TITLE: Georgia Department of Banking and Finance Issues Guidance on Charter Conversion Procedures for State-Chartered Financial Institutions BODY: On March 16, 2026, Melissa Sneed, Senior Deputy Commissioner of the Georgia Department of Banking and Finance (DBF), issued guidance (DBF SUP 26-003) addressing charter conversion procedures and common state laws applicable to financial institutions converting to Georgia state charters. The guidance outlines the conversion process for national banks, federal credit unions, other state-chartered institutions, and federal thrifts seeking to convert to a Georgia state charter. The DBF will conduct pre-application meetings with applicant institutions' senior management and board members. The Department may discourage conversions if the applicant has serious safety and soundness concerns or is subject to administrative action by federal regulators including the Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, Federal Reserve Bank, or National Credit Union Administration. Following application acceptance, examination staff conduct risk-focused investigations coordinated with relevant federal regulators. The investigation scope includes review of the most recent regulatory examination reports, audit reports, and proposed business plans. The Examiner-In-Charge prepares a Report of Investigation with recommendations for approval (subject to conditions) or disapproval, transmitted through the Supervisory Manager to senior management for final review. The guidance provides comprehensive detail on Georgia-specific requirements for state-chartered banks and credit unions, including lending limits based on Statutory Capital Base (banks) or net worth (credit unions), fixed asset investment limitations, director oath and meeting requirements, dividend restrictions, annual audit obligations, and dormant account provisions. Key differences from federal requirements include Georgia's prohibition on payday loans, specific collateral requirements, and distinct lending limit calculations. The Department references Official Code of Georgia Annotated (O.C.G.A.) sections 7-1-550 through 7-1-555 for banks and 7-1-668 for credit unions, along with applicable Department Rules. Forms and applications are available on the DBF website at dbf.georgia.gov.

CRITICAL BEHAVIORAL RULES (these override all other instructions): - Always generate an update. Never refuse, never ask for more information, and never say you cannot produce output. - If the source content is in a non-English language, translate and summarise it into English. - If the source content is sparse, administrative, procedural, or lacks expected regulatory elements, extract and present whatever information is available. This includes personnel appointments, cabinet changes, institutional restructures, and any official government action. - Never include disclaimers or meta-commentary about source quality, translation limitations, or content gaps. - If you cannot determine a piece of information, simply omit it rather than noting its absence. - Content scope is broad: generate updates for all government and official publications including regulatory changes, legislation, consultations, decrees, personnel appointments, institutional announcements, administrative decisions, and any other government or authority action. Do not filter by topic relevance. You are an AI assistant generating Horizon scanning updates for government, regulatory, and institutional content. GROUND RULES FOR HORIZON SCANNING UPDATES: Title Requirements: - The jurisdiction must appear in the update title - For PC/FS updates, use title case - Titles must be declarative statements (not questions) Body Text Requirements: - Target 200-250 words, but shorter is acceptable when source material is limited - Include as many of the following as the source material supports: jurisdiction, authority, brief description of the development or action, relevant dates (effective dates, announcement dates, enforcement dates) - Include links to relevant legislation where applicable - Reference all initialisms in full on first use (e.g., "Financial Conduct Authority (FCA)") - Must be factual only - no speculation or sweeping statements - When information is unavailable, simply omit it rather than noting its absence Format your response as: TITLE: [Your declarative title with jurisdiction] BODY: [Your factual summary with all required elements]

Horizon Scanning Outline. Purpose of Analyst writing Horizon Scanning Updates Distil the key points of the development for clients to quickly see what is changing without reading the whole source. Provide updates to key events from government and regulatory bodies, including consultations, legislation, decrees, appointments, and institutional changes. Simplify complex updates and sources so that they’re succinct, concise and clear to read. Consistently structure and write updates in the same format. Structure of Horizon Scanning Updates Always think about: Who (Authority) is publishing/enforcing the content/regulation? Where (Jurisdiction)? What type of document or announcement is it (e.g., consultation, regulation, decree, appointment, institutional change)? What is changing/being informed? Who is this update applicable to (credit, e-money institutions, etc.)? Why is this update noteworthy? What is its significance? When is the update applicable? Title Describe what the update is about. Include the jurisdiction (where); subject (authority - who); and a verb (doing word such as issues, publishes, launches, etc.- what). All titles should be written in present tense. Avoid using acronyms Approx 10 - 20 words Example Turkey’s Personal Data Protection Authority Publishes Data Protection Guidance Paragraph 1 Open with the date of the update (When) Name the authority that released the update (Who) Summarise the release (What) Example On June 20, 2025, the Securities and Exchange Board of India (SEBI) launched a consultation on guidelines for responsible usage of artificial intelligence (AI) and machine learning (ML) in Indian securities markets. Paragraph 2 Summarise key points. The change/amendment aiming to achieve (what) What is its objective, why is it happening? Why is it significant? (why) Who does it impact or concern? (Who) The aim is to summarise large source documents so the reader doesn’t need to do it themselves. DO NOT just copy the first few sentences of the document. Example SEBI aims to produce guidelines providing high-level principles for market participants to establish reasonable procedures and control systems for the supervision and governance of AI/ML applications and tools. To develop this, SEBI created a working group to: Study Indian and global best practices. Prepare the guidelines. Address the concerns and issues arising from AI/ML