Comité Banking and Financial Institutions del Senado, 19 de febrero de 2026

Transcripción

481 turnos. Seleccione un tiempo para reproducir ese momento del video.

1. 0:26:40

   Everybody, we got a quorum now. Welcome everybody to the Banking Committee. Um, just to let you all know, there's a young freshman senator out here named Senator Dixon. If anybody sees him, explain to him that the committee starts at, at 1:00. When y'all meet him, and he's new, this is his first time on Banking, and we're gonna welcome him here.

2. 0:26:59

   I saw him on the, in the other building. He's, he was going to different committees.

3. 0:27:02

   He's walking the... walking the other side. I gotta pick on him a little bit. You know why. You gotta, you gotta pick on him a little bit. Yeah, that's right. Yeah. And I'd like to also remind the committee, tonight is the, uh, Banking, uh, uh, extravaganza at, uh, Pure Taqueria. So, um, you go... Uh, everybody's welcome to come down and enjoy, uh, tacos and queso. I guess that's good. So we're going to change the order a little bit today, just to let you all know quickly. It's r- not, not gonna be a very much change. We're gonna start with, uh, House Bill, uh, 4, uh, 945, but we're gonna move, uh, Senate Bill 441 to number two, and then Senate Bill 424 will be the last w- thing we take up today, 'cause we've got some Zoom, and we got some other things to deal with.

4. 0:27:44

   So right now, if we could, I'd like to invite, uh, Representative Williamson to, to the podium, and, uh, anybody you'd like to bring, or, or to the desk. And let's do it from the front there.

5. 0:27:53

   Thank you, Mr. Chairman.

6. 0:27:54

   Absolutely. Let's see, two and one.

7. 0:27:57

   Yes, sir.

8. 0:27:57

   And, and I would like to say, it is always a pleasure to have you here.

9. 0:28:00

   Well, thank you, Mr. Chairman. I've got with me, uh, Amy Patterson, who's an attorney for the Georgia Department of Banking and Finance, who's, uh, helped work with, uh, numerous industries. In fact, all of the regulated financial institutions, uh, that we've, uh, the Department of Banking Finance, uh, regulates. She's worked with everybody in the off season, along with, uh, the commissioner, uh, Commissioner Beau Fears, to make sure that everybody was in agreement on this bill. It is a housekeeping bill. It, uh, for the Department of Banking and Finance. Historically, it's, it's rarely, if ever, amended.

10. 0:28:32

    Uh, this year it comes out of the gate with an amendment, because in, in our, um, efforts to protect seniors' financial, um, um-

11. 0:28:41

    Now, what are we working off, Representative?

12. 0:28:42

    I'm sorry. I need to get started on that. I apologize.

13. 0:28:45

    That's all right.

14. 0:28:45

    It's, um, House Bill, uh, 945LC6203105S.

15. 0:28:54

    105.

16. 0:28:54

    I'm sorry, 1, 1, 3-

17. 0:28:56

    It's your S.

18. 0:28:57

    620310S. I couldn't read my own-

19. 0:29:00

    That's S. If you don't mind, um, Ms. Amy, I understand you're new with the department. Can you introduce yourself and tell us your position?

20. 0:29:06

    I am. Thank you. Um, I am Amy Patterson. I am General Counsel for the department, uh, officially Deputy Commissioner for Legal Affairs. And as he mentioned, uh, Beau Fears has recently become the commissioner, and I've stepped into the role. I'm sure some of you are familiar with Beau Fears. He's testified in front of the committee numerous times, so I'm stepping into that role for him.

21. 0:29:25

    So technically, you sort of took over the com- what Beau, Commissioner Beau Fears now has?

22. 0:29:29

    Yes.

23. 0:29:29

    He is, ain't he?

24. 0:29:30

    Yes.

25. 0:29:30

    Well, we certainly wish, uh, Commissioner Fears was here. He's always a d- delight, and he's very, very... W- he- he's, he's one of these kind of people that we put a lot of faith and trust into, and I know you'll enjoy working with him.

26. 0:29:41

    I do. I do. Thank you.

27. 0:29:42

    Thank you. Go ahead.

28. 0:29:43

    Well, I share the, uh, uh, the commission, we have upgraded this year on legislative-

29. 0:29:47

    I would say so. I, I would think so.

30. 0:29:50

    A- as I was saying, uh, this, this bill is, rarely sees an amendment. Uh, this year it came out of the gate with an amendment because in our efforts to protect, uh, seniors' assets, and I'll walk, walk you through in the bill in a minute. But I just wanna s- explain why we're looking at a committee substitute coming out of the house. It was 'cause the Department of Health and Human Services requested that we have some clarifying language, because p- part of the metrics of the bill is w- when we have a disabled adult, uh, we needed to make sure that the, uh, code section was right, that the Department of, uh, Human Services could share with the financial institution, uh, information about the disabled adult and their, and their, um, and their banking r- uh, uh, where they were at of, is, uh, just, just trying to protect them in case there was any kinda apparent attempt at financial fraud.

31. 0:30:39

    But, uh, sorta beginning from the top, uh, as I mentioned, this does come with a, um, uh, support of all the regulated financial institutions. Uh, and this gives everything from a depository institutions to credit unions, our banks, our money transmitters, our, uh, mortgage bankers association, um, own, owned down through the, uh, actually our litigation financiers. Uh, our new tort reform bill last year, uh, added that responsibility to Georgia Department of Banking and Finance.

32. 0:31:10

    But, uh, sorta referring to my notes now, just like every year, we're making technical and informing updates, like w- For example, we're streamlining merger notification procedures for financial institutions. We're updating credit report requirements, uh, to reflect-

33. 0:31:26

    Can you read for me?

34. 0:31:27

    I'm sorry. These are sections, and I can take you through line by line or section by section. I'm just saying-

35. 0:31:32

    Just your changes, I think

36. 0:31:33

    ... hit, hitting the highlights. Uh, and, um, uh, we're clarifying exemptions for federally insured institutions. That's in sections 18 and 21. And we're updating mortgage installment loan and fair lending provisions, uh, f- consistency, and that's in sections, it's, because it's touching all these different entities, it hits various sections, but that's sections 13 through 16, 18, and 20. But it, what I'm backing into importantly, uh, this bill touches on three main, um, important changes.

37. 0:32:05

    Uh, first the bill's gonna give banks and credit unions the ability, if they opt in, to temporarily pau- pause suspicious transac- transactions when they reasonably believe an elderly or disabled adult is being financially exploited. Um, should this bill go through unamended, these holds are limited in time, require notice, documentation, employee training, uh, so that institutions can act to protect vulnerable Georgians. And I wanna explain to you for a second why that's so important.

38. 0:32:37

    It's important because under current Georgia law- Banks and credit unions are very limited in their actions, any kind of actions they can take to prevent customers from access to their money. Because when you go to the bank and you want your money, you want your money. You don't want anybody telling you you can't have your money. That's what we're dealing with. And, you know, there's, there's some people that don't like the fact that this thing would even protect senior citizens that where the bank reasonably believes there's financial fraud occurring because of that fact.

39. 0:33:14

    That's why this, this legislation allows a bank to opt in. They do not have to do it. But should they opt in, they would have to provide a, a training protocols. Um, uh, there would, there'll be clear established guidelines as when a, a hold could be made. And, and if they have s- sufficient suspicion that there is financial fraud being perpetrated upon s- one, one of their customers, the initial hold can be for up to fifteen days while they're trying to get the arms around whe- is this person being abused.

40. 0:33:49

    It does not stop any other transactions, uh, such as if they were, um, um, making a down payment on a car, any paying bills, or, um, uh, or buying a piece of real estate. Anything that's clear being handled through people, they know there's no, no, uh, fraud going on or no financial explo- exploitation going on, none of that is paused. This just pauses, uh, when a trained and bank employee, uh, has strong suspicions that somebody's about to have their money stolen from them.

41. 0:34:25

    Th- they can't do it right now, but this bill, unamended, would allow them to do that.

42. 0:34:29

    And making sure we're on the same sheet now.

43. 0:34:31

    Yes, sir.

44. 0:34:31

    Banks has the option to opt in or opt out of this deal. If they opt in, the training kicks in, and all members have to go through the whatever it is to get that certification.

45. 0:34:40

    That is correct.

46. 0:34:41

    Okay.

47. 0:34:42

    All right. Then the second important change we're making, um... Bear with me one second.

48. 0:34:52

    You know, you always wonder, Representative, why a cleanup bill requires forty pages. It is-

49. 0:34:57

    Because you're t- you're touching on just very minor cleanups all the way through. Just-

50. 0:35:02

    Exactly

51. 0:35:02

    ... the overarching effort is to make our banking code more streamlined, easy to understand, consistent in application, and, uh, and frankly, um, um, again, more efficient for both the regulators and also the industries in which we're regulating. The second thing we're doing, this will be the very first time, we're putting guardrails around virtual currency kiosks. I call them criminal ATMs, but they're out there all over the place. This is where you can walk up and put cash in a machine and get a cryptocurrency.

52. 0:35:37

    Uh, you can open up an account in which you, you then own cryptocurrency. The, um, it's the Wild West right now. They're legal, um, but they're not being regulated in a lot of states, Georgia's included. This would make them subject to regulation for the first time. Currently, they have, uh, transaction fees as high as thirty percent. Uh, this bill would limit that, still awfully high, but eighteen percent would be the limit.

53. 0:36:08

    But again, we're putting guardrails. Right now, there's-- nothing's being done. This would allow a maximum transaction fee of eighteen percent. It would require numerous disclaimers on the machine that your funds, this is, um, y- y- this is, uh, basically your money's gone once you put it in here. If it's, if you're subject to fraud, you risk losing this money. If, if you're, if you're a victim of fraud, you're subject to losing this money.

54. 0:36:38

    But in an effort to protect the unsuspecting, uh, person's, um, money from financial fraud, when you open the account, you only can open it with twenty-five hundred dollars, maximum of twenty-five hundred dollars. And if you are, in fact, uh, come back and say, "I've, I've just been defrauded," you've got five days to report the fraud, get with the cryptocurrency owner, and they would have to refund that twenty-five hundred dollars.

55. 0:37:09

    Now, doesn't matter if it's a dollar or, or a million dollars, that money's gone. Um, after the account is established-- Just hit my arm if I say something wrong now. Mm-hmm. You're all good. If, um, and, and then subsequent-- After, is it three transactions that makes them a, a refund? Three days. Three days. A- after, after three days, after the first initial twenty-five hundred dollar, uh, account opening, you're, you're, um, limited to ten thousand dollars a day, uh, deposits.

56. 0:37:44

    After five-- If you are subject to, let's say you put the twenty-five hundred dollars in, and it was fraud. They've convinced grandmother to put cash in the machine because the granddaughter's in, um, out of the country and stranded and has to have money. Uh, that nowadays they can use AI to fake the granddaughter's, uh, voice, and the grandmother completely believes it, sh- that the money's sent, uh, but she's able to prove it's like basically s- report the fraud.

57. 0:38:15

    It's, it's obvious it's fraud. The, the ATM kiosk owner would have to refund that twenty-five hundred dollars in full. After five days, if you're able to prove it, uh, th- then your, uh, uh, the kiosk operator would only be liable for returning the, their fee. They, uh, the eighteen percent, up to eighteen percent fee. So you put a thousand dollars in, all you'd get back is a hundred and eighty dollars. Again, is it perfect?

