwinnett County
02-07-2002
SunTrust Bank Atlanta
Purchase of 108 Florida Branch
Offices from The Huntington National Bank Columbus, OH-List of branches
Click Here to Access the List of Branches (pdf file)
11-02-2001
02-19-2002
Community Bank & Trust Cornelia
Walmart #520 Branch Office 440 Atlanta Highway NW Winder, GA 30680 Barrow County
01-23-2002 02-20-2002
Appalachian Community Bank Ellijay
Blue Ridge Branch Office 2835 Scenic Drive Blue Ridge, GA 30513 Fannin County
08-20-1999 02-07-2002
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FINANCIAL INSTITUTION
South Georgia Bank Glennville
United Bank & Trust Company Rockmart
The Coastal Bank Savannah
The Citizens Bank of Swainsboro Swainsboro
FLAG Bank Vienna
BRANCH OFFICE
Reidsville Branch Office 211 South Main Street Reidsville, GA 30453 Tattnall County
Cartersville Branch Office 2 North Dixie Avenue Cartersville, GA 30120 Bartow County
Rincon Branch Office 5771 Highway 21 South Rincon, GA 31326 Effingham County
Dublin Branch Office 1210 Hillcrest Parkway Dublin, GA 31021 Laurens County
Roswell Branch Office L.L. 412, 1st Dist., 2nd Sec. Roswell, GA 30075 Fulton County
APPROVAL DATE
02-28-2002
BEGIN BUSINESS
DATE
02-07-2002 02-20-2002 02-04-2002
Pending
APPLICATIONS TO CHANGE LOCATION
FINANCIAL INSTITUTION
Citizens Bank and Trust of West Georgia Carrollton
CHANGE LOCATION OF
Temple Branch Office
From: 354 Sage Street
Temple 30179
Carroll County
To:
240 Carrollton Street
Temple 30179
Carroll County
APPROVAL DATE
08-03-2001
EFFECTIVE DATE
12-17-2001
NOTICE OF CHANGE IN NAME
PREVIOUS NAME
The Glennville Bank and Trust Company Glennville
NEW NAME
Glennville Bank
EFFECTIVE APPROVAL DATE DATE
Pending
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PROPOSED NAME
Community Capital Bank
First Bank of the South
TrustBank
APPLICATIONS FOR RESERVATION OF A NAME
COUNTY
Clayton County
APPLICANT
Mr. Richard T. Hills, Attorney Womble Carlyle Sandridge & Rice 1201 West Peachtree St., Ste 3500 Atlanta, GA 30309
Gwinnett County
Ms. Lynn G. Schroeder, Attorney Powell Goldstein Frazer & Murphy 191 Peachtree St., NE, 16th Floor Atlanta, GA 30303
Cobb County
Mr. David Valentino, Attorney Powell Goldstein Frazer & Murphy 191 Peachtree St., NE, 16th Floor Atlanta, GA 30303
FINANCIAL INSTITUTION MERGERS
FINANCIAL INSTITUTION (SURVIVOR)
Branch Banking and Trust Company Winston-Salem
MERGED INSTITUTION
Community First Bank Carrollton
APPROVAL DATE
Pending
EFFECTIVE DATE
APPLICATIONS TO BECOME A BANK HOLDING COMPANY AND/OR TO ACQUIRE VOTING STOCK OF A FINANCIAL INSTITUTION
BANK HOLDING COMPANY
TO ACQUIRE
APPROVAL DATE
FORMATIONS
Georgia Community Bancshares, Inc.
Dalton, GA
Georgia Community Bank (FSB in organization)
Dalton, GA
02-15-2002
Community Financial Holding Company, Inc.