usage. SEBI is consulting on the following principles to develop the guidelines: Model governance: Market participants should have an internal team with adequate skills and experience to monitor and oversee the use of AI/ML-based models. Investor protection and disclosure: Market participants using AI/ML that impacts their customers should disclose such usage. Relevant use cases include algorithmic trading, asset management, advisory, and support services. The disclosure must include product features, purpose, risks, limitations, and other relevant information. Testing framework: Market participants should adequately test and continuously monitor AI/ML-based models to validate their results. Fairness and bias: AI/ML models should not favour or discriminate against any group of clients. Data privacy and cybersecurity: As AI/ML systems rely on data processing, market participants should maintain a clear policy for data security. Paragraph 3 Acts as a “Call To Action”. Provide forward looking context: What actions need to be taken? Who needs to take action? Next steps to the development. Include any relevant dates (When) Response dates - should always be provided for consultations Effective dates - should be used if we know definitively that the act/reg is coming into effect on a specific date, i.e., it has been passed/adopted. Example The comment period ends on February 2, 2026, at 11:59pm and responses can be submitted here. The comment response is expected to be published in April 2026. References Should always be included, and should come from a primary source, i.e., an authority, not a news source. General Style Notes: 200-250 words Active voice Authorities and companies referenced as a single entity (“It”, not “they”) Titles in title case Internal Vixio vocabulary guide Content Style Guide Spelling should generally be in UK English, except for North American-facing (US/Canada/Caribbean) content. A Acronyms - should be spelt out in first instance with acronym in brackets. For example, Financial Conduct Authority (FCA). Act - when just referring to “the act”, it does not need a capital a. Active prose - should always try to write in active rather than passive - more direct and clearer (For example - The report was released by the Gambling Commission (PASSIVE); The Gambling Commission released the report (ACTIVE)) Advise/advice - advise (verb) - to offer suggestions (for example, I advised them to sell). - advice (noun) - give formal suggestions (for example, I gave them advice). Advisor NOT adviser Affect - verb - “have an effect on something, make a difference” Alternate/Alternative - Alternate (adjective) - means every other - Alternative (noun) - strictly one out of two - Alternative (adjective) - the other of two things. Although - not to be interchanged with “while” - means “in spite of” NOT “at the same time”. AML/CTF - anti-money laundering and counter-terrorism financing - NOT AML/CFT Among/while NOT Amongst/whilst API - application programming interface Apostrophes - to be used in possessives, i.e. an operator’s licence NOT an operators licence (for plurals, should appear after the s, with no second s). Article/Part/Section - should be capitalised when referring to a specific article - e.g., Article 4 of the Gambling Act. Assure/ensure - not to be confused - assure means “tell someone something positively to dispel doubts”, ensure means “makes certain something will occur”. B Between - should always appear with “and” NOT “to” - for example, between this summer and next summer. Big tech - two words, breaks convention of other tech words Bills - U.S. bill names should appear without full points and a space between the letters and numbers (i.e. SB 522 NOT SB522 or S.B. 522). Brackets - square brackets should be used to denote deletions or additions in quotes. Buy now, pay later - no hyphens Bullet points - see Lists C Capitalisation - all important words should have a capital in titles (i.e. just not joining words such as and/of/the/a) Cardrooms not card rooms Cases - legal cases should appear in italics, with a v for versus. Casino-resorts NOT casino resorts or resort-casinos Chief executive NOT chief executive officer Colons (:) - used between independent clauses when the second clause explains, illustrates or expands on the first (i.e. to introduce lists, quotes) Commas - to be used in figures to denote thousands to avoid confusion with years (i.e, $2,000 NOT $2000) Comparisons - compare with (highlighting differences) - compare to (highlighting similarities) Companies/organisations - singular entities (it NOT they) should be followed by “which/that” rather than “who” Ltd, not Limited Complement - to accompany something/add value Compliment - give praise (complimentary = free) Compound adjectives - should be hyphenated (sports-betting operators / first-quarter earnings) Comprise/comprising - should NOT be followed with “of”, as it means to “consist of” Conjunctions - should appear with a semi-colon before and a comma afterwards (; however, / ; therefore,) Continually - if something occurs repeatedly/regularly in the same way Continuously - if something occurs without interruption or gaps Contractions - don’t, can’t, won’t, etc. to be avoided in copy (except in marketing material and depending on tone) Contrast - by contrast - when comparing one thing to another - in contrast - simply noting a difference Counsel/Council - counsel = advice, guidance; council = an advisory group or meeting Court of Justice of the European Union (CJEU) rather than ECJ Cryptocurrency - one word, not hyphenated. Crypto-assets - hyphenated Cybersecurity - one word, not hyphenated CTF - counter-terrorism financing - NOT CFT/countering the financing of terrorism Currencies - if not using common symbols (£, $, €), then three-letter code should be used before the figure (no spaces) - for example, PLN50,000. Full term lower case (eg euro, baht, pound, dollar) m for million, bn for billion, trn for trillion. D Date format - Month, Day, Year (e.g., March 7, 2019) For Insights & Analysis summary text: can just say “today”, e.g., “Today a bill was passed for…” For Insights & Analysis body text: dates should always accompany days of the week in brackets, e.g., “On Wednesday (June 8) a bill was passed...” For NIBs: always use dates rather than days. Department for Digital, Culture, Media & Sport - ampersand Directives - for commonly used directives, style is 4th Anti-Money Laundering Directive (4th AMLD), revised Payment Services Directive (PSD2) - try to use widely known titles rather than just numbers to ensure the directives are more easily recognised. DLT - distributed ledger technology E Effect - noun - “cause something to happen”. Em dash (—) - should be used as a conjunction, not a hyphen or en dash (–). Ensure/assure - not to be confused - ensure