58. 0:38:47

    No, but right now there is no consumer protections. Um-

59. 0:38:54

    At current, we have no guardrails. I mean, we have no guardrails

60. 0:38:56

    ... That's correct. There's no consumer, no guardrails at all. Um, and then finally, I've already alluded to it, House Bill 945 moder- modernizes the litigation finance oversight. In our tort reform bill last year, we, uh, we, we basically authorized, uh, litigation financiers in Georgia. Uh, we required registration, but it was not an annual registration. Realized that, you know, somebody could register the company as a financial litigator, the ownership could change, and, and, and the Department of Banking and Finance would not be aware that, uh, s- that the ownership had changed.

61. 0:39:37

    This requires annual registration, and when ownership changes, the department can do, um, uh, uh, criminal background checks. And that's correct, right?

62. 0:39:48

    Mm-hmm.

63. 0:39:49

    Um, a- and so we wanna stay on top of who the actors are in this space, just like we do with, uh, all the other regulated industries. So the key features of that aspect to the bill says it requires annual registration and renewal, criminal background checks, uh, uh, and importantly, the authority for the Department of Banking and Finance to, to issue cease and desist orders against unregistered actors. So if you have folks coming in and aren't following the Georgia law, they're acting as litigation financiers, uh, uh, the department can be preemptive and go in and issue a cease and desist order to stop that behavior.

64. 0:40:31

    And then, then they can, you know, go through the process of getting registered and, and with the department, uh-

65. 0:40:36

    And that department would fall under the, the... You Ms. Amy Yost? Okay.

66. 0:40:40

    Yes, sir.

67. 0:40:42

    So, uh, in short, it protects customers, especially seniors, modernizes our laws for today's financial realities, and gives regulators the tools they need without stifling legitimate business. Again, uh, Mr. Chairman, I'm happy to go through any aspect of the bill, uh, and if it gets technically over my head, uh, Ms. Patterson here is able to step in.

68. 0:41:04

    Questions from the committee?

69. 0:41:08

    Senator Strickland, you're recognized.

70. 0:41:09

    Thank you, Mr. Chairman. Um, thank you, Mr., uh, I was gonna say Mr. Leader. Mr. Chairman, for your work on this. I think every year I've been here you've brought this, the same cleanup bill, I think every year I've done this.

71. 0:41:19

    It's getting-

72. 0:41:19

    And so-

73. 0:41:20

    It's getting easier and easier until this year.

74. 0:41:21

    Until this year. It's looking pretty smooth so far.

75. 0:41:24

    Yeah.

76. 0:41:24

    Um, Ms. Patterson and I talked this morning about this, and I'll ask this, um, for everybody's understanding as well. We talked about line 188. The concern that I had in looking at this is I understand why the immunity's important, because you want to incentivize institutions to follow this, which is really important. We talked about situations I've seen in my practice, do a lot of probate law, where we've captured fraud and, and caught fraud, um, but every time it's been because a bank noticed it, and that's how families find out.

77. 0:41:54

    Otherwise, this stuff can go on for a long time, and so it's so important that we have something in place. My concern with line 188 is the immunity we have, though, um, would not just, um, doesn't just provide immunity where there's, uh, malicious purpose. It is actual knowledge and malicious purpose. So you'd have someone in an institution, they could have knowledge of fraud, but if you couldn't say they had malicious purpose, you would, they'd still have that same immunity.

78. 0:42:24

    And the concern I raise to you is from the department's standpoint, because this includes administrative immunity, would the department be able to go after someone that followed this protocol but just turned a blind eye? They, an employee had knowledge, but they said, "Oh, I didn't have any malicious intent." Would that make it where the department couldn't use your rule making authority to go after someone like that?

79. 0:42:47

    Not in my view. Uh, we will have regulatory authority over this, as well as every other policy and procedure that's in place at banks through our exam process, and we would be able to catch that type of information and look at it and say, "This, they're not following the policies that you've put in place. You've put these policies in place to id- that require them to place a hold, or however the financial institution has their policy structured, if they have reasonable suspicion." So there should be no reason that it comes to the point of an employee having actual knowledge and not placing that hold, unless, to the point is, there is malicious purpose, unless for whatever reason the teller or whoever it is has malicious purpose behind this, in which case that liability would not apply in those situations.

80. 0:43:27

    So why would it not make more sense for the and to be an or on line 188?

81. 0:43:31

    So-

82. 0:43:31

    The first and.

83. 0:43:33

    Sure. The concern would be that it comes down to what actual knowledge is. The bill requires them to have reasonable suspicion on f- to place this hold. That doesn't mean that they have actual knowledge. It means that they have a reasonable suspicion. But if, let's say, somebody comes in and they do not place a hold on the transaction and then find out later that it was, there was a fraudulent aspect to it, it becomes, well, did the bank have actual knowledge of this? And they have to prove, based on conversations that are going to be, you know, what did the teller ask, what did the person say.

84. 0:44:03

    It's going to all be witness testimony. It's going to just create more litigation. And the concern that we have is, as, uh, Leader Willi- or Chairman Williamson referenced, this is an opt-in thing for our financial institutions, and we want our financial institutions to be able to take advantage of this and do this. And if we remove this liability provision, I think the reality is that a lot of financial institutions will not take advantage of this and not place holds. And you referenced that we know some financial institutions already take actions and do this. They don't have these liability protections.

85. 0:44:32

    Mm.

86. 0:44:32

    They wouldn't even be able to do that now if they don't opt in, if we remove this liability protection. So it would remove even those that are doing it. They would not be able to do it either.

87. 0:44:42

    Why is that? Explain that last part again.

88. 0:44:44

    So if they choose to not opt in, which I believe a number of institutions would do if this liability was changed, then if they haven't opt in, opted in, they can't place a hold Whereas right now they aren't opting into a program, we don't have a, a framework, we don't have guidelines, and we're trying to put that in place to create this training and to create a f- structure under which financial institutions can do this in a way that makes sense for everyone and really protects our seniors and our disabled adults. And if we take that away, if we take that liability provision away, their option to do transaction holds is this, and if they don't opt in, then they can't do it at all.

89. 0:45:19

    So they can't do a transaction hold now if they decide to have their own policy?

90. 0:45:23

    They do. They can, and they do. But if we put this in place, this sets up the framework for it.

91. 0:45:28

    Mm-hmm.

92. 0:45:28

    And if they choose because of this liability provision to not opt in and not create that training and framework, then they would not be able to do it.

93. 0:45:36

    They'd have no immunity at all then, right, they didn't opt in? That's my question. So if, and currently, before this bill passes, um, currently right now, could a, like, could a financial institution have their own policy when it comes to holds if they current-

94. 0:45:52

    They c-

95. 0:45:52

    Okay. And do a lot of institutions already have policies as far, as far as you know?

96. 0:45:55

    I don't believe so. I know that some institutions may have done so, but I'm not aware that one-

97. 0:45:59

    There's nothing uniform out there-

98. 0:46:00

    Right

99. 0:46:00

    ... that I know? Okay. Thank you.

100. 0:46:03

     Let me, for, ask a question, one second. Let me, let me talk non-lawyer for just a second, okay? If you change this to an or, if I understand what you just said, the bank's position would be they would opt out because it would put liability on the bank.

101. 0:46:18

     Correct.

102. 0:46:19

     Am I, is that what I understood you to say? If, so they could be then sued or whatever it was for not having done it right, correctly, so whatever, whatever. Leaving it as is, you're telling me, gives the bank some, some leeway, as I guess that w- word or, or some coverage or whatever?

103. 0:46:36

     Yes, it gives them protection from liability, so it gives them a groundwork for if there is an issue and they get sued, well, they can rely on this li- liability protection to defend that suit.

104. 0:46:46

     Representative Williams, did y'all discuss this when y'all were doing that? Did this same thing come up there?

105. 0:46:50

     No, sir, it did not. But, um, it did not, but l- l- I like the, let's stick with the non-lawyer language, 'cause I'm right there with you, Mr. Chairman.

106. 0:46:58

     Yeah.

107. 0:46:58

     So line 187, 188, the way I interpret this, and I'll ask Ms. Patterson to confirm whether or not my, uh, logic is wrong.

108. 0:47:05

     You're on what now?

109. 0:47:06

     I'm line 187 and 188.

110. 0:47:08

     All right.

111. 0:47:09

     The, um, the lines that, uh, uh, Senator Strickland's pointing to. Basically, as I see this, the bank's gonna have immunity unless you got a bad employee. And a bad employee, um, th- th- you know, the bank's gonna be responsible for the actions of a bad employee. Uh, and, and a bad employee would be somebody that might be doing the insider, the actual, actual knowledge. These, this is the, um, this is the teller that knows this customers might be a little bit addled, might be a little, a good, ripe, um, um, uh, vic- uh, possible victim of fraud.

112. 0:47:49

     And, you know, let, get somebody to tee 'em up for stealing the money. Well, that's a bad employee. They got actual knowledge and, and, and this malicious purpose. They want that money. But getting back to the, um, uh, uh, Ms. Patterson's point, absent this malicious purpose, which is stealing the money, I, I can't think of an e- uh, of an example, and Senator Strickland, I'll defer to if you can give me an example. How could any financial employee have actual knowledge, actual knowledge of fraud if all we're dealing with is suspicions of fraud?

113. 0:48:28

     And, uh, uh, I, I s- open my remarks by saying when we go to the bank, I guarantee when my wife goes to the bank, she wants her money. Uh, and, and it doesn't matter what the, um, and teller thinks she might be using that money for, she's gonna want her $200 to go do whatever she wants to. Or in, in some cases, I heard this week that a lady got defrauded of $25,000 through, through one of these crypto machines, and, uh, one of our, uh, house members can give you the, the particulars on that.

114. 0:49:00

     And that happened this week. Um, but I can't think of an example where a teller would have actual knowledge of fraud w- when the, uh, when the request for money's coming to he, he or she at the, for the first time. I, I can't come up with an, even a stretch of an example.

115. 0:49:18

     Well, and to build off that, uh, Chairman Williamson, I think the rest of that is I can't think of a reason where if they do have actual knowledge, or even if they have reasonable suspicion, why they wouldn't place this hold unless they're acting with malicious purpose. This is supposed to be a tool for our banks to be able to utilize to protect their customers, to protect their members, and to really rely on that relationship banking and provide an additional tool. We know that financial fraud is a problem. We know that elder abuse is a problem on the financial exploitation side. If a financial institution has actual knowledge, or even if they have reasonable suspicion and they've opted into this program, there's no reason for them not to do that under how this is drafted.

116. 0:49:57

     Quick-

117. 0:49:57

     I've got a comment.

118. 0:49:59

     Well, wait a minute. I, you want to make one?

119. 0:50:00

     Let him go.

120. 0:50:01

     Okay. Senator Strickland, go ahead. And, and that's why we talked this morning. I wanna make sure the department in particular, I'm not thinking about the lawsuit side, which you should be, and the bill obviously includes civil and criminal liability. I'm looking at the administrative side though, too. I wanna make sure the department is comfortable in making sure that, um, you look at all extremes when you pass bills, that we don't have a situation where someone has actual knowledge, they turn a blind eye, almost like a negligence type situation where you couldn't step into the department and do your job to oversee that. And, you know, I don't wanna mess the bill up, and I don't wanna cause issues, make this bill about something it's not.

121. 0:50:35

     But I want the department to make sure that they're comfortable and that it, and if we're gonna leave this language like it is, that you have the oversight you need so we don't have to come back down the road and fix this, and that's something I just wanna flag for the record.

