2017 Georgia Code
Title 16 - Crimes and Offenses
Chapter 17 - Payday Lending
§ 16-17-2. Prohibition on loans of less than $3,000.00; exceptions; penalty for violations

Universal Citation: GA Code § 16-17-2 (2017)
  • (a) It shall be unlawful for any person to engage in any business, in whatever form transacted, including, but not limited to, by mail, electronic means, the Internet, or telephonic means, which consists in whole or in part of making, offering, arranging, or acting as an agent in the making of loans of $3,000.00 or less unless:
    • (1) Such person is engaging in financial transactions permitted pursuant to:
      • (A) The laws regulating financial institutions as defined under Chapter 1 of Title 7, the "Financial Institutions Code of Georgia";
      • (B) The laws regulating state and federally chartered credit unions;
      • (C) Article 13 of Chapter 1 of Title 7, relating to Georgia residential mortgages;
      • (D) Chapter 3 of Title 7, the "Georgia Industrial Loan Act";
      • (E) Chapter 4 of Title 7, relating to interest and usury;
      • (F) Chapter 5 of Title 7, "The Credit Card and Credit Card Bank Act," including financial institutions and their assignees who are not operating in violation of said chapter; or
      • (G) Paragraph (2) of subsection (a) of Code Section 7-4-2 in which the simple interest rate is not greater than 16 percent per annum;
    • (2) Such loans are lawful under the terms of:
      • (A) Article 1 of Chapter 1 of Title 10, "The Retail Installment and Home Solicitation Sales Act";
      • (B) Article 2 of Chapter 1 of Title 10, the "Motor Vehicle Sales Finance Act"; or
      • (C) Part 5 of Article 3 of Chapter 12 of Title 44, relating to pawnbrokers;
    • (3) Subject to the provisions of paragraph (4) of subsection (b) of this Code section, such person is a bank or thrift chartered under the laws of the United States, a bank chartered under the laws of another state and insured by the Federal Deposit Insurance Corporation, or a credit card bank and is not operating in violation of the federal and state laws applicable to its charter; or
    • (4) Such loan is made as a tax refund anticipation loan. In order to be exempt under this paragraph the tax refund anticipation loan must be issued using a borrower's filed tax return and the loan cannot be for more than the amount of the borrower's anticipated tax refund. Tax returns that are prepared but not filed with the proper government agency will not qualify for a loan exemption under this paragraph.
  • (b) Subject to the exceptions in subsection (a) of this Code section, this Code section shall apply with respect to all transactions in which funds are advanced to be repaid at a later date, notwithstanding the fact that the transaction contains one or more other elements. Without limiting the generality of the foregoing, the advance of funds to be repaid at a later date shall be subject to this Code section, notwithstanding the fact that the transaction also involves:
    • (1) The cashing or deferred presentment of a check or other instrument;
    • (2) The selling or providing of an item, service, or commodity incidental to the advance of funds;
    • (3) Any other element introduced to disguise the true nature of the transaction as an extension of credit; or
    • (4) Any arrangement by which a de facto lender purports to act as the agent for an exempt entity. A purported agent shall be considered a de facto lender if the entire circumstances of the transaction show that the purported agent holds, acquires, or maintains a predominant economic interest in the revenues generated by the loan.
  • (c)
    • (1) A payday lender shall not include in any loan contract made with a resident of this state any provision by which the laws of a state other than Georgia shall govern the terms and enforcement of the contract, nor shall the loan contract designate a court for the resolution of disputes concerning the contract other than a court of competent jurisdiction in and for the county in which the borrower resides or the loan office is located.
    • (2) An arbitration clause in a payday loan contract shall not be enforceable if the contract is unconscionable. In determining whether the contract is unconscionable, the court shall consider the circumstances of the transaction as a whole, including but not limited to:
      • (A) The relative bargaining power of the parties;
      • (B) Whether arbitration would be prohibitively expensive to the borrower in view of the amounts in controversy;
      • (C) Whether the contract restricts or excludes damages or remedies that would be available to the borrower in court, including the right to participate in a class action;
      • (D) Whether the arbitration would take place outside the county in which the loan office is located or any other place that would be unduly inconvenient or expensive in view of the amounts in controversy; and
      • (E) Any other circumstance that might render the contract oppressive.
  • (d) Any person who violates subsection (a) or (b) of this Code section shall be guilty of a misdemeanor of a high and aggravated nature and upon conviction thereof shall be punished by imprisonment for not more than one year or by a fine not to exceed $5,000.00 or both. Each loan transaction shall be deemed a separate violation of this Code section. Any person who aids or abets such a violation, including any arbiter or arbitration company, shall likewise be guilty of a misdemeanor of a high and aggravated nature and shall be punished as set forth in this subsection. If a person has been convicted of violations of subsection (a) or (b) of this Code section on three prior occasions, then all subsequent convictions shall be considered felonies punishable by a fine of $10,000.00 or five years' imprisonment or both.
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