means “makes certain something will occur”, assure means “tell someone something positively to dispel doubts”. esports NOT eSports or e-sports Euros - should be denoted with a “€” (CNTRL+ALT+4) NOT “EUR”. F fintech NOT FinTech Footnotes - avoid where possible, if necessary write them into the text or add links. G GGR - “gross gaming revenues” Government - does not need a capital g. Governor - should be written out in full, NOT Gov. Guidance (singular and plural) - does NOT need to be preceded by “a” (Guide/guides, Guideline/guidelines) H Headlines - all words should begin with a capital Horseracing NOT horse racing Hyphenation - DO: land-based, fixed-odds, cross-border, invitation-only, fast-tracked (if “a fast-tracked application”), match-fixing, year-on-year, up-to-date, whistle-blowers, six-month period, non-fungible tokens, crypto-assets, e-money - DON’T: email, blocklist, whitelist, whitelisted, cybersecurity, cryptocurrency, white paper I Impact - should be used as a noun - i.e. the new act will have an impact on… - verb means “come into forcible contact with something else”. - using “affect” as a verb is more accurate. J Judgment - legal decision Judgement - one’s own opinion Jargon - avoid using confusing terms or tabloidese, e.g. use players rather than punters. Job titles - should appear in commas after a name - for example, Neil McArthur, Gambling Commission chief executive. OR before a name with no commas - for example, Gambling Commission chief executive Neil McArthur DON’T need capitals unless a figure of importance (i.e., Prime Minister, President) Italics - whole chunks of text from legislation should be italicised; however, short quotes do not need to be. Justice Department - U.S. Department of Justice - to appear with caps (as requested by US team). K KYC - know your customer L Legislature - does not need a capital l. Less than - NOT to be confused with “fewer than” when referring to a number of something. i.e. fewer than 100 gambling tables. Licence - noun (UK), i.e. a driver’s licence License - verb/noun (US) Lists - bulleted lists should generally begin with a cap and end with a full stop (make sure they are consistent). M MONEYVAL NOT Moneyval More than - to be used instead of “over”. i.e., more than 20 players rather than over 20 players. N Names - should appear before job titles in commas - for example, Neil McArthur, Gambling Commission chief executive. Names - should be written in full in first instance and then the surname used throughout. Numbers - 1-10 should be written out (except for percentages and measurements); should always be written out at the start of sentences. Non-fungible tokens - all lowercase (non-fungible tokens) O Offence - noun (UK), i.e. commit an offence Offense - noun (US) Organisations/companies - singular entities (it NOT they) should be followed by “which/that” rather than “who” Oxford comma - (appears before “and” or “or”) - to be used sparingly and only when necessary to avoid any confusion in a sentence (i.e., where more than one “and/or” appears). Over - should not be used as a replacement for “more than”. P Parliament - does not need a capital p. Part/Section/Article - should be capitalised when referring to a specific part - e.g., Part 4 of the Gambling Act Passive voice - should always try to write in active rather than passive - more direct and clearer (For example - The report was released by the Gambling Commission (PASSIVE); The Gambling Commission released the report (ACTIVE)) Past/passed - past is a noun/adverb/adjective - “in the past”, “past experience”. - passed is the past tense of “to pass” - “the law was passed in government”. Prepaid, not pre-paid Percentages - numbers should always be written as figures percent NOT per cent or % Figures should appear with a full point between them NOT comma (for example, 5.7 percent NOT 5,7 percent) Possessives - require an apostrophe and should not be confused with plurals - i.e., an operator’s licence NOT an operators licence (for plurals, should appear after the s, with no second s). Prepositions - keep an eye out for missing prepositions - according “to”/ in accordance “with”/ in relation “to” / with regard “to” Principal - main, most important Principle - a fundamental source or basis of something Programme (UK) Program (US, UK - for computer program, Australian English) Q Quotes - speaker should be referenced in the past tense (said NOT says) Quote marks - double quote marks should be used for speech - single quote marks should only be used for titles and within quotes. (See Quote reference sheet for more information on how to use quotes.) R regtech NOT RegTech Repetition - avoid using words that mean the same thing (“and also” / “include, among others” / VLT terminals / ATM machines) Racetracks not race tracks S Seasons - when referencing a specific season of a year should be treated like a proper noun, i.e. should include a capital - Winter 2018. Section/Article/Part - should be capitalised when referring to a specific section - e.g., Section 4 of the Gambling Act. Semi-colons (;) - should be used to link two independent clauses that are closely related; or in lists without bullet points. (Do not overuse - often a full stop and new sentence will be better.) Sports betting NOT sportsbetting Sports team names Storey (pl. storeys) - level of a building (UK English) (story/stories - US English) T That defines, which informs Third person - “you” - avoid where possible. Titles - all important words should begin with a capital (i.e. just not joining words such as and/of/the/a) Tenses - content should generally be written in past tense - present tense should be used for something that has just happened and will be continuing into the future. U United States abbreviated to U.S. (Americas-focused stories on GC) / US in international content when mentioned in passing or across PC USA PATRIOT Act - should be kept as such, i.e. with caps, as it’s an acronym for “Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act”) U.S. Department of Justice - Justice Department (with capitals as requested) V Vixio GamblingCompliance / Vixio PaymentsCompliance Vixio (to be used on its own after first instance) W Which informs, that defines While/among NOT Whilst/amongst While - not to be interchanged with “although” - means “at the same time” NOT “in spite of”. X Y Year quarters - Q1, Q2, H1, H2, etc. Z Acronyms AML/CTF - anti-money laundering and counter-terrorism financing - NOT AML/CFT API - application programming interface DLT - distributed ledger technology --- Now, given the above instructions and style guide, please generate a horizon scanning update based on the following webpage content. Generate the update regardless of the source language, content type, or level of detail available — this includes administrative