122. 0:50:47

     Yes, and we are comfortable with it. Thank you.

123. 0:50:51

     And for the record, Representative Williams, your wife might want your money also. Don't, don't, don't go down that road. I just wanna put that out there. So, and, uh-

124. 0:51:03

     Yes, sir. Ch- Chairman, Chairman Williams, thank you. Uh, I, first I wanna thank you for the virtual currency kiosk issue. I think that's someone that needs to be addressed, because that's becoming broader and broader in its, in its use and in acceptance, and without any guard- guardrails at all. That just makes good sense. I was gonna ask about the third party financing which came a part of the t- uh, the issue with tort reform last year. Uh, is there any connection with the insurance commissioner and the banking of these institutes that have registered from that standpoint for financing insurance claims?

125. 0:51:34

     Is there any connection between that and the banking industry and the insurance commissioner? Does he have any ab- y'all have any ability to swap information? Because if you listen to some of the stuff that's going on, the financing of third party claims is a big... It's- it's- it's a big business as far as that portion. And having transparency is what that was to do, and the ability to share that information with the insurance commissioner, who would ultimately, I believe, be there. Is there any provision in here to share that information with the insurance commissioner, or do y'all work anywhere together on that?

126. 0:52:08

     There's not, and that has not come to our attention at this point. Um, as drafted, the bill just requires them to register with us. It does require disclosure, and then I know there are provisions about what must be disclosed through a lawsuit, which is not directly under the department's purview, but it is a part of that same bill. But there is not, uh, the department is not in conversation with him.

127. 0:52:26

     Okay. Okay, just wondered. Thank you so much.

128. 0:52:27

     It's not- not shutting down that industry, it's just making sure we know who is in that industry.

129. 0:52:31

     Who is in that industry, right.

130. 0:52:32

     And importantly, you know, is, eliminates any foreign influence-

131. 0:52:36

     Yeah

132. 0:52:36

     ... uh, in civil cases. It restricts foreign ownership of m- of litigation financiers. It was in the tort reform-

133. 0:52:43

     Right

134. 0:52:44

     ... uh, efforts to begin with. So it's just making sure that we got good actors that are financing lawsuits.

135. 0:52:49

     Chairman Hodges, you reckon have a question?

136. 0:52:52

     Um, thank you, Chairman Williams, for bringing this bill, and you know, I agree with all of it. The only thing I would add would be as a, as a, a guy who used to run a bank, um, the line 187 and 188, as it sits now, I would opt in. And we always, the banks that I've been associated with always tried to do the same, tried to do the right thing, tried to help protect our depositors, particularly the elder- elderly and the folks that could be compromised.

137. 0:53:23

     If you change it, I would be a lot more apt not to opt in. And I think that that, just having some experience in it, I think that I'll just agree with what, um, Ms. Patterson said, it, that definitely would be harder for banks to- to- to- to do the right thing.

138. 0:53:41

     And, you know, I concur. And, you know, I think most of the members of the committee were aware that, uh, you know, I've, I've led the organizing effort and, and chaired two successful community banks. And we are... We, I've, I've always described myself as a, I wasn't a trained banker, but, um, we, we own banks, and we're, we're risk averse. And-

139. 0:54:04

     Yeah

140. 0:54:04

     ... and if it, if this created an environment for a small community bank with local shareholders like I had both times, and I thought, well, I was putting our, our, um, our bank i- in- in- potentially b- harms way, open up, open up some, a, a line of, uh, liability that, of which we were, m- scared of, I wouldn't opt into this program.

141. 0:54:31

     Fair enough. Any other members have any questions? I don't think we have anybody on the sign-up sheet, uh, to speak for or against this bill. So, uh, normally they fill, so not on the sign up, not on this bill. So any, any other members got anything, any questions? I'll entertain a motion. Senator. Yes, sir. Motion to pass. I have a motion to pass, Senator Harman. Second from Senator Hodges. We have a motion to ask. Okay, any discussion? Any discussions, amendments, et cetera, et cetera?

142. 0:55:03

     If there's no discussion, all in favor of passing this as it's written, please raise your hand. Your bill is unanimous.

143. 0:55:12

     Right.

144. 0:55:12

     Chairman Williams, thank you.

145. 0:55:13

     Thank you, Mr. Chairman. I f- I'm, I'm remiss in not recognizing Senator Strickland, who's doing a fan- fantastic job. He's one of our two, uh, senators in, in Walton County, and I love them both.

146. 0:55:25

     Absolutely. That was an endorsement.

147. 0:55:31

     I thought that was an endorsement. Ms. Patterson, it was nice to meet you, and I look forward to working with you. Thank you.

148. 0:55:36

     Thank you.

149. 0:55:38

     Okay. Let's move along, guys. We gotta keep moving quickly. I gotta be over to Roseland at 2:00 also. Senator, I know, uh, well, excuse me, the chairman's here with me.

150. 0:55:49

     Uh, let's do, uh, Senator Harbin, do you wanna pres- 441 is what we're on now. Do you wanna present here or you wanna go up front? I've got a guest with me. All right, go up front there. Here with me. And when you, when you, when you leave the committee chair you get where you get attacked, you understand that, right? We work on you a little bit. I- And by the way, I wanted to tell you all, this is Senator Harbin. He's on the banking committee. This is his first time back on the banking committee with me. We welcome you back. Thank you, sir. Thank you. Now, this gentleman you have to your right- Yes ... now, sir, I don't know who this fella is. This gentleman is the Georgia State Treasurer, uh, Steve McCoy, and so I needed some assistance in finance, and I figured he would be a good person to bring along, uh, to help carry a bill, uh, for his agency in working there.

151. 0:56:32

     Is that fair? For the general public, let me explain something to you. When you call Mr. McCoy and you ask him a small question, a simple question- A big one ... I mean, a simple question, he comes back with a complete dossier. There is nothing simple. Mr. McCoy, we always appreciate your work. Thank you.

152. 0:56:51

     Thank you, sir.

153. 0:56:52

     Always. All right, Senator Harbin, the floor is yours. All right. This is, uh, LC- What are we working off of? Uh, 620295, local government investment pool. Uh, kind of a new t- terminology, but what this is is that the state treasurer and the, and his organization manage money for counties, cities, institutions. They have an entire team that manages- Billions of dollars?

154. 0:57:19

     72 billion

155. 0:57:20

     $72 billion across our state for institutions that are there, and they have a team of professionals that look at that. And what this is, is to do-

156. 0:57:30

     Does everybody have this? Y'all got-

157. 0:57:31

     No, but

158. 0:57:33

     Okay. All right. Everybody... Excuse me. I'm sorry to interrupt.

159. 0:57:35

     Okay. Uh, and the purpose is to give state oversight over the creation of new local government investment tools. There's one that's in existence now, but there can be others that are there. And what it does, it protects the finance of the state for the institutes. It provides a level of state oversight in the creation of new G- G- uh, LGIPs. It prevents fraud, it creates a backup to id- to, uh, identify malign actors before they have a chance to, to act. Localities don't have the resources that the state has, so a local county or city just doesn't have the resources that are available to the state to be able to look at the risk, look at what's being presented.

160. 0:58:16

     It keeps our communities from getting defrauded, and this legislation will give the state the ability to n- to, to an- analyze the nature of LGIPs for high-risk investments and to ensure stable growth. The finances of the state and our local communities are interconnected in many ways. For instance, in 2007, the Securities and Exchange Commission seized control of the state of Florida's finances because of a false rumor that one of their GILPs contained subprime bonds. This legislation would help prevent that by giving the state oversight in the creation of these funds.

161. 0:58:51

     It also prevents fraudsters from taking advantage of these municipalities by giving their proposals in addition to reviewing the funds that can be created. The state has the professional resources that small localities do not have, and this safeguard safeguards the interest of the taxpayers by helping to ensure that our taxes are not being invested without professional oversight. And so what this is doing is it says that if there is a GLIP that's there, it would be under the supervision of our treasurer and his department.

162. 0:59:24

     Did I miss anything, sir?

163. 0:59:27

     No, no, sir.

164. 0:59:29

     Tre- Treasurer McGehee, you're the only one signed on this bill, and we certainly appreciate it. Please-

165. 0:59:33

     Thank you. All right

166. 0:59:34

     ... a couple of minutes.

167. 0:59:35

     Uh, thank you, Senator Harbison. Yes, um, and the Local Government Investment Pool, and it's a little bit of a misnomer in that it's really a, an investment pool for the state and local government-

168. 0:59:46

     Pull the mic a little closer

169. 0:59:47

     ... the state and local governments. Is it... And it was, um, is comprised of, of, of actually one trust with multiple investment pools that manages both, both the state's general fund, uh, state agency funds, college and university funds, and local government funds that are voluntarily, uh, sent to the state for investment purposes. Um, that these entities, um, uh, do, uh, keep their funds, their primary liquidity in banks. We do not, you know, solicit, uh, um, for those funds, but the excess funds that they want to have invested, they still want daily liquidity and safeguards and a com- and a market rate of return.

170. 1:00:25

     So it was created about 45 years ago by the legislature, and the legislature wanted to both safeguard public funds and provide liquidity, but in a way that, uh, the local governments could benefit from the expertise in the, with the state. And so what we did was, what the legislature did was they established a trust, and it allows co-investing state funds with local funds to safeguard them and provide liquidity and market rates of return. It's now grown over the years.

171. 1:00:55

     As I mentioned to now, this, we manage about $80 billion in our office, but 72 billion are in the Local Government Investment Pool trust. It's, um, it has over 550 local government participants in it, over 1,400 accounts. It's growing every month. That the, uh, all the offerings are AAA rated, uh, that, and have been since 1995, when Georgia was one of the first two states in the country to request a rating just as a safeguard, and now other states have followed suit since then.

172. 1:01:25

     Um, that the trust, it was very visionary by the legislature. It allows multiple pools. Over time, the needs will change by local governments and the state, and it can create additional pools to meet add- additional, uh, needs and investment opportunities. So currently we have, uh, four pools. Over time, it may add five or six, or we could close down some. And again, uh, the board, the State Depository Board, uh, is, governs this. It was, again, it was set up where the State Depository Board is overseeing all the state banking.

173. 1:02:00

     They have to approve all the state's banking, and also the investment of all local, of all, um, short-term funds. It's chaired by the governor. It includes the banking commissioner, the OPB director, the revenue commissioner, the state accounting officer, the GDOT commissioner, and myself as treasurer, and I administer the pool. Um, we do have resources, significant resources to do, to do that. We're, um, uh, we're, uh, also, we have an audit, uh, and done by the state auditor every year that, uh, is a very, very, very intense audit, um, that, uh, and, uh, that, uh, we've had no audit findings or management comments since the first audit was done.

174. 1:02:41

     Um, that, um, it's fully transparent. We publish all the, uh, all the holdings on the internet, and we publish an annual financial report. That this b- bill, what it does is it amends the original, um, code section that authorized the LGIP trust to do one thing, to continue safeguarding public funds as they have been for 45 years. Is it, um, is that the concern is, and we've seen this the last few years, there'll be bills often come up from the House trying to establish other Local Government Investment Pools that have no oversight.

