With a 165-1 vote, the Georgia House passed a bill Monday to ease regulations that bankers say have made it difficult to renew some large loans -- even for borrowers who are current on payments.
The bill still has to clear the Senate, but was put on the fast track after the House's vote.
Rep. James Mills (R-Gainesville), chair of the House Banks and Banking Committee and the bill's chief sponsor, said the change will give state-chartered banks the same ability as national banks to renew loans with real estate developers and other big borrowers who are current on their payments.
“We don’t want our state-chartered banks to be on an uneven playing field with federal-chartered banks,” Mills said.
Banks would not be able to increase the size of the loans.
Currently, state-chartered banks are prohibited from making a loan in excess of 10 percent of their total capital, potentially betting too much on a single borrower.
Mills said his bill could boost Georgia’s struggling economy by helping businesses renew their performing loans and by helping community banks remain viable.
Rep. Bobby Franklin (R-Marietta) complained that the bill was rushed through the House and had no feedback in committee except from banking lobbyists. He cast the only vote against the bill in the House.
The bill, championed by the Georgia Bankers Association and the Community Bankers Association, is one of the first to clear one chamber since the General Assembly convened Jan. 11.
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