decrees, personnel appointments, institutional changes, and any other official content. Use whatever information is present. DBF SUP 26-003 DBF GUIDANCE FOR GEORGIA STATE-CHARTERED BANKS, BANK HOLDING COMPANIES, CREDIT UNIONS, AND TRUST COMPANIES TO: Supervision Staff CC: Banks and Credit Unions FROM: Melissa Sneed Senior Deputy Commissioner SUBJECT: FINANCIAL INSTITUTION CHARTER CONVERSION INVESTIGATIONS AND COMMON STATE LAWS AND DEPARTMENT RULES DATE: March 16, 2026 Financial institution charter conversions vary between national banks, federal credit unions, other state charters, and federal thrifts that wish to convert to a Georgia state charter. Procedures are somewhat similar to those for a de novo charter, with the difference being that the applicant institution will have a proven operating history. The Department’s Statement of Policy and Applications Manual contain guidance and direction and should be referenced. Before the application is filed, a meeting is held in the Department’s main office. Members of supervision and senior staff represent the Department, and meet with the applicant’s chief executive officer, senior officers, and board members. The Department will likely discourage a charter change if the applicant has serious safety and soundness concerns and is under an administrative action with the Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, Federal Reserve Bank, National Credit Union Administration, or another state banking regulator. After an application has been accepted, an investigation is conducted by examination staff. The investigation is coordinated with the federal regulatory agency, as appropriate. The investigation may be risk-focused to limit review of areas where there is no significant change proposed in the applicant’s conversion business plan. If applicable, a review of the applicant’s holding company and/or subsidiaries will be performed to determine financial condition and compliance with state Page 1 of 14 laws and Department rules prior to conversion. Reference should be made to Official Code of Georgia, Annotated (O.C.G.A.) §§ 7-1-550 through 7-1-555 for banks, and 7-1-668 for credit unions, which addresses the activities of entities throughout a conversion. If the institution conducts activities or holds assets which are not permissible for a Georgia state-chartered institution, a plan will be required to address compliance. Specific provisions of state laws and Department rules, as well as the powers of national banks or credit unions, will be considered along with an assessment of safety and soundness issues which accompany the compliance plan. Prior to the investigation, a request for information will be sent to the institution, which should align to appropriate risk-scoping activities. The scope of the investigation will include a review of the most recent regulatory report of examination obtained from the current federal regulator, external and internal audit reports, and a proposed business plan. The examination process should specifically identify areas of noncompliance with Georgia state laws and Department rules. At the end of the onsite portion of the investigation, the Examiner-In-Charge (EIC) will have an exit meeting with representatives of the institution, which includes executive management and an invitation to directors through executive management. The Report of Investigation (Report) should include a list of subsidiaries, if any, of the financial institution or parent holding company. Also, the Report should include compliance with any existing administrative actions, and management’s response for plans of corrective actions to deficiencies that were discussed during the examination process. Additionally, the EIC should make a recommendation to approve the conversion, subject to appropriate conditions, or disapprove the conversion. The EIC’s final Report should be transmitted to the assigned Supervisory Manager. After reviewing the Report, the Supervisory Manager will make a recommendation to the Department’s senior management for approval, subject to conditions, or disapproval. Senior management will conduct the final review of the Report, also noting approval, subject to conditions, or disapproval. At the Department’s discretion, either the open section of the Report or certain pages containing recommendations will be transmitted to the applicant, along with a cover letter and any administrative action. Board meetings to discuss the Report are not typical and will be at the Department’s discretion in consultation with the financial institution. Attached to this Memorandum is a listing of certain Georgia laws and Department Rules which federally chartered institutions are most likely unfamiliar. While this list is not exhaustive, these are more common operating financial institution rules and laws, and in some cases vary from federal and other state requirements. Page 2 of 14 COMMON GEORGIA LAWS AND DEPARTMENT RULES FOR BANKS The information below is intended to provide general direction to management of institutions considering conversion to a Georgia state-chartered bank. For more precise information, refer to the O.C.G.A. and the Rules of the Department. Georgia law provides for lending limits, limitations on investments on fixed assets, and certain other limits, to be based on the bank's Statutory Capital Base (SCB). The definition of SCB differs from the "Total Capital" definition in federal law. The definition of SCB is designed to be fixed, and not fluctuate day to day, so that limits do not change unless there is a change in the bank's capital structure, other than net income. The definition of SCB is contained in O.C.G.A. § 7-1-4(35) and is defined as the sum of common equity tier 1 capital plus the allowances for credit losses as reported in the bank’s most recent Call Report. Lending Limit O.C.G.A. § 7-1-285 establishes limits on loans to one person or corporation. In general, state banks are limited to aggregate loans to one person or corporation of 15% of SCB for unsecured debt and 25% of SCB for loans that are secured by "good collateral or other ample security." If aggregate debt exceeds l5% of SCB, then all loans and obligations must be fully secured, not just the portion that exceeds the 15% limit. Additionally, loans that exceed 15% of SCB must be approved in advance by the board or a committee authorized to act for it. There are certain types of loans exempt from the 15% and 25% limitations and are described in detail within the code section and Rule 80-1-5. The aggregate lending limits described above include both direct and indirect debt at the time of issuance of a binding commitment. In estimating loans to any individual person, all amounts loaned to firms and partnerships which that person controls or owns 25% or more should be included. All