175. 1:03:16

     They're not chartered. They have no governance, no, uh, no oversight by the state or any other regulatory body. And so what this does is it, um, would say that, or it does say that if the legislature in the future were to authorize local governments to form their own investment pools and make them as securities that can be sold to any lo- any public fund investor in the state without, uh, without any other thing other than you create an investment pool, is that, uh, any investment pool that was created and operated by local governments that would be offered to other local governments would have to be approved by the State Depository Board.

176. 1:03:54

     And that means that they, the State Depository Board would make sure that they had the same stringent criteria to, for oversight and safeguarding public funds as the state practices on, on its own pools. The, this bill provides protection to both the state and local governments because if something does happen, and we've seen it happen over the years, and I've been around for a while, I've seen three large ones happen in other states. They were using it because they had local gov- they had either local governments or third parties involved, but there was some, a problem with even triggering a run on a fund, just like a run on a bank.

177. 1:04:30

     These are not insured, so you've got to manage those in a way, like any other, like a money market fund by Fidelity or by, um, by BlackRock. We adhere to the same standards. Local governments do not have those resources. That, uh, so the, the bill protects existing pools from the elevated risk posed by unregulated pools, and, uh, that, uh, it, in essence, it places guardrails around any investment pools-

178. 1:04:58

     Yes

179. 1:04:58

     ... that are created to be marketed to other local governments, commissions, authorities, schools. And this is a s- this is a common sense bill. It just retains the protection we've had for 45 years throughout Georgia. We've not seen a single incident of lack of liquidity, uh, when needed, or a failure of securities, uh, and loss of public funds. Now is not the time to, uh, to open the door to allow that, and that's our concern.

180. 1:05:24

     Thank you, Treasurer. And I want to reiterate a conversation you and I had. I had some people question me about digital currency. Our constitution does not allow digital currency, and that's not part of this, it has nothing to do with this, and we're not there.

181. 1:05:36

     No, sir. In fact, this safeguards against that. Uh-

182. 1:05:38

     Right

183. 1:05:38

     ... some of the bills that have come before the House actually are worded in a way where they could allow-

184. 1:05:43

     Right

185. 1:05:43

     ... uh, any unregulated security or digital sec- uh, uh, currency to be included. It's not prohibited there. That's-

186. 1:05:49

     Questions for the committee?

187. 1:05:50

     ... the safeguards we want.

188. 1:05:51

     Questions for the committee?

189. 1:05:53

     Five.

190. 1:05:54

     Mike.

191. 1:05:55

     Chairman Hodges. Um, thank you, Treasurer, and thank you, Mr. Chairman, for bringing this bill. Let me make sure I understand, okay? In my district, let's say we have Glenn County and Camden County. Uh, between them they've got $150 million in surplus investable funds that they need to do something with. Right now they could go to, um, Georgia Fund I. They could go to Georgia Fund I Prime.

192. 1:06:25

     And let's just say they've had people calling on them from various invest- investment operations and saying, "We can give you more yield for your $150 million than you're able to get in Georgia Fund I or Georgia Fund I Prime if you'll just bring it to us." And, you know, what they might not say is that, you know, that in, that higher yield comes with higher risk. And, um, and so what your bill does is that it allows Glenn County and Camden County, if they wanna do that, they can do that, but the fund that they invest in-

193. 1:07:04

     There's one

194. 1:07:05

     ... has to be under the auspices of the, um, the, uh, State Depository Board. It, it has to meet the same governance requirements that you've established for our local, uh, government investment pools, the same, uh, guardrails, the, the audit requirements, all that stuff. So it would be managed as, as, as professionally-

195. 1:07:31

     Mm-hmm

196. 1:07:31

     ... as, um, what we have now. Is that correct?

197. 1:07:35

     Yes, sir. Now, one thing is a county or, or a city can manage their own funds. There are, they, uh... And they can actually enter into an intergovernmental agreement with each other just to manage their own funds. Then they're governing those, and they put controls in place, and it's their money. This protects from them from having someone to go out and solicit funds from other communities and other, and even colleges, universities, but mainly, you know, school systems and c- and as a security and say, "This is now legal. Now the legislature made it legal. Invest with us." And that's what it protects against, is, uh, uh, more or less rogue pools that would mask themselves as a very safe pool, but there's no oversight, no regula- no regulatory body over.

198. 1:08:17

     Let me rephrase then. So, um, um, ABC Investments comes to Glenn County and comes to the, the leaders of Camden County and says, "Let us have your $150 million-

199. 1:08:28

     Yeah

200. 1:08:28

     ... and we're gonna get you more-

201. 1:08:30

     Yes

202. 1:08:30

     ... a, a better yield." And they, you know, they may or may not talk about more risk. They may or may not talk about liquidity constraints. But to do, to, for them to be able to do that, they're gonna have to be under your auspices.

203. 1:08:45

     They, they would ne- they would need to either, um, first, we, we have had, uh, in fact, uh, groups of, uh, cities, counties say, "We'd like to create... Would y'all create another pool to meet longer term needs of ours?"

204. 1:08:56

     Right.

205. 1:08:57

     Can, the, the board can approve that, but if they wanted to have their own and not have the board actually approve of an offering for them, then there would be standards that the board sets and says, "You'll have to adhere to the same standards as if the state-

206. 1:09:08

     Okay

207. 1:09:08

     ... were managing."

208. 1:09:09

     Okay.

209. 1:09:09

     There's no, no higher standard. The same standards to safeguard the funds.

210. 1:09:13

     So I understood correct. Basically we're-

211. 1:09:15

     Yes, sir

212. 1:09:16

     ... making sure we're taking care of the, the people.

213. 1:09:19

     Yes, sir.

214. 1:09:19

     Thank you, Treasurer, for what you do. Any more questions from the board on this bill?

215. 1:09:24

     Chairman, thank you for bringing this bill. I think it's a good bill. Uh, I'll entertain a motion.

216. 1:09:29

     Motion to pass.

217. 1:09:30

     Motion to pass, Senator Strickland.

218. 1:09:32

     Thank you.

219. 1:09:32

     Second. Senator Jones over here, so anybody, all in, anybody, any talk, any amendments, any adjustments, anything? All those in favor of the bill, please raise your hand.

220. 1:09:43

     Passed unanimously. Thank you.

221. 1:09:45

     Thank you.

222. 1:09:45

     Thank you. Thank you, Treasurer.

223. 1:09:46

     Appreciate it.

224. 1:09:46

     Thank you.

225. 1:09:47

     Thank you. You're on the mic.

226. 1:09:51

     Now we're gonna have to move right on into right quick like to 424, 'cause I got, uh, Chairman Strickland over here sitting here with the judiciary coming up. It's up to you.

227. 1:10:01

     It's good. It's good.

228. 1:10:03

     It's up to you. I'm, I'm with you, baby. I, I, I'm easy to work. Let's get done. Um, now we're into the gold rush bill.

229. 1:10:10

     Okay.

230. 1:10:11

     New gold rush bill here in Georgia. Uh, 424, S- uh, Chairman Harbin has brought this bill to us, uh, Transaction Gold and Silver Act. All right, Chairman Harbin, let's go.

231. 1:10:21

     Thank you, sir. I appreciate it.

232. 1:10:22

     And we have several signed up for this, and we have some on Zoom, so we're going to try to get to them.

233. 1:10:27

     Okay. Well, let's, let's d- we'll deal with it, and also, uh, I have been working also with the treasurer as far as that. He's a part of this, 'cause we're, uh, you'll find, we'll find that as he's in this, uh, legislation as well. What we're seeing is this, is that, um, five different states already have adopted transactional gold and silver.

234. 1:10:45

     Oh.

235. 1:10:46

     Uh-

236. 1:10:46

     Appreciate it

237. 1:10:46

     ... and it's not something that's foreign. If you look at Article 1, Section 10 of the US Constitution, states cannot issue currency, but they have, can have gold and silver coinage that can be used for transactions and debts and things of that nature. And so that's not anything that's n- not unusual, uh, uh, except we've not dealt with a lot of gold and silver. Uh, Texas has its own depository. We're gonna talk about depositories in a little bit, but basically, it's constitutional. It also, in this bill, it would make gold and silver as legal tend- tender. That means this, is that any increase in the value of a gold or silver would not be taxed by the State of Georgia as far as capital gains, because it's legal tender in, in that respect.

238. 1:11:27

     Um, gold and silver, providing that gives us a, a, a, an ability to diversify from a standpoint of what we hold in investments, that we can own gold and silver. And we're gonna talk about the problem right now, is that if you own gold and silver, you have to find a broker to s- to trade it or handle it, and things of that nature, and we're gonna try to address that as we look at this. How does the average individual be able to invest in gold and silver? Today, if we look at this, gold's trading at about $5,000 for a ounce of gold.

239. 1:12:00

     So somebody's gotta have, uh, uh, that much money in order to buy that coinage or that h- asset. Also think about this, is that we have our dollars, but you could own cattle, you could own timber, but you could also own gold or silver. They are all commodities that would be o- could be owned. What this does, the s- the State of Georgia would have a depository, and that depository, we are not looking at building a physical depository, because there are operations such as Brinks that we can contract with, and you would pay a storage fee to put your gold into the depository, and you would pay a monthly charge to them to hold it.

240. 1:12:38

     But in addition, and that's our, our, our bullion depository, then we would have our Bullion Depository Commission. That would be made up of an appointment by the governor, two appointments by the, uh, Senate, and two appointments by the, the House of Representatives, so a five-member board, with our treasurer as the administrator of that com- c- commission. We would have an electronic payment system that would be there, and this is where we talk about fractional gold, and that is the ability to spend money at a fraction from that standpoint, and there's electronic technology that has that available.

241. 1:13:16

     We are not a- asking for a single vendor. We could have multiple vendors for storage or multiple vendors for transactions, but we have that. We believe that free enterprise is the best way to do that, and having multiple vendors in that respect. Um,

242. 1:13:36

     the commission, the commission, we just talked about the makeup, uh, members, things of that nature, and here's the other part you'll also find, uh, by the Georgia Department of Audit and Account in your file folder, is that there would be no cost to the state in setting this up. What would happen is you would put through the fees that you pay for storage and the fees that you would pay for transaction. It would all be self-funded from a standpoint of that nature. The only part we would have is we would have a commission that would oversee the accountability to the depository and the accountability of the electronic transfers.

243. 1:14:14

     And you should find that, uh, operational. Uh, what was said is that, that we would out ha- not have to have any additional state funds, the depository would not, and also the electronic payment systems, there would be no cost to the state, because it would be covered by the fees of the user. So we're not increasing any cost to the state, and it would be optional to them. Um, we talked about you can have more than one depository or electronic system that would take place, uh, that are there. Um, also, we would protect the privacy of the individual, that if you put money into the depository, that would remain as a private issue.

244. 1:14:54

     That we would also require that insurance be provided to cover those assets at the depositories in which they're stored. And what this does, it gives people the ability, someone could invest $100, or they can invest $50,000 and have access to it. I have with me right now this. This is a, uh, this is a one-ounce gold coin. This one-ounce gold coin has the equivalent value of $5,000 today. The question is, if I hold that, how do I spend that?

245. 1:15:26

     No, you can't have it.

246. 1:15:27

     Okay.

247. 1:15:27

     No, I'm not gonna pass it around. I don't trust, I don't trust any of you. No, no, no, no, no. No, but look from afar. But is you c- is how do I spend it? I have to go to a coin broker or somebody who can broker this for me, where if this is in the depository and we have these electronic, I can then, I could do this. And I hate to tell you this, I went by Chick-fil-A this, today, and I got the, these new Chick-fil-A cups. There's a gold cup, but it's not available yet. I wanted to get the gold cup, but I couldn't get the gold cup.

