In the first bill this session to get Gov. Sonny Perdue’s signature, HB 926 became law and will help locally chartered banks.
The bill, which passed the Senate Thursday afternoon by a 52-0 vote and was signed by Perdue at 3:30 p.m., will allow law banks to be able to renew loans with existing customers even if financial strain has made that loan above the normal lending limit. However, the law does not require banks to renew the loans.
“This legislation will increase stability in Georgia banking,” Perdue said. “This is a bill that strengthens already existing lender-borrower relationships and allows loans in good standing to be renewed, which helps both the bank and the borrower.”
Current state law restricts banks from lending more than 15 percent of their capital to any one borrower. According to supporters of the bill, the current law has had the unintended consequence of disallowing banks to renew loans, even for trusted customers. The bill gives more flexibility to state-chartered banks whose legal lending limit has been lowered because of declining capital.
“This gives banks leeway to apply good banking principles instead of just applying code,” said Sen. Jim Butterworth (R- Cornelia), who carried the bill in the Senate. The bill, originally sponsored by Rep. James Mills of Gainesville, passed the House last week by 165-1 vote.
With Perdue’s signing of the bill, it immediately becomes law.