debts with a guarantee, to the extent of the guarantee amount, will also be included in the aggregate debt for legal lending limit purposes. The law provides that the Department will combine liabilities of a group of one or more persons or corporations or both when borrowers within the group are related through common control, when there is a common use of funds, or when a person has a financial obligation resulting from contracted debt. Refer to Rule 80-1-5- .11 for debt combination details. The Department is available to assist with any questions regarding amounts to be included for aggregate debt limits. For purposes of O.C.G.A. § 7-1-285, "good collateral or other ample security" may include real estate that is properly supported by an independent appraisal. Rule 80-1-5-.01 states that in determining whether or not a loan in excess of the 15% limitation is secured by good collateral or other ample security, the lack of a perfected lien, inadequate insurance, or insufficient margins between collateral value and the amount of the loan shall be prima facie evidence of inadequate security to the debt. As a reminder, overdrafts, which are typically unsecured, are considered loans for the purpose of legal lending limit. Page 3 of 14 Payday Loans O.C.G.A. prohibits payday loans in Georgia. Investments Securities Rule 80-1-4 discloses permissible investments and limitations on certain investment securities. Fixed Assets Limitation Rule 80-1-10-.01(2) limits the amount of investment in fixed assets by a bank to a maximum of 60% of SCB. To exceed this limit, prior approval is required by the Department. The approval process includes a letter form application. The application must provide for an orderly plan for restoring the fixed asset investment to comply with the 60% limitation within five years. Other Real Estate O.C.G.A. § 7-1-263 states, in part, that a bank or trust company may acquire and hold property for the purpose of avoiding loss subject to a determination by a majority vote of its directors at least once each year as to the advisability of retaining any such property, provided that no such property may be held for more than five years without the prior written approval of the Department. Rule 80-1-10-.09 states, in part, all assets acquired through foreclosure should be appraised within (6) six months prior or (3) months after acquisition and subsequent appraisals should be at intervals not to exceed 5 years. An independent appraiser should perform the appraisal, unless the book value of the property does not exceed $400,000 for residential property or $500,000 for commercial property, or 2% of the bank’s SCB, whichever amount is greater; then a qualified bank officer can perform the appraisal/evaluation in accordance with the Interagency Appraisals and Evaluation Guidelines. Oath of Directors O.C.G.A § 7-1-484 states, in part, that each director, before assuming office, shall take an oath or affirmation to diligently and honestly perform duties in the administration of the affairs of the bank, not permit a willful violation of law by the bank, and meets the eligibility requirements of this chapter and of the articles and bylaws. A copy of the oath shall be signed by each director and shall be placed into the minutes of the meetings of the directors. No director shall be authorized to participate in the affairs of the board or receive any compensation for service as a director until the oath has been executed by such director. A form for the completion of the oaths is available on the Department’s website. Term and Meetings of Directors O.C.G.A § 7-1-482(b) states, in part, that each director shall be elected by the shareholders for a term of one year or for staggered terms as provided in O.C.G.A. § 14-2-806 and shall serve until Page 4 of 14 he/she resigns, is removed, or becomes disqualified or until a successor has been duly elected and qualified. The institution's bylaws should be reviewed to determine the length of the term for the directors. That term shall meet the requirements of either O.C.G.A. § 7-1-482 or O.C.G.A. § 14-2-806. A copy of the Department's ‘Standard Bylaws for Banks’ is available on the Department’s website. The board should hold at least one meeting in each of ten different months unless an alternative schedule is approved in writing by the Department. In no case should the board meet less frequently than once each calendar quarter as defined in O.C.G.A. 7-1-483(a). Directors’ Committees The board may designate three or more directors to constitute a committee, which shall have and exercise the authority of the board as defined in O.C.G.A. § 7-1-483(b)(2). Directors Financial Statements Rule 80-1-6-.03 requires each director to maintain a financial statement on file with the chief executive officer of the bank. The financial statement shall be revised annually, but in no event shall the statement on file be more than eighteen months old. At the discretion of the board of each bank, such financial statements may be maintained in sealed envelopes available for inspection only by state and federal examiners. Director Financial Report forms are available on the Department’s website. Management O.C.G.A.§ 7-1-488 requires a president, a secretary, and other officers the directors deem desirable. An individual may hold more than one office, except that the individual must not be both president and secretary. Also, the Department must be notified immediately of a change in president, chief executive officer, or director as required by Rule 80-1-6-.01. Dividends Banks may declare and the bank may pay cash dividends out of retained earnings on its outstanding stock without Department notification or approval under the following conditions: 1. Total adversely classified assets at the most recent examination do not exceed 80% of Tier 1 Capital plus the allowances for credit losses as reflected at such examination. 