248. 1:15:58

     Because here's what happens. I have a g- a debit card right now, and Glint, uh, Glint is out of London, England. The, the b- gold is stored in Switzerland and insured by Lloyd's of London. I have an account with them, and I can take my card and swipe it, and I can buy my Chick-fil-A, my favorite is ch- a frosted coffee with a shot of chocolate in it, extra thick. I have to tell you that. You ought to try it.

249. 1:16:22

     Thank you for sharing that.

250. 1:16:23

     And, and, and, and, and a gold cup, uh, from my standpoint. And what they do on my app on my phone is I have the transaction that's there. So I have a debit card on my gold account. The pr- that gives me the ability to hold an asset, but also gives me the ability to transact business with it, and I think that's a phenomenal way to go. If you look at the value of gold long-term over the last 10 years, it's run close with the S&P 500.

251. 1:16:53

     But it's an asset that doesn't go away. I might also add, it's a tier one asset for banks. Banks hold gold because of its stability to hold value. And what I believe is bringing this is economic freedom, because this, not too many people can afford to buy the whole coin, but they can, uh, put a small amount in there and have the ability to save that and use that and spend that. That access is what I see as a, a major, major part to being able to get after your investments as far as that. And the ability to fractionally do this, in my opinion, is, is a, just an outstanding way to do that.

252. 1:17:27

     And I've gone over this with the treasurer. He may have some comments on this, but I said, "Would you handle the admin on this?" He says, "I think I can do that." Uh, if he can handle billions, I think he can handle this. But, uh, uh-

253. 1:17:38

     Let, let's, uh, before we get treasurer holding these-

254. 1:17:40

     We don't want to get him. Okay.

255. 1:17:41

     Let's- Let me, let me, let me, let me understand this a minute.

256. 1:17:45

     Get it in my pocket first.

257. 1:17:46

     Uh, you're the first- You're the first senator I've ever known try to buy a vote. I mean, that was, that was pretty good with-

258. 1:17:52

     No, no. I was showing you. I wasn't buying.

259. 1:17:55

     I'm sorry. I misunderstood. I'm sorry.

260. 1:17:59

     I, your bill was looking pretty good, but, uh, we're not, we'll talk now. Um, let me understand this. How do we keep the State of Georgia out of this bill? I, we don't want, I don't want the State of Georgia, no, I don't think anybody wants the State of Georgia having to regulate, set up a committee, pay anybody, deal with anybody. All I, I know our fiscal note said it would cost nothing. How do we make sure that the State of Georgia is not involved in any of this?

261. 1:18:23

     What we want is this, what Article 1, Section 10 of the Constitution says, that the states create this. This is a c- this is a right of the united, of, of a, a vi- of a state, of which Florida, if you listen, uh, Governor DeSantis talked about it. The other governors, uh, have done this in Arkansas, Louisiana. They see that as something for their people. It allows their people to own an asset and to be able to transact with that asset in a way they could not otherwise do it. And what we have is we have the state that regulate, regulates and makes sure that it is h- held securely, if you will, and that the transactions are done properly.

262. 1:19:02

     It creates guardrails.

263. 1:19:04

     Correct me if I'm wrong now. Correct me if I'm wrong.

264. 1:19:05

     Yeah.

265. 1:19:06

     Aren't there already a- the digital platforms or platforms out there that you can own and have gold and silver, et cetera, et cetera, already available?

266. 1:19:14

     There may be. I don't know of any that are regulated by the state, per se. And th- what we're doing, we're executing the rights of the State of Georgia under the US Constitution to be able to have gold and silver coinage depositories from that standpoint, and we're asking them to use, exercise the rights that are under the US Constitution.

267. 1:19:38

     Okay. Um, questions from the committee before we get started anything? Whatever you want.

268. 1:19:42

     Um, yeah, Mr. Chairman.

269. 1:19:45

     Recognize Senator Jones.

270. 1:19:47

     Thank you, Mr. Chairman, for bringing this bill. But why is it important that Georgia recognize-

271. 1:19:52

     Say that again, sir

272. 1:19:52

     ... why is it important that Georgia recognize this form of currency?

273. 1:19:57

     Well, under the US Constitution, it says gold and silver are the only two things that a state can hold in the coinage as far as that. We couldn't do Bitcoin or platinum or anything else. Because our foundation, if you go back historically, gold and silver was the, how do you say, currency of choice. Currently, we're off the gold standard from a dollar standpoint, so there's no, how do I say, the, the, there's not the, the, the value of the dollar is, is based upon good, good faith.

274. 1:20:27

     This is taking an asset of gold and making it available to an individual, that he can own it at lower levels than having the higher levels, and be able to transact business. But we need the state to do that in order to take the constitutional position that the state has done this and exercised their authority under the Constitution.

275. 1:20:49

     Just one follow-up.

276. 1:20:51

     Absolutely, Senator.

277. 1:20:52

     Um, from your explanation, the gold is somewhere off in Zurich or Switzerland or some other place.

278. 1:20:59

     Correct. Currently. I want it on u- I want it on Georgia soil.

279. 1:21:01

     Yeah, I'm still not comfortable. I'm still not understanding the role, and perhaps the treasurer can explain the role that Georgia would actually play in these particular transactions.

280. 1:21:09

     Yeah.

281. 1:21:09

     That would be helpful for me.

282. 1:21:10

     Yeah. You want to address that, sir?

283. 1:21:13

     Mm-hmm.

284. 1:21:13

     Can, let's see.

285. 1:21:17

     I'm sorry.

286. 1:21:17

     Mr. Chairman, could he-

287. 1:21:17

     We're trying to, we have, we have several, Senator Strickland's got a, a, a judiciary. I think Senator Hodges has got to be in there with him. So here's what we're gonna do. We got a lot of people signed up to talk about this bill. We're gonna make this a hearing only today. We're gonna come back on Tuesday and take this bill up on Tuesday. So we're gonna get everybody in to be able to talk, so these guys can go do what they gotta do, and they're gonna try to come back. But we're gonna keep going. We're gonna keep going

288. 1:21:41

     So you're-

289. 1:21:42

     Okay

290. 1:21:42

     ... we're fine. We're g-

291. 1:21:43

     Can he, h- he was gonna answer.

292. 1:21:44

     I'm sorry. Go ahead.

293. 1:21:45

     Senator, Senator Jones-

294. 1:21:46

     Oh, okay

295. 1:21:46

     ... ahead-

296. 1:21:47

     Senator Jones, go ahead

297. 1:21:47

     ... to that. Okay.

298. 1:21:49

     So, so the question again?

299. 1:21:50

     The question is, considering that these assets are held somewhere at an, away from the State of Georgia, wherever it is out there, and-

300. 1:21:59

     Mm-hmm

301. 1:21:59

     ... it's all backed by those assets, what role would Georgia play and why would Georgia need to be, I hate to use this term, but an intermediary in these particular transactions?

302. 1:22:09

     E- excellent question. And, uh, and I'm not an expert on this. We, we're not in this business at this point, but as, uh, my, as I understand it is, uh, yes, when the Senator Harbin used his card to purchase Chick-fil-A, he'll, he'll either be, have a capital gain or a loss on every transaction. Is it, if it's, if it's actually designated, I'm presuming it's, it's as legal, um, tender for Georgia, then, uh, it would not be taxed. It'd be like you're using cash or any other form of, of, of, uh, uh, of currency.

303. 1:22:40

     So with that, it doesn't have to be housed in Georgia, but has to be designated, if I'm understanding this correctly.

304. 1:22:46

     Yeah.

305. 1:22:46

     Is it so, and, uh, so there's no assurance that Georgia would ever have a depository here. Um, that, uh, the, as you, as the, um, uh, as the fiscal note said, we're gonna, we would explore to see whether there are other ways that, uh, other states that are, are already in this business, could we contract with them? Uh, could we, um, are, are there other vendors that would, uh, would pay the, the cost to actually, um, set up and operate? There are a lot of banks with, uh, with, uh, extra vault space, and so it may be that there's a bank of banks that could be held, but it could be we just, we contract, um, uh, with other states.

306. 1:23:21

     The, the one thing that we did that, uh, this brought to mind was the ABLE program. We, run the cost savings plan, um, which is, uh, very successful. When the ABLE program, which is a smaller one for disabled individuals, it was gonna have very low volume. Is it, so, uh, when the legislature passed that and they assigned it to us, we reached out and explored other states and that were in that business already, and we ended up contracting with Ohio, um, to offer that service to Georgia, uh, Georgia citizens, and, uh, just essentially, uh, labeled it for Georgia.

307. 1:23:54

     We'll look at other states to see what they're doing, and is there something that would meet all the board's requirements for that and explore that, 'cause we would not have any funds that we could commit, you know, as far as actually building anything or operating anything ourselves. So, but if, again, I think it's, if it is designated, uh, legal tender here, as far as I understand, uh, so is it then, uh, someone could transact without every time they do, they'd have a gain or a loss and, uh, and then get a, uh, a statement and then have to file for the taxes.

308. 1:24:24

     To Georgia. Could potentially tax these transactions.

309. 1:24:27

     Well, unless it's-

310. 1:24:28

     Yeah

311. 1:24:28

     ... unless, if this isn't, uh, I guess you are.

312. 1:24:30

     Yeah, this declares it as legal tender, so Georgia would not, if we adopt this bill, would, would say that gold and silver are legal tender and there would not be a tax on the capital gains.

313. 1:24:41

     So, so it doesn't matter where it's stored, it's whether or not how it's, how it's structured for that purpose, is my understanding, but I'm not an expert.

314. 1:24:48

     A- and, uh, page three, line, uh, 43 is the bullion depository means an entity that provides vault facilities within the United States for the storage of gold and silver bullion, uh, provides accounts that hold gold and silver bullion and allows account holders to buy, sell, save, or spend gold and silver. And so that's the definition that's being used for that depository. Uh, and like I said, we have one already in Texas that's operational. Other states are looking at the ability to, in lieu of building an actual physical s- uh, facility, is to use a third party like a Brinks or somebody like that, uh, to hold it and to insure it and, uh, and to hold that physical asset.

315. 1:25:29

     And then we would have the electronic side, which is the ability to transact. They're just like today, you can buy fractional shares of stocks, things of that nature. You can even have debit cards tied to stock accounts, if you will. This is doing just gold and silver, trying to line up with the Constitution and using the Constitution and our state rights for that.

316. 1:25:51

     One final.

317. 1:25:52

     Yeah, sure.

318. 1:25:53

     And that's the part that concerns me, because gold is a lot more volatile than some of the other assets the state may be holding, and how would you get around, um, that concern in the Constitution about holding assets that have this kind of volatility that gold may have?

319. 1:26:09

     There has been, uh, I would say volatility more over the last... If you look at the last year, we've seen more, um, upturn if we, if you, if you will, from that standpoint. But over a longer period of time, if you look at it against the S&P 500, gold has maintained. It's also a tier one asset, but for banks. Banks hold gold not for the return, but for the stability that it provides to their portfolio. And so that's the part that I would say is that gold, it has a value, yes, it can go up or down, but it's, uh, and the ability to have it...

320. 1:26:41

     I don't wanna keep it in my house, in my, in my basement, if you will. I have a safe place to put it, and I would like to put it within the State of Georgia or somewhere within the State of Georgia, 'cause if I wanted it, I could go there and I could actually take my gold if I wanted to take it on Georgia soil.