Duluth, GA
Gwinnett Community Bank Duluth, GA
Folkston Investors, LLC Savannah, GA
First National Corporation Folkston, GA
Pending 02-20-2002
ACQUISITIONS
Colony Bankcorp, Inc. Fitzgerald, GA
Quitman Federal Savings Bank Quitman, GA
02-26-2002
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APPLICATIONS FOR NEW SALE OF CHECK
FINANCIAL INSTITUTION
Fast Petroleum, Inc. Dalton, GA 30720
APPROVAL DATE
02-27-2002
EFFECTIVE DATE
02-27-2002
Merchants Express Money Order Company Wormleysburg, PA 17043
02-20-2002
02-20-2002
CITY
Jesup Cumming
CHECK CASHER LICENSES ISSUED
APPLICANT NAME
Jalaram Enterprises, Inc. Legacy, Inc.
TRADE NAME
Oaktree Liquor/A to Z Package World Beverage
APPROVAL OF ELECTRONIC DATA PROCESSING SERVICER
FINANCIAL INSTITUTION
Center of Financial Technologies, Inc. Evanston, IL
APPROVAL DATE
02-26-2002
N O T I C E S
Alert Regarding Security Vulnerabilities in the Simple Network Management Protocol
The Federal Reserve has forwarded an alert to their member banks, other regulatory agencies and financial institutions regarding significant vulnerabilities in the Simple Network Management Protocol ( SNMP). This protocol is a widely used Internet protocol and all financial institutions that utilize the internet, whether or not they have an active internet presence should familiarize themselves with these concerns. A research paper that includes technical discussions of SNMP vulnerabilities has recently been published on the Web, and a link to this is provided below. We recommend that you take appropriate steps to familiarize yourself with these concerns and take actions to implement best practices such as those recommended in this article, to protect the integrity of information systems and safeguard customer information. The Web site link provides an overview of SNMP and provides possible solutions for addressing these vulnerabilities. Note that the technical content of this link is fairly high, so it may be advisable to review these recommendations with your Information Systems Officer or other appropriate personnel.
http://www2.fedcirc.gov/advisories/FA-2002-03.html
Alert: Banks Charging "Loan Fees" and Potential Interest and Usury Implications
The Department has previously addressed the issue of loan fees and interest and usury implications in our August 31, 1999 Bulletin. It has come to our attention that some bankers are continuing to charge certain loan fees on small loans
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less than $3,000 that are not being made under the Georgia Industrial Loan Act (GILA). Bankers should be aware that Georgia Case law has in a number of cases interpreted that for the purpose of determining criminal usury, such fees can be considered in the definition of interest, and as such can result in situations where a financial institution can be charging interest in excess of the Criminal Usury Limit of 60% per annum, contained in 7-4-18.
These cases include Norris v. Sigler Daisy Corporation, a 1990 Georgia Supreme Court Case, as well as Fleet Finance, Inc. v Jones et al, a 1993 Georgia Supreme Court Case. The court, in these cases, included loan administration fees in the calculation of interest for determining compliance with 7-4-18.
Due to this case law and interpretations therein, the Department has recommended for the last several years that banks consider processing fees to be interest for the purposes of calculating interest under 7-4-18. In addition the Department expects such fees to be properly documented and applied consistently for any given class of loans. These fees, however, will be considered interest for purposes of criminal usury. Fees should represent the actual cost of making the loan, or actual cost of whatever they are represented to cover. If your bank has been utilizing a memo dated February 12, 1980 on this subject, you need to be aware that the above case law has rendered this memo to be not current and financial institutions should not be utilizing this memo for guidance regarding this issue.
We have recently encountered several instances where financial institutions were not fully aware of the above recommendations and where violations of 7-4-18 may have occurred. Please be aware that being in violation of the Criminal Usury statute is a serious situation for a financial institution with potential legal, financial, and reputational risk. If your bank is using such a fee structure, we strongly recommend that you review this structure or have bank counsel do so, to insure that it complies with usury limitations. If you have any questions in this regard, please contact your District Director or Deputy Commissioner George A. Reynolds.