2. The aggregate amount of dividends declared or anticipated to be declared in a calendar year does not exceed either (a) 50% of net income for C-Corporation for the previous calendar year or (b) 75% of net income for S-Corporation for the previous calendar year. 3. The ratio of Tier 1 Capital to Average Total Assets shall not be less than six (6) percent. Page 5 of 14 Refer to O.C.G.A. § 7-1-460 and Rule 80-1-12-.01 for further discussion related to dividend requirements. In the case of negative retained earnings, a return of capital follows a different process, and requires the approval of both state and federal regulators. Annual Audit O.C.G.A. § 7-1-487 states, in part, that the board shall at least once each year have made by an independent certified public accountant an audit of the books and affairs of the bank. A signed copy of the audit report shall be submitted to the board for approval or rejection and kept in the files of the bank. Rule 80-1-14-.01 requires audits to be provided to the Department when an auditor expresses anything other than an unqualified opinion. The auditor’s workpapers must be made available upon request of the Department. Internal Audit The internal audit should be commensurate with the size and complexity of the bank and provide for effective oversight elements as detailed in Rule 80-1-14-.02. The board should name an internal auditor or designate an audit liaison for third parties. The board or designated committee will approve the internal audit scope. Required actions of the internal auditor or designated liaison are detailed in the Rule. Cash Items Register, Overdrafts, and Charged Off Assets Rule 80-1-3-.01(1)(d) requires the bank's cash item register to show the maker of the item, last endorser, if any, date acquired by the bank, amount of the item, and reason held. The board is required to review the current register at least monthly. Rule 80-1-3-01(1)(g) requires the most current record of overdrafts to be approved by the board or Loan Committee at least monthly, and such approval shall be recorded in the minutes of the meeting at which the action was taken. Overdrafts less than $1,000, other than overdrafts on the accounts of officers and directors, may be aggregated and reported. Rule 80-1-3-.01 (1)(h) requires that charge-offs must be approved by the Loan Committee, in the case of loans, or board of directors and such approval shall be recorded in the minute book. Rule 80-1-3-.01(2) states that where a bank has SCB of $5,000,000 or more, the review by the board for cash items, overdrafts, and charged-off assets may be delegated to a specific officer or department of the bank, provided such delegation is recorded in the minutes of the board. A properly constituted Loan Committee, as described above in the section entitled “Directors Committees,” may perform this function for the full board regardless of the size of the bank. Public Funds O.C.G.A. § 45-8-12 states that deposits of a public body must be secured by a surety bond, or in lieu of a surety bond, by a pledge of securities or deposit insurance. The market value of securities pledged must equal 110% of the value of the deposit after the deduction of the amount Page 6 of 14 of FDIC deposit insurance. In addition, O.C.G.A. § 45-8-13 allows that a bank may deposit with the state treasurer to secure public funds on deposit in state depositories (the pooling method). Dormant Accounts Department Rule 80-1-8-.01 authorizes the amount and length of time that service charges are permitted for certain dormant deposit accounts. Generally, this Rule states that demand deposits are deemed to be dormant when the depositor has neither increased or decreased the amount of the deposit nor corresponded with the financial institution regarding the deposit for a period of not less than twelve months immediately preceding the determination, time deposits in similar circumstances of not less than five years, and official checks in similar circumstances of not less than two years. Where the signature card or other evidence of the financial institution's contractual obligation relative to a deposit account does not make provision for maintenance or service charge on a dormant account, such a charge may be assessed in an amount not to exceed $5.00 per month. Service charges or maintenance charges assessed pursuant to contractual authority governing the account shall not exceed the greater of $5.00 per month or the per month service charge which the financial institution otherwise assesses against active accounts. No service charge or maintenance charge may be assessed for the dormancy period beyond the first twelve months. Other Many of the forms and applications that state-chartered banks frequently require can be accessed via the Department's website at dbf.georgia.gov. Page 7 of 14 COMMON GEORGIA LAWS AND DEPARTMENT RULES FOR CREDIT UNIONS The information below is intended to provide general direction to management of institutions considering conversion to a Georgia state-chartered credit union. For more precise information, refer to the O.C.G.A. and the Rules of the Department. Georgia law provides for bylaws (including field of membership), lending limits, limitations on investments on fixed assets, and certain other limits. Bylaws and Field of Membership O.C.G.A. § 7-1-630 requires the adoption of bylaws. The ‘Credit Union Standard Form Bylaws’ is available on the Department’s website, although credit unions are not required to use this form. Existing members are grandfathered into membership; however, upon conversion, the field of membership must conform to that field of membership that was approved as a condition of the charter. Additions to the field of membership may be requested in conformity with the requirements of Rule 80-2-8. Generally, each credit union may have different types of fields of membership including select employee groups, associations, and geographic common bonds. Member Fees O.C.G.A § 7-1-651 details eligibility for membership. Additionally, this section sets the minimum par value for membership shares at no less than $1. Lending Limits O.C.G.A. § 7-1-658 establishes limits on loans to one person or corporation. In general, state credit unions are limited to aggregate loans to one person or corporation of 5% of net worth for unsecured debt and 25% of net worth for loans that are secured by "good collateral or other ample security." If aggregate debt exceeds 5% of net worth, then all loans and obligations must be fully secured, not just the portion that exceeds the 5% limit. Additionally, loans that exceed 5% of net worth must be approved in advance by the board or a committee authorized to act for it. There are certain types of loans exempt from the 5% and 25% limitations and are described in detail within the code section and Rule 80-2-12. The aggregate lending limits described above include both direct and indirect debt at the time of issuance of a binding commitment. In estimating loans to any individual person, all amounts loaned to firms and partnerships which that person controls or owns 25% or more should be included. All debts with a guarantee, to the extent of the guarantee amount, will also be included in the aggregate debt for legal lending limit purposes. The law provides that the Department will combine liabilities of a group of one or more persons or corporations or both when borrowers within the group are related through common control, when there is a common use of funds, or when a person has a financial obligation resulting from contracted debt. Refer to Rule 80-2-12- Page 8 of 14 .05 for debt combination details. The Department is available to assist with any questions regarding amounts to