321. 1:26:56

     Okay, let's, uh, Senator Hodges real quickly, and we got several people wanna talk, so Senator Hodges, just recognize.

322. 1:27:00

     I've got a number of questions, but I could just ask a couple.

323. 1:27:03

     Okay.

324. 1:27:03

     We're gonna get to ask questions Tuesday?

325. 1:27:06

     Absolutely.

326. 1:27:06

     Okay. All right. Uh, um,

327. 1:27:11

     what will you be a- if we pass this bill, the legislature, what will you be able to do that you can't do right now? I mean, you can own gold right now.

328. 1:27:23

     Correct.

329. 1:27:26

     You have a card in your pocket that you use to buy that Chick-fil-A drink, and I don't think purchasing that Chick-fil-A drink makes you cash in the gold that's in your account and have to pay federal and state taxes on it, does it?

330. 1:27:45

     Yes, it will. Under current scenario, yes. Because that is an account that's in your-

331. 1:27:49

     Federal taxes?

332. 1:27:50

     Federal and state taxes.

333. 1:27:51

     Okay, so if we do this, then y- you wouldn't have to pay federal taxes?

334. 1:27:56

     State tax.

335. 1:27:57

     Federal tax.

336. 1:27:57

     State. We would have to pay federal still under current scenario. It would be long-term capital gains, depending upon how long you kept it.

337. 1:28:05

     So you could leverage your, the gold in your account, but you're still gonna, you're still gonna have federal tax liability?

338. 1:28:12

     Correct.

339. 1:28:12

     Why would anybody wanna do that?

340. 1:28:14

     I think the biggest thing-

341. 1:28:15

     I mean, I can see a home equity where, you know, you, you, you're-

342. 1:28:18

     Right, right

343. 1:28:18

     ... tapping into equity or it's a margin account where you're, you know, you're not having to-

344. 1:28:23

     Right

345. 1:28:23

     ... but I, hmm, I just, I don't... And a couple of other questions.

346. 1:28:28

     Okay.

347. 1:28:29

     Okay. Would you think you'd have the imprimatur of the state on this and people would say, "This account, I mean, this is a law passed by the state legislature, so this is guaranteed. I'm not gonna lose any money on this." And their gold may go down, and they may lose money. And, and, um, and that's one question.

348. 1:28:54

     Okay.

349. 1:28:55

     And the second question would be, um, it looks like we're telling people that they can... If, if, if, if you don't have to pay taxes on the sale of the gold, then why is that not a cost to the state? So, and you're saying your fiscal note says there's not a cost to the state, but I mean, if, if right now, if you have to, if you've got gold in an account and you sell it and the state gets tax, has tax income from that-

350. 1:29:24

     There you go. Yeah

351. 1:29:24

     ... then why would that not be in the fiscal note if you're gonna take that away, or the state's gonna lose income? Those are my two question.

352. 1:29:32

     Good question.

353. 1:29:33

     Do, do you think that, that people will think the, have the full faith and credit of the State of Georgia behind their accounts, just like the FDIC, you know? Um, and secondly, why would it not cost us money?

354. 1:29:47

     And wouldn't it be the same thing as if we-

355. 1:29:49

     Oh, and one more, one more. I'm sorry.

356. 1:29:50

     Yeah. Okay.

357. 1:29:51

     The third is-

358. 1:29:51

     Okay

359. 1:29:52

     ... we, why establish a new hierarchy to oversee this when you've got a perfectly good banking department right now? If we were to pass this, the banking department, you'd have to give them some money to do it, but they're already set up. Why establish... So those are my three questions.

360. 1:30:06

     Okay. Let's take, take number one first. Give me, give me your number one. All right, the number one was, um, safety.

361. 1:30:13

     Okay.

362. 1:30:13

     The perceived safety that's there. But let's take this, is that if I come to a bank and I buy a bond, that bond has the ability to lose value-

363. 1:30:21

     Mm-hmm

364. 1:30:21

     ... if interest rates go up, so there's an up and down. That's, that's an economical decision of an asset that's there. Would, would I be right in, in saying that, that if I buy the bond, interest rates go up, the value of that bond goes down?

365. 1:30:33

     Mm-hmm.

366. 1:30:34

     And that's a, as, as a transaction. That's a, a, a, the cost of money and the interest rates that are there. This is, is I'm buying a commodity, that I'm buying just like I would buy timber or would buy a cow, cattle or whatever. It's a commodity that has the ability to go up and down just like anything else. What I see that makes this unique in this respect, if I have gold and, and let's say I put it in the safety deposit ba- box of my bank, and I have to spend, I wanna spend it or cash it in, I have to go and I have to find a broker in order to do that.

367. 1:31:06

     What this does, this gives me free- some freedom that I could actually take that money through the electronic transfer process and c- create that and have access to that without having to go through that brokerage issue or selling it off that way.

368. 1:31:21

     I b- I mean, your lines 168 and 169, I think I know what you mean. "The bullion depository shall ensure all deposits under an all risk, non-governmental insurance policy for 100% of the full replacement value of such deposit." What you mean is if, if the depository were to blow up.

369. 1:31:41

     Blow up, melt down.

370. 1:31:42

     All right. But I could reasonably read this to say that the state's gonna protect my investment. That, I mean...

371. 1:31:50

     And I would be open to this, is that we wanna put ver- verbiage in it, just like a securities. You know, your, this is no guarantee. Past performance, that type of thing, is not a guarantee of future. But it is a way in which someone can own something and have access to it a- as well.

372. 1:32:06

     Right.

373. 1:32:07

     Third question I don't think I got to, or did I?

374. 1:32:10

     You didn't. Third question, you have, you, you're already doing it. You're, you already have a card, and you're, you're doing it.

375. 1:32:16

     Well, that was-

376. 1:32:17

     Right.

377. 1:32:18

     That was...

378. 1:32:18

     Yeah. I mean, in the interest of time, we can go on.

379. 1:32:21

     Okay. Yes.

380. 1:32:21

     We'll, we'll get to it.

381. 1:32:22

     Okay. Okay, fine.

382. 1:32:24

     Let's, um, th- thanks, Chairman. Let, let, let's hear from, um... You okay?

383. 1:32:29

     I'm good. Yeah. I'm all the way from-

384. 1:32:31

     Okay. Um, we got someone, we got some Zoom folks, and we got some folks here. Uh, let's talk... Who, uh, is Kim Coleman in the audience? Ms. Coleman, if you'll take the podium, tell us who you are, tell us who you're with, tell us why you're for or against, whatever the deal is. And I hate to limit you to a time limit, but you're gonna have to kinda do it really quick, or I got a college in.

385. 1:32:49

     That is really good. All righty, uh, thank you for letting me speak and for having this time. My name is Kim Coleman. I'm with a company called Goldback out of Utah, generally regarded as a leader in the sound money movement. Um, we acknowledge the, uh, and appreciate the senators' efforts to advance allowing gold and silver to be used as money again, and we agree with the motivating concerns about the past, present, and future of our monetary policy, especially how it has harmed the purchasing power of Georgians. We support Georgia recognizing gold and silver as legal tender and related common sense tax exemptions.

386. 1:33:22

     All that's great, fantastic. However, to the point of, we have heard in the line of questioning, this proposal seeks to expand the scope and duties of the state government to create a new activity that will compete directly with the precious metals industry, of which I represent one of those today. To compete directly with the industry, which is thriving, growing, and meeting the market demand under strict regulations, or it otherwise allows the state to contract to have those services conducted.

387. 1:33:52

     In other words, picking winners and losers. Hundreds of private sector providers offer secure depository services, and residents of Georgia do not lack access to this service. Thousands of private sector companies buy, sell, and exchange gold and silver, and residents of Georgia do not lack access to these services. And at least a dozen companies provide precious metals-backed electronic payment services, and residents of Georgia do not lack access to these services. It is a fundamental economic principle that the people benefit from the pressures of competition that exists in a private, open market.

388. 1:34:28

     We oppose the State of Georgia entering the financial services arena and the precious metals retail market, whether conducted internally or through contractors, especially when there is no compelling state interest to do so, nor is there a public demand for it. Proponents have expressed that the citizens of Georgia and the state receive these benefits predicated upon the state being the custodian of private property. Please think about that. This would mark an unprecedented shift from government, uh, state government being a regulator and overseer of financial services to becoming a participant in it.

389. 1:35:07

     And when government part- becomes a participant in financial markets, it inevitably distorts them. Centralizing digital legal tender transactions at the state level is concerning, regardless of Line 38 directing the state not to view it so. With this, while this scheme and its variants have been proposed in a number of states this biennium, overwhelmingly, most states have failed on the premise that this is simply an unnecessary anti-free market expansion of government, and we ask that you oppose this bill.

390. 1:35:39

     Thank you so much.

391. 1:35:40

     Um, thank you, ma'am. That was very, very well put together. Uh, JP Cortez, is that... Am I saying that right? Please take the podium. Now, you've got to top what she just did, okay?

392. 1:35:52

     I'll try my best.

393. 1:35:53

     Oh, yeah, you ... Please tell us who you are, what you are, and for and against it.

394. 1:36:05

     Hello, Committee. Thank you very much for the opportunity to testify before you today. My name is JP Cortez, and I'm the executive director of the Sound Money Defense League. We're a national public policy group with supporters in every state, including Georgia. I will say very briefly, it's very exciting for me to be here. I'm a product of WJ Cooper Elementary, JP McConnell Middle, and I'm a proud Grayson Ram. It's very exciting to have worked on legislation like this all over the country and finally get to do it here in Georgia. Unfortunately, I'm here to say that I stand in strong opposition of this Senate bill. The reason for that is because this bill runs counter to sound money, uh, principles, free market competition, and is generally a step in the wrong direction as it pertains to these policies.

395. 1:36:42

     The basic mechanisms contemplated by this bill are already legal. As was shown, the card was pulled out. You can already swipe it. And to the extent that the tech exists, that's great. If someone wants to swipe their card and pay a transaction fee to the vendor and then pay a federal capital gains ta- uh, 28% collectible rate and then pay a state income tax, by all means, they should be able to do that. But that doesn't mean that the state has to become, uh, entangled or intertwined in this, uh, in this act that is already legal and taking place every day. On top of that, there's very little demand for people to spend gold.

396. 1:37:14

     Part of that is economic law. Gresham's Law says as long as there's bad money in circulation, there is no need to spend your good money. Why would I want to spend gold so long as, uh, vendors and tax authorities are willing to accept devaluing paper notes? There's no reason for anyone to spend gold. Proponents of this bill are also making very strange and, uh, dishonest claims in some cases that have to do with both taking and taxation. Proponents of this bill, this... I'm glad the question was asked directly, and I'm glad the sponsor answered correctly that state passing these law have absolutely no impact on IRS taxability of assets.

397. 1:37:48

     But other proponents around the country are arguing that states passing this make it so that the, it's now exempt from federal taxes, which is obviously tru- untrue. On top of that, they're also saying that the, the, uh, the depository part is, uh, anyone who, uh, anyone who endorses or uses this now state-blessed depository will be exempt or protected from federal confiscation, and if not, you're at the risk of having your things confiscated by the federal government. These are marketing tactics used by the worst actors in our industry, and there's no reason that the state should be party to that.