We have also been advised by bankers that there are payday lending and similar lending programs, such as catalog sales operations going on in their communities at much higher rates to consumers. As you should be aware, Payday Lending is not permitted in this State at rates and fees higher than those contained in the Georgia Industrial Loan Act. Bills to establish Payday Lending restrictions have been presented in the Georgia Legislature the past several years but none have passed into law. We have implemented an aggressive program to make sure this is not being done in the Licensed Check Cashers that are under our jurisdiction. We do not have statutory responsibility regarding other small lenders, but if you believe that you have lenders operating in your community that are lending in excess of statutory limits, please bring this to the attention of the Insurance Commissioner's Office. We will forward any complaints of this nature that we receive to their attention.
Per Loan Fee ($6.50 fee) on Georgia Residential Real Estate Loans
We have become aware that there may be confusion regarding the per loan fee to be paid by the secured party on each security deed filed in connection with a residential real estate mortgage loan as required by O.C.G. A. Section 7-1-1011 and Rule 80-5-1 of the Department's Rules and Regulations.
The Georgia Residential Mortgage Act (GRMA) defines a mortgage loan as a loan or agreement to extend credit made to a natural person, which loan is secured by a deed to secure debt, security deed, mortgage, security instrument, deed of trust, or other document representing a security interest or lien upon any interest in one-to-four family residential property located in Georgia, regardless of where made, including the renewal or refinancing of any such loan. The $6.50 fee will be due if the loan is a residential mortgage loan as defined in the Georgia Residential Mortgage Act, and if a security deed, a modification of a security deed, or other form or modification of a security interest is recorded. Second homes and rental property are excluded. In addition, a change to a security instrument
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made solely for the purpose of correcting a clerical error will not be subject to a $6.50 fee.
The purpose of the loan or the use of the proceeds has no bearing in regard to the definition of a residential mortgage loan. The taking of a security deed on residential real property located in Georgia is the key determinant.
Once you are aware of the above definitions we believe that it becomes a relatively simple matter to determine the types of loans which are covered by the requirement to pay the per loan fee. The determination that a loan is covered can be made by answering two questions:
1. Is the loan in question a residential mortgage loan as defined in GRMA?
2. Was a new security deed or a security deed modification agreement recorded to perfect the lender's security interest in the Georgia residential real property?
If the answer to both of these questions is yes, the per loan fee must be paid.
Payment of $6.50 Mortgage Fees and Return of Fee Statement Form
REMINDER!!! REMINDER!!! REMINDER!!!
Payment of $6.50 Mortgage Fees and Return of Fee Statement Form were due March 1, 2002. All financial institutions, lenders and brokers that close mortgage loans are responsible for collecting and remitting the $6.50 Georgia Residential Mortgage Act (GMRA) fees, pursuant to Rule 80-5-1-.04 of the Department. The Department mailed GMRA Fee Statement letters to all lenders and financial institutions regarding fees due for the period from June 1 to December 31, 2001. The GMRA Fee Statement Form, which contains your identification number, should have been returned with payment for processing by the Department no later than March 1, 2002. If payment includes fees due from subsidiaries or affiliates, please indicate the name and the amount for each entity.
It is important that the Fee Statement and fees due be submitted to this Department no later than March 1st to avoid assessment of a Fine. Your failure to remit the Fee Statement and fees may result in the assessment of a $1000 Fine and may result in formal administrative action against you, the financial institution, or company and the Department may rescind or revoke any license previously issued.
The Fee Statement Form can be obtained from the Department's website at http://www.state.ga.us/dbf/650feest.html . The Form may be completed and printed online and should be faxed or mailed to the Department.
If there are any questions concerning these issues, please feel free to contact either Deputy Commissioner for Mortgage, Robley S. Rigdon at rigdon@dbf.state.ga.us at (770) 986-1374 or Deputy Commissioner for Supervision, George A. Reynolds at reynolds@dbf.state.ga.us at (770) 986-1629.
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