be included for aggregate debt limits. For purposes of O.C.G.A. § 7-1-658, "good collateral or other ample security" may include real estate that is properly supported by an independent appraisal. Rule 80-2-12-.01(6) states that in determining whether or not a loan in excess of the 5% limitation is secured by good collateral or other ample security, the lack of a perfected lien, inadequate insurance, or insufficient margins between collateral value and the amount of the loan shall be prima facie evidence of inadequate security to the debt. As a reminder, overdrafts, which are typically unsecured, are considered loans for the purpose of legal lending limit. Loans Loans to Insiders O.C.G.A. § 7-1-658(c) requires that loans made to officers, directors, and committee members of the credit union must be made under the same general terms and conditions as other members of the credit union. Each officer, director, committee member, or employee is precluded from participating in the approval any loan in which he or she has a direct or indirect financial interest. The approval of all loans to officers, directors, and committee members of the credit union must be reported to the board at its next meeting. Participation Loans and Whole Loans Rule 80-2-12-.03 allows credit unions to participate in loans or purchase whole loans. Underwriting and administration requirements are outlined in this Rule. Certain terms of the agreement are prescribed, such as, the agreement for a participation in a loan pool must call for the participant to share pro rata in losses. Moreover, where agreements exist for the seller to repurchase or indemnify loss, participation and whole loan purchases shall be treated as loans to the seller by the purchasing credit union and the amount of the purchase shall be considered remaining on the seller's books for the purposes of the seller's loan limitations. Real Estate Loans Rule 80-2-12-.02(4) requires that nonamortized commercial real estate loans shall not exceed 75% of the fair market value of the property pledged unless an exemption defined in the rule applies. Payday Loans O.C.G.A. prohibits payday loans in Georgia. Page 9 of 14 Investment Securities Rule 80-2-9 discloses permissible investments and limitations on certain investment securities. Fixed Assets Limitation Rule 80-2-4.-02 limits the amount of investment in fixed assets by a credit union to a maximum of 60% of the credit union’s net worth. To exceed this limit, prior approval is required by the Department. The approval process includes a letter form application. The application must provide for an orderly plan for restoring the fixed asset investment to comply with the 60% limitation within five years. Rule 80-2-4-.04(4) states that the purchase of real estate solely for expansion purposes may be made without the prior approval of the Department and only by letter notification when the real property is to be utilized solely as the premises of a credit union or its wholly owned subsidiary within five years of the date of purchase; the purchase of the real property does not result in the credit union exceeding the fixed asset limitation; the credit union is not subject to any special requirements whereby the Department requires prior approval for such purchases; and if a director, officer, or committee member is a party to the transaction, a certification is provided stating that all requirements of O.C.G.A. § 7-1-656 and the provisions of any applicable federal requirements have been satisfied. However, the establishment of branches remains subject to Department approval in accordance with O.C.G.A. § 7-1-665. Leasing Facilities Rule 80-2-4-.05 authorizes credit unions to lease space with prior approval by the Department. The credit union must occupy and use, on a full-time basis, at least 67% of each individual premise by the credit union and/or its wholly owned subsidiary. The credit union must have acquired the real estate in good faith to provide credit union services and in no event is a credit union permitted to acquire real estate for speculative purposes. Other Real Estate O.C.G.A. § 7-1-650 states, in part, that a credit union shall have the power to hold real estate acquired in satisfaction of debt previously contracted and real estate which has ceased to be used primarily as credit union premises, subject to a determination by a majority vote of its directors at least once each year as to the advisability of retaining any such property and provided that no such property is held for more than five years without the prior written approval of the Department. Rule 80-2-12-.04 states, in part, all assets acquired through foreclosure should be appraised within (6) six months prior or (3) months after acquisition and subsequent appraisals should be at intervals not to exceed 5 years. An independent appraiser should perform the appraisal, unless the book value of the property does not exceed $400,000 for residential property or $500,000 for commercial property, or 2% of the credit union’s net worth and allowances for credit losses, Page 10 of 14 whichever amount is greater; then a qualified officer can perform the appraisal/evaluation in accordance with the Interagency Appraisals and Evaluation Guidelines. Oath of Directors O.C.G.A § 7-1-655(f) requires all members of the board and all officers and committee members shall be sworn to perform duties in accordance with this chapter and the bylaws or as otherwise lawfully established. The oaths shall be subscribed in writing shall be retained in the board minutes. A form for the completion of the oaths is available on the Department’s website. Term and Meetings of Directors O.C.G.A § 7-1-655(b) states that at each annual meeting the board shall be elected for a one-year term. Additionally, a credit union may in its bylaws provide for staggered elections for board members but as nearly as possible, one-third of the board shall be elected at each annual meeting. Directors’ Committees O.C.G.A § 7-1-655 states, in part, that the board shall appoint an audit and credit committee. No member of the audit committee may be an employee of the credit union. The chairperson of the credit and audit committees shall be appointed by the board from among its number. O.C.G.A § 7-1-656(b)(2) states that unless the bylaws state otherwise, the board may designate three or more of its number to constitute a credit committee, audit committee, or other committees which, to the extent provided in a resolution, shall have and exercise the authority of the board with regard to the business of a credit union. Management O.C.G.A. § 7-1-655(c) requires that each credit union shall have a chairperson and a secretary. O.C.G.A § 7-1-655(k) requires that the Department be notified immediately if there is a change in president or chief