Georgia Payday Loan Laws and Legislation

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Payday loans are cash advances for a borrower given again his next paycheck. These loans are characterized by high interest rates and therefore the Consumer's Union finds them very unfavorable for any family's budget. They are very much capable of making a borrower stay in debts forever.

In the state of Georgia for this reason payday lending is prohibited. Moreover, there are always ways of how to evade the law, more restrictions were introduced recently. The Georgia Code now contains Chapter 17 (Payday Lending) Title 16 (Crimes and Offenses) where all the issues of payday lending operation are covered, including criminal and civil penalties.

Payday loans go under a title of small loans, generally; the minimal amount is $3,000, according to the 16-17-2 of the Georgia Code. Certain businesses and companies have a legal right to give such loans but in terms that all their operations are regulated by the Credit Card and Credit Card Banking Act. Moreover, the above mentioned businesses should have residential mortgage statues. Or rather, they should be a bank or some licensed state or federally chartered credit union. However, even such strict requirements do not exclude the obligation of these institutions not to exceed the 16% APR. Section 7-4-2 of the Georgia State Code states it quire clearly.

Section 16-17-1 of the Georgia Code, however, does not forbid the usage of interstate payday lending services. It is absolutely legal for Georgia residents to get loans in other states. They can be pawnshop loans, car title loans, as well as retail installment plans. Generally, such kind of loans require some sort of a collateral from a borrower that is pledged against the loan. Refund anticipation loans do not go into the category of payday ones and they are given in the amounts smaller or equal to the tax refund that a filer is expecting to get.

Any payday lender can be punished for an unlawful transaction by the Attorney General of Georgia or any district attorney. It is written in the Section 16-17-4(a) and the penalty can be three times the amount of any interest charged in this transaction. A civilly liable payday lender will have to give half of the sum to the attorney and half of it to the state. Besides, any payday loans issued illegally will be charged a 50% rate plus the penalties. Moreover, according to the Section 16-17-7 of the Georgia Code, interstate financial corporation caught at payday lending operation in Georgia will be immediately punished for it and its license suspended.

Moreover, Section 16-17-2 of the Georgia Code presupposes that any district attorney or the Attorney General has got a right to hold any person who issues a payday loan in the state criminally liable. Not only a person is charged with aggravated misdemeanor but also he is likely to be jailed for a period of about a year. Plus, a fine of up to $5,000 per violation is charged. One payday operation equals one offence according to the state law of Georgia. A fife-year imprisonment and a fine of $10,000 are awaiting a person who has previously been prosecuted for payday lending operations thrice.

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