A helpful summary of the terms of the original GFLA can be found on the Federal Reserve Bank of Atlanta website, see "Georgia's Anti-Predatory Lending Law," online: Federal Reserve Bank of Atlanta <http://www.frbatlanta.org>.
See Mortgage Banking Association Business Alert, "Georgia Passes Fair Lending Act Amendments" (1 April 2003), online: All Business <http://www.allbusiness.com> (which reports that "[t]he bill clarifies ambiguities in the GFLA and repeals provisions that had caused many mortgage lenders to cease lending activities in Georgia since the GFLA became effective in October 2002").
Loans governed by the GFLA are categorized as "Home Loans",
Most importantly, however, the GFLA subjects assignees of Home
GFLA to severely weaken the law by essentially removing the assignee
to state banks (although the GFLA
remains in effect for other
"This determination is based on Standard & Poor's assessment that investors cannot be insulated from the potential liability resulting from violation of the GFLA
, either through credit enhancement or legal structure," S & P stated.
While representatives in the mortgage industry and ratings agencies welcomed changes to GFLA in their initial responses, consumer advocates and some legislators vow to continue the battle to restore consumer protections compromised by the amendments.
One of the unique features of the original GFLA was broad-based pass-through liability, which extended responsibility for violations of the lending provision from the originator of the loan to any future holders of the loan.
Knowingly Violating GFLA carried criminal penalties, including six months in prison.
* Repeals the second category of "covered loans" that had even lower rate and points-and-fees thresholds than the "high-cost home loan" category established by GFLA
. The bill does not alter the "high-cost home loan" category.
was intended to protect home-equity borrowers against predatory lending practices, its actual effect has been to restrict Georgians' access to credit, according to NHEMA.