398. 1:38:22

     Utah's governor vetoed a similar bill of this as tw- in 2025 on top of earlier this week, Utah voting to kill this bill, joining South Dakota and Mississippi just in the last two weeks as states that have voted no on this bill. Precious metals firms are already regulated. There's Bank Secrecy Act, federal anti-money laundering laws, civil laws, criminal laws. This is already a very regulated and very accessible industry. Uh, gold owners don't want this. The reason people buy gold is because they distrust the government. Asking them then to join or to, to become entangled with a government, uh, program that centralizes all of gold is not, uh, uh, gold people don't actually want that.

399. 1:38:59

     On top of that, lastly, states are saying that they don't know what this will cost. Respectfully, and I don't mean to impugn the motive of any good senator or any good, uh, sponsors who are making good points about the fact that this is a very legitimate problem, de-dollarization, inflation, uh, the, the dollar, c- dollar being harmed or attacked across the world, all of that is very, those are all very legitimate concerns. But the answer to that is not staging a partial takeover of an industry that is already thriving and regulated. So for that, um, and s- many other reasons, I s- stand in strong opposition to Senate Bill 424, and I'm available for any questions.

400. 1:39:35

     Thank you very much.

401. 1:39:38

     Thank you, sir. Thanks, sir. Uh, Brian A- uh, Brian Allen.

402. 1:39:42

     I wave.

403. 1:39:43

     You waving? How you doing?

404. 1:39:48

     You don't have to. You're welcome to get up there and go for it. Okay, we got, uh, some Zoom folks here. I need to get them in. Elizabeth, how do we get these folks in here? Uh-

405. 1:39:56

     They're-

406. 1:39:57

     Are you guys on? Uh, uh, Joseph Cowens, Ben Stevens together Are you guys there? Can you hear us?

407. 1:40:11

     Jackson, you got them, baby?

408. 1:40:12

     Yeah. There.

409. 1:40:14

     Coynes, you there?

410. 1:40:19

     Mr. Coynes, you gotta speak up.

411. 1:40:21

     He's waved.

412. 1:40:23

     Yeah. So yes, Jason Cousins. I'm here, yeah.

413. 1:40:25

     Please be as brief as possible and, uh, tell us who you are, who you're with.

414. 1:40:30

     Hi. Yes. Uh, my name is Jason Cousins. I'm the founder and the CEO of Glint Pay. We're the first company in the world to enable physical gold to be used in electronic payments, and as most people have said, yes, uh, the existing technology is prevalent across the United States. We've had, uh, nearly quarter of a billion people register with Glint, and we've got about 60-odd thousand people using Glint accounts every single month. We have about half a billion dollars of gold on the platform, and we're the first company to supply US state treasury.

415. 1:41:00

     So the question, uh, has been, well, why does the state need to get involved? Well, I think there's two reasons. Um, number one, in 1933, uh, President Roosevelt signed Executive Order 6102 forbidding the hoarding of gold coins and bullion, and so federal government has got a track record of being able to interfere with people's ability to be able to protect themselves from the destructive effects of inflation. And by the state authorizing, uh, using their constitutional rights to authorize a, uh, s- gold and silver transaction, electronic transaction gold platform, it surely must give some protection, uh, against future federal interference.

416. 1:41:42

     And the second thing, which of course has come up before, is that if you're fortunate to have a capital gain, which people are more often than not, uh, with gold because, you know, the dollar has been losing its purchasing power. In my lifetime, it's lost nearly 85% of its purchasing power. Since COVID, it's lost 20 to 25% of its purchasing power, which is a terrible thing for economic justice. It really affects those, those furthest away from the money supply, the least well off. Um, g- they're the ones that get affected by this more than anybody else.

417. 1:42:13

     Uh, but if you're fortunate to have capital gain ta- capital gains tax, and of course at the moment you have to, uh, use one of the capital gains tax reports with Glint and, uh, and pay your capital gains tax. But of course, um, uh, th- this bill, as I understand it, uh, uh, stops the state being able to charge, uh, what I think and what a lot of people think is an immoral tax on just because people's purchasing power is being maintained, and it, it doesn't, of course. It does not. Um, and I don't think anybody is saying that it, uh, it will stop federal g- uh, the IRS charging capital gains tax, st- ch- charging capital gains tax.

418. 1:42:47

     But it does lay the path. You know, as an authorized currency of the United States of America, albeit state ordained, as Florida and Texas and Arkansas and Miz- Missouri and Louisiana, and I know 14 other states are looking to do this. As an authorized currency of the United States of America, albeit state ordained, under the constitutional rights that they have because the Founding Fathers could see the tendency and the, um, and the, uh, and, a, a, a, a, and the, um, temptation for federal governments to move to fiat currencies.

419. 1:43:20

     Then, of course, it, it, uh, it lays the path for the IRS to potentially drop capital gains tax, and of course the federal government might choose to do so. So no one's saying, I don't think, that it will. But, um, yeah, I mean, I, I, I think that, uh, the other thing is, is that this or these types of systems like Glint already work within existing regulatory frameworks, both federal and state, around things like know customer identification programs and, um, anti-money laundering platforms. So again, what is the state to do? Very simple.

420. 1:43:51

     The state just needs to authorize it as an authorized currency under their rights and give people the protection that they probably will get against any federal interference, and to lay the path for, um, federal capital gains tax to potentially be taken away, and to give people the consumer protections that they might get by the state checking that the gold and silver is in the vault. And to say this interferes with the existing, um, gold bullion industry, I think is, is a, is a, is a misunderstanding.

421. 1:44:23

     This is gonna grow the size of the gold and silver industry. It's very, very different to having custody of gold bars and coins on your person in your house. These, those things cannot be used in payments. We're talking about a gold payment system, one that could put Georgia at the heart of a growing gold, uh, and silver, uh, digital gold and silver, uh, payment system, ecosystem that, um, that the whole state could benefit from. Individuals, businesses, uh, banks, and of course precious metals dealers, as we're talking to many of them who are, who are working with us in partnership rather than going against it.

422. 1:45:00

     What state are you in, sir? Where are you now?

423. 1:45:02

     Sorry. I, yeah, our, our company, our company is, uh, has customers in every state in the United States of America.

424. 1:45:10

     Okay. Um, uh, your, your position is, is, is... Are you already doing this in Georgia with individuals now?

425. 1:45:19

     Yes. Yes, we are.

426. 1:45:21

     Okay. All right. Gotcha. Thank you for your testimony. I've got to move. I appreciate it. Um, John Yaros. Jackson, you know John Yaros?

427. 1:45:30

     Hey, you hear me okay? You hear me okay?

428. 1:45:35

     Is, is This you?

429. 1:45:36

     Yes.

430. 1:45:36

     Yes, John. Please tell us where you're, where, where you, where you calling from, and tell us who you are.

431. 1:45:40

     Yeah, so good afternoon, Mr. Chair, members of the committee. Uh, my name is John Yaros. I'm calling in from Idaho, and I'm the president of Verfin Solutions, a financial technology consulting company. I've previously served in various senior government positions, including leading the Terrorism and Nuclear Proliferation team at the US Treasury Department's Financial Crimes Enforcement Network, leading investigations for the US Senate Homeland Security Committee, and recently serving as the Securities Bureau chief for the state of Idaho. And I'm here today to strongly oppose Senate Bill 424 To start, it's important to note that I'm a strong advocate for pro-gold and precious metal policies, but I can't support this bill because it's unnecessary, establishes a massive anti-competitive government bureaucracy, creates taxpayer risk, and will undoubtedly lead to consumer confusion and dangerous market distortions.

432. 1:46:33

     This bill seeks to create a large, complex government-run public-private partnership where the State of Georgia would establish and oversee a bullion depository operation and either approve or operate an electronic payment system based upon gold and silver. It would also create a bureaucratic and potentially costly bullion depository commission to oversee this operation. And I hate to say it, but we all know when the government gets involved where it doesn't belong, there's always hidden cost, and that would be the case here.

433. 1:47:04

     Uh, this would unnecessarily really take the state out of its traditional role as a regulator and make it a participant in private sector and financial activity where the state would be directly competing against private sector entities and choosing winners and losers. Uh, this would really significantly distort free and fair competition in the private sector, while also negatively expanding government reach over the well-designed regulatory and compliance mechanisms that already exist in the banking and precious metal sectors, all for the benefit of a small handful of favored vendors.

434. 1:47:37

     Essentially, the state would become central to gold and silver custody, payments, and vendor authorization, and would leave taxpayers on the hook for operating expenses and if something fails. And I think we can all say this as well, um, you know, when there are losses and something goes wrong, taxpayer liability really does get overridden overall. Furthermore, when we take a look at it, it makes no sense to pass a bill that would cause harmful government intervention and pose significant risk to honest, hardworking taxpayers when the public can already, A, legally buy, sell, hold, and transact gold through numerous private platforms that are already operating with proper legal and consumer protections.

435. 1:48:16

     B, we know that the industry already provides trusted precious metal storage at scale for banks, investors, and individuals nationally, things as we've talked about, right, Brink's, Loomis, and many others. And C, nobody is denying legal services or access to these types of financial products and activities. They already exist. So since all the necessary components for transactional gold already exist and are successfully functioning, there's no need for the government to intervene here. Worse yet, I'll tell you this as a former oversight official, I fear this legislation will cause tremendous consumer confusion, as many people may believe that they are covered by well-tested banking consumer protections and FDIC insurance, when in fact they aren't, because this looks and feels like banking, but as we all know here, it isn't.

436. 1:49:02

     Furthermore, as an expert in illicit finance and scams throughout my career, I also get concerned when I hear advertising claims that either seek to strike fear into consumers or make unrealistic promises. Fear and incentives, in my experience, are what untrustworthy actors use to create profitability for themselves at the expense of their victims. Unfortunately, I've seen advertisements for this proposal that do both. First, they highlight that this legislation has the ability to pave the way for preferential gold and silver tax treatment, even though the IRS has said nothing of the sort.

437. 1:49:34

     Secondly, advertisements emphasize that a convoluted state-run structure is needed to build trust, which is really an odd claim considering the private sector has been successfully operating and building trust with its cust- customers throughout all these years without the need of any government intervention. And lastly, advertisements attempt to strike fear into individuals by highlighting that if a government-run operation is not established, the government is more likely to confiscate an individual's gold and silver. If anything, the threat of confiscation or taking, as they like to say, is all the more reason not to have the government involved in private gold and silver custody and financial transactions.

438. 1:50:12

     So in the end, everything in this bill claims to fix and do already exists and is successfully running. There's no need to build a convoluted state structure that will expose taxpayers to unnecessary costs and risk, create consumer confusion, and lead to a situation where the state is picking winners and losers at the expense of the private sector, which will ensure market distortions. So with that, I'd like to ask Mr. Chair and members of the committee to reject Senate Bill 424 and vote no, and I will stand by for any committee questions.

439. 1:50:44

     Thank you so much for your time. Appreciate it.

440. 1:50:47

     Uh, tha- thank you, Mr. John. I think we-- I wish we had time for questions. Thank you. We need to go to, uh, Laurie Bolton. Is that right, Jackson? Laurie Bolton, please, right quickly.

441. 1:50:56

     Yes, I'm right here. Uh, my name is Laurie Bolton. I just wanna start, I'm gonna keep it short, but there's a ton of mischaracterz- characterization of the bill that is going on by our opposition. I would challenge them to read what the actual bill does. It does not pick winners and losers. The, the state does not become a participant or a custodian. Um, they are simply doing light regulation, which is what they do. You can't operate a business in Georgia without some oversight of the government. Uh, they're not, they're not actually running anything. The fear-based things that you're hearing are actually coming from the gold industry.