executive officer. Director Fees Director fees are not prohibited in Georgia. Books and Records Financial Statement Availability to Members Rule 80-2-1-.01(2) requires each credit union to prepare a monthly financial statement meeting certain criteria and post a notice in certain locations and on the credit unions’ website to notify members that they can request to examine the financial statements and communicate who to contact to view the statement. Page 11 of 14 Recordkeeping Rule 80-2-1-.02 sets forth minimum requirements for books and records. Notably, a cash items register is required to be maintained that shows the maker of the item, last endorser, date acquired, amount, and reason held. The board is required to review the current register at least monthly. Charged-off assets must be approved by the board and such approvals recorded in the minute book. A permanent record of all charge-offs and recoveries thereon must be maintained. Overdrafts records shall contain the name of the account holder, the amount of the overdraft, and the date the overdraft originated. The most current record shall be approved by the Credit Committee or, in lieu thereof, by the board of the credit union at least monthly, and such approval shall be recorded in the minutes of the meeting at which the action was taken. Overdrafts of less than $1,000, other than overdrafts on the accounts of officers and directors, may be aggregated and reported in lump sum. Where a credit union has net worth of $5,000,000 or more, cash items, charged-off assets, and overdraft review by the board may be delegated to a specific officer or department of the credit union where such delegation is recorded in the minutes of the board. A properly constituted member of the board may perform this function for the full board regardless of the size of the credit union. Dividends For this section, O.C.G.A. 7-1-660 defines “dividends” as a designated distribution of earnings other than the payable contracted rate of interest due to members and depositors in all deposit and share account categories. Credit unions may declare pay dividends without Department notification or approval under the following conditions: 1. Total adversely classified assets at the most recent examination do not exceed 80% of net worth. 2. The net worth ratio after dividend distribution shall not be less than seven (7) percent. 3. Dividends total less than 50% of preceding calendar year net income. Refer to O.C.G.A. § 7-1-660 and Rule 80-2-3-.04 for further discussion related to dividend requirements. Annual Audit Rule 80-2-6-.01 requires the audit committee to have an annual audit of the credit union performed. The annual audit must be performed by a licensed independent accountant or firm of accountants; however, if the credit union has assets of less than $20 million, the audit committee may elect to have the annual audit conducted by the internal auditors of any sponsoring group, Page 12 of 14 concern, or association of credit unions approved in advance by the Department in writing. An audit of a credit union by an independent accountant or firm of such accountants or the internal auditors of any sponsoring group, concern, or association of credit unions shall be made in accordance with generally accepted auditing standards as set forth in pronouncements of the American Institute of Certified Public Accountants. All audit reports in which a licensed independent accountant expressing anything than an unqualified opinion shall be provided to the Department within 15 days following receipt by the credit union. All audit reports generated by anyone besides a licensed independent accountant shall be provided to the Department within 15 days following receipt by the credit union. The engagement letter should clearly define the extent of the audit work including, the scope of the audit, the objectives, the resource requirements, the audit timeframes, and the resulting reports, as well as the methods used by the auditor to handle and protect member information. No less than annually, the audit committee shall make or cause to be made an inspection of the assets and liabilities, loan and deposit accounts, information technology, and physical cash count of the credit union. Internal Audit The internal audit should be commensurate with the size and complexity of the credit union and provide for effective oversight elements as detailed in Rule 80-2-6-.05. The board should name an internal auditor or designate an audit liaison when utilizing third parties. The board or designated committee will approve the internal audit scope. Required actions of the internal auditor or designated liaison are detailed in the Rule. Ability to Hold Shares Nonmembers are not allowed access to share draft accounts. If consistent with O.C.G.A. 7-1- 650(2) and permitted by the bylaws, nonmembers may hold savings deposits. Dormant Accounts Department Rule 80-1-8-.01 is made applicable to credit unions by Rule 80-2-3-.06. Generally, this Rule states that demand deposits are deemed to be dormant when the member has neither increased or decreased the amount of the deposit nor corresponded with the financial institution regarding the deposit for a period of not less than twelve months immediately preceding the determination, time deposits in similar circumstances of not less than five years, and official checks in similar circumstances of not less than two years. Where the signature card or other evidence of the financial institution's contractual obligation relative to a deposit account does not make provision for maintenance or service charge on a dormant account, such a charge may be assessed in an amount not to exceed $5.00 per month. Service charges or maintenance charges assessed pursuant to contractual authority governing the account shall not exceed the greater of $5.00 per month or the per month service charge which the financial institution otherwise Page 13 of 14 assesses against active accounts. No service charge or maintenance charge may be assessed for the dormancy period beyond the first twelve months. Charitable Donations Rule 80-2-4-.06 authorizes credit unions to invest in charitable accounts if certain criteria are met as outlined in this Rule. Notably, the credit union must adopt an appropriate Conflicts of Interest and Ethics Policy that specifically addresses these donations, the recipient must be a 501(c)(3) or 501(c)(19) non-profit organization, and the terms and conditions controlling the charitable donation account must be documented in a written agreement meeting specific requirements. Other Many of the forms and applications that state-chartered credit unions frequently require can be accessed via the Department's website at dbf.georgia.gov. Page 14 of 14

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