442. 1:51:30

     I'm here today to strongly urge you to vote yes on Senate Bill 424. It's a smart constitutional step to protect Georgia families from inflation and restore real financial freedom. There is an affordability crisis. Georgia families are hurting. The federal debt is exploding. The dollar is losing its purchasing power, and everyday Georgians need practical tools to preserve what they've earned. The gold industry wants to be able to allow institutions and the wealthy, the investor class, to be able to hedge against inflation. Well, we want to make sure that there's a way for, uh, working, the working poor and the middle class to do so.

443. 1:52:04

     This, this bill does not, um... What this bill does is it reaffirms gold and silver as legal tender under Article One, Section 10. It removes state taxes, including capital gains, on exchanges. It enforces gold clause contracts and allows voluntary physical or electronic transactions, all without mandates, government takeovers, or new burdens. Just really quick too, um, I know that you're receiving emails or automated robo campaigns opposing the bill, claiming regulatory nightmares, or arguing that this needs to stay purely private without any limited government facilitation.

444. 1:52:38

     These messages are misleading and come from a specific source. I want to clarify who is really behind them. These campaigns originate from the Sound Money Defense League, which presents itself as an independent grassroots group. In reality, it operates as a policy arm primarily funded by and tightly partnered with Money Metals Exchange, an out-of-state, Idaho-based precious metals dealer and depository vendor that c- directly competes in this market. Their aggressive opposition, labeling similar bills government schemes and boondoggles, consistently targets provisions that introduce competition from new private depositories and fintech options.

445. 1:53:13

     They maintain a Sound Money Index scorecard by state that heavily weights getting rid of taxes as their primary goal, helping them sell more gold and bullion. They may claim gold is money to boost sales, but they actively work to stop gold from being used as real functional money because it doesn't fit their current business model for selling and storing bullion for the wealthy and the institutions. Many others in the gold industry are leading the way to take advantage of this new business opportunity. Their fear-based letters and claims to legislators in other states have been repeatedly debunked by real-world successes.

446. 1:53:44

     States like Utah, Texas, Florida, recognizing gold and silver as legal tender with debit-like usability starting in 2026. Arkansas, Louisiana, and Missouri have all advanced similar approaches without the harms they predict. Uh, 15 states are currently filing this bill. It has already passed successfully out of committee in many, and we're very optimistic about full passage in the majority of these states. Treasurers, the ones tasked with implementing this, are supportive, and many h- have already having-- have already started discussions about interoperability between states.

447. 1:54:15

     Theirs isn't a principled defense of sound money. It's a transparent protectionism from an out-of-state vendor guarding its market share against broader innovation that would give average Georgians more choices and better tools to fight inflation. Uh, it, it's limited government legislation at its finest, honoring the Constitution, empowering families to hedge against inflation affordably, removes punitive taxes, and puts Georgians, not special interests from Idaho, first. I respectfully request the committee to reject these self-interested distortions, look at the bill's actual text and proven track record, and vote yes on SB-424.

448. 1:54:50

     Thank you.

449. 1:54:51

     Uh, Ms. Boone, where are you at? Where in the world are you at this point? What state are you in?

450. 1:54:55

     Oh, I'm sorry. I'm in Tennessee-

451. 1:54:57

     Okay

452. 1:54:57

     ... and I'm the policy director for the Transactional Gold Project.

453. 1:55:01

     Thank you, Ms. Boone, for your testimony.

454. 1:55:03

     Thank you. Thank you.

455. 1:55:03

     Uh, last person here, uh, looks like to me, Jackson, is that Mike Car- Is that right?

456. 1:55:08

     Yes.

457. 1:55:08

     Mike Carter. Mike, I hate to rush you, buddy, but you gotta rush. Go.

458. 1:55:12

     All right. Let me try and answer some, some questions as, as, as specific as I can. Um-

459. 1:55:17

     Yeah, but tell who you are, where you're from, et cetera.

460. 1:55:19

     Yeah. My, my name is Mike Carter. I'm part of the National Security Consult- uh, National Security Investment Consulting Institute. We are a solution to action tank that looks at geopolitical threats, and we l- work towards real solutions that protect America's national security and economic freedom, our economic infrastructure. This movement is a movement. It's a movement of, of the consumer. It's a movement of your constituents that say, uh, they want to have a hedge against inflation. This is about affordability. Uh, you know, when we opened up, uh, this, this, this committee hearing today, you guys talked about guide- guide rails.

461. 1:55:50

     How do we make sure the c- the consumer is not taken advantage of? How do we make sure that there's a limited government role to protect the senior citizens and so forth that are out there doing this? What this bill does, if you read it, and I hear the opponents, what they're saying, I don't think they've read it, uh, uh, if, because they're, they're making claims that aren't related specifically to this, but it provides the limited government that our founders put in the Constitution. Our founders said states have the right to make gold and silver legal tender. They didn't say private businesses have the right to do that. And if you're gonna make gold and silver a legal tender, if you're gonna make it functional currency, there needs to be some guidelines.

462. 1:56:23

     There needs to be some rules. There needs to be some oversight to make sure, uh, trusting citizens that think they're doing the right thing with their hard-earned money aren't taken advantage of. There's been private companies out there in this business, some with transactional cards, uh, that have literally taken people's money. Uh, they said, "Silver and gold, you're gonna buy it, you're gonna have it. This is what it's about." This is not a state partnership. This is the state putting the guide rails in place so we can make gold functional currency again, so that if I go to... Let's say I wanna go spend it at Chick-fil-A, where Senator Harbin had that, had that cup there.

463. 1:56:54

     Uh, they would have the option, they could take gold, or they could take, uh, currency. Right now, the apps make it, uh, converts the gold to currency and pays them on spot at that time. But they might say, "You know what? I'd see advantages to having gold as well. I'm gonna go ahead and take your gold." This is where the state needs to get involved with this, make sure the guide rails are there, make sure players are, are, are, are, are overseen in a limited government way, and set up the financial raise for competition. What you're hearing from, uh, the Sound Money Defense League, which is AKA Money and Metals, which I would guess John from, uh, from Idaho, who also made a lot of false claims not related to the bill, is they don't want any competition.

464. 1:57:31

     Uh, what we want is we want free market rails so competition come in. They can make this so that anybody can participate. This is about economic justice. If I wanna be able to buy gold today, and I wanna buy a one-ounce coin like Marty had there, it's $5,000. Well, if I'm a hardworking Georgian, uh, I can't afford to buy a $5,000 coin. I wanna be able to buy $5 of gold a month, $50 of gold a month, $100 of gold a month. Uh, but if my card breaks down and I gotta get to work, I wanna know that I can easily spend that and transact with it. This is what you guys are, are enabling with this bill.

465. 1:58:03

     I strongly support this bill. I will tell you, in Texas, uh, we saw 1.7 million people vote to say they want this ability to make gold and silver transactional. Uh, we're seeing a movement across America. That's why you have these bills in all these states. I'm seeing press releases from Money Metals and the Sound Money Defense League, uh, which are completely distorting the truth out there, and we're seeing robo, uh, uh, letters coming in saying this is a g- government boondoggle and so forth, but it's not based on fact. If you read those letters, you can see they're manipulating, and if I got that as a Georgian, I'd be very concerned and say, "Oh, I can't have this." But spend some time, look at what the bill says, make sure the guide rails are there.

466. 1:58:40

     Uh, and I will tell you that as you get rid of the friction, uh, as you make it easy to spend, and there is oversight to that, uh, there, this, this Gresham's Law that, uh, JP Cortez talked about, it, it, it goes away. People do want the ability to spend that if, if they need to. This is an opportunity as a hedge against inflation. It's a st- a store, stable store of value. Uh, this is, again, a, a movement happening across the country. Uh, I'll even say that, uh, you know, this, this, this group, Money Metals and, uh, uh, Sound Money Defense League, uh, they talk about governors vetoing and so forth.

467. 1:59:12

     In Idaho, a bill that they were backing and supporting, the Idaho statesman said that the government, part of the reason they did this was over fiduciary and political concerns of what they were trying to manipulate. We need government oversight. I heard gold backs out there. I like gold backs. I think they should have an opportunity, but there's 100% markup on those gold backs. And they have vending machines. I heard about vending machines and people buying, um, uh, you know, crypto on vending machines where there's no oversight. Uh, I've seen some vending machines pop out there. It says, hey, it's 99.5% pure gold, uh, but it doesn't say that it's only one 10,000th of an ounce.

468. 1:59:43

     It's not clear that I'm, I'm paying 100% markup on something like that. This is where we need the rails of Georgia, the limited government role you have, to make sure that as gold and silver is legal tender, uh, it is functional currency. And I will finally close it with this. Nobody has made claims that if you do this, uh, the federal government is gonna do it. Uh, but I will say this, that our organization has, has reached out. We've talked to the highest levels of the, of, of, uh, of the executive level on this. Uh, and i- is it feasible that, uh, capital gains goes away as this is looked at functional currency?

469. 2:00:17

     Yeah. Is that done yet? Absolutely not. Uh, are we saying that's gonna be the case? No. Uh, are we making, telling... They're, they're saying that we're promoting tax evasion. Understand these are discussions of what can happen out there. There is a role for Georgia in a very limited way, and I'm not a big government guy. But if you care about the consumer, if you care about economic justice, if you care about everybody having a chance to have something that's a hard asset that keeps up with inflation, including those hardworking Georgians out there, I think you care about making sure there's limited guide rails so that the free market can compete.

470. 2:00:50

     And I would say, uh, Money Metals, what are you afraid of? Why don't you develop and compete in the new system that's gonna make this happen? As this grows and people get, more and more people get gold and silver, uh, they are going to say, "I want some hard assets. I wanna be able to buy some silver coins." This is gonna grow the entire industry. This is a big idea. It's about economic liberty, and it's about economic justice, and I encourage you to support S- Senate Bill 424. Thank you.

471. 2:01:15

     Thank you, Mr. Carden. Thank you. Okay, guys, in the essence of time, I know, Senator, you had a question you wanna ask. Oh, wait. So Tuesday. Uh, Treasurer McCord, make sure we, we, we wanna reiterate where we all are sitting here. The State of Georgia would not be liable or cause anybody else to be liable for this bill if this bill passes. I just wanna make sure.

472. 2:01:37

     That's my understanding of reading this bill.

473. 2:01:38

     Oh, let me get you back on. Go ahead.

474. 2:01:40

     Yes, that's my understanding of reading this bill, is that what we would do, the state, uh, would explore, uh, a way to actually, uh, carry out the responsibilities that this bill, uh, gives, and that, that, that would be the essence of this. Now, the board itself would actually establish the policies and the guidelines and determine how-

475. 2:01:59

     But that would be a board of what, what Senator Harbison earlier, the, the-

476. 2:02:03

     That's it

477. 2:02:03

     ... non-compensated board, et cetera.

478. 2:02:05

     Yes, sir.

479. 2:02:06

     Okay. Senator Harbison, it is my plan to try to have us a, uh, a, a vote on this on Tuesday two, 2:00. That's our plan. Obviously, if we get on the floor, we get pushed back. You know, you know how that works. Um, anything else? M- Mike, you wanna bring your questions next week then? Yeah. Guys, so thank y'all for sticking with us. We are adjourned.

480. 2:02:25

     Thank you, Mr. Chairman.

481. 2:02:25

     Thanks.