Payday Loan Laws

Georgia Payday Loan Laws & LOegislation State Information

Legal Status: Prohibited

Industrial loan act applies. Ga. Code Ann.§ 7-3-14. Ga. Comp. R. & Regs. r. 80 § 3-1.02(7) and O. C.G.A. Section 16-17-1 et seq.

Small Loan Rate Cap
16% per year (10% per year discounted plus fees); 60% per year criminal usury cap

Regulator: Georgia Office of the Commissioner of Insurance
Address: Industrial Loan Division, Two Martin Luther King, Jr. Drive West Tower, Suite 704 Atlanta GA 30334
Phone: (404) 656-2070
Fax: (404) 657-8542
Regulatory Contact: Frank Ogletree Director
Regulator’s Website

Georgia Payday Loan Laws & Legislation

In May 2004 the Georgia State Legislator passed a statute which imposed stiff penalties for payday loan lending by non-banks and in-state banks. It also capped small consumer loans at Georgia's small loan usury rate of 60%. Payday loan lenders pulled out of the state of Georgia shortly after.

Georgia payday loan consumers by the tens of thousands continue to get access to payday loans via the Internet and payday loan call centers based in other states and offshore.

Georgia Payday loan laws. Georgia Payday loan legislation. Georgia does not have specific payday loan safe-harbor legislation. At this time, the best approach is to offer payday loans via the Internet, one of the alternative methods (cash rebates, ISP model, etc.) discussed in our training materials, or the newest model, the CSO (Credit Services Organization) approach.

Payday Loan Company Advance America Reaches Settlement in Georgia


Advance America announced that it has settled a class action lawsuit in Georgia that resolves all claims against the Company in connection with originating, marketing, or servicing any payday loan in that state. The settlement, which does not involve any finding of wrongdoing, requires final approval from the State Court of Cobb County, Georgia. The Company had previously suspended operations in Georgia during 2004.

The settlement will require Advance America to make a minimum payment of approximately $2.0 million from which

  • (1) a settlement pool will be established to pay claims; and
  • (2) attorney fees and other costs related to the litigation and settlement administration will be paid. The value of individual claims will vary between $30 and $90. If claims made plus costs exceed $2.0 million, then the Company will be required to pay additional funds into the settlement pool up to an aggregate cap of $3.7 million. If claims made plus applicable costs are less than the minimum payment, the court will distribute the balance of the minimum payment to a charitable organization of the court's choosing. If claims made plus costs are greater than the cap, then claims will be prorated so as not to exceed the cap. The Company has reserved approximately $2.0 million for this settlement, which will result in a charge against earnings in the fourth quarter of 2008.

    Commenting on the settlement, the Advance America's Vice President of Legal and Regulatory Affairs, Tom Newell, said, "Advance America possesses a strong culture of legal and regulatory compliance and the Company will continue to aggressively defend its products and services against these types of claims. However, a settlement like this one makes good business sense and brings value to our stakeholders by assuring certainty of outcome and eliminating continuing legal costs in a geographic market where we no longer conduct business. We are pleased to have reached a favorable result."

    Consumer-advocate groups attack new payday-lending bill
    02/20/2007 -

    ATLANTA — Bringing payday lending back just three years after state lawmakers banned the practice would let an unscrupulous industry trap cash-strapped Georgians in a cycle of debt, consumer advocates said Monday.

    But a representative of the industry said a bill now before the House would impose such strict regulations on payday lenders that it bears no comparison to the way short-term loans were handled in Georgia before the 2004 ban.

    A House subcommittee heard testimony Monday on legislation that would allow consumers to borrow up to $750 or 25 percent of their monthly gross income for up to 31 days. Interest would be $15 for every $100 borrowed.

    At those rates, a payday loan would be less expensive for small borrowers than bouncing a check, missing a credit card payment or, worse, failing to pay an electric bill and having their power cut off, said Jabo Covert, vice president of government relations for Check into Cash, a payday lender based in Cleveland, Tenn.

    Covert said most of his company’s customers earn $25,000 to $50,000 a year but find themselves temporarily short of money. "It’s Middle America, the school teacher, state employee or highway patrolman," he said. "They’re making smart decisions when they need short term a small amount of cash."

    But Kathy Floyd, a lobbyist with the state chapter of AARP, said payday lenders make their money by luring the same customers repeatedly. She said studies show that the vast majority are forced to take out multiple loans during the course of a year because they can’t pay back the original loan on time. "(Payday lenders) want to hold that check and keep getting that payment every pay period,’’ she said. “We say you can’t tame a wolf."

    Allison Wall, executive director of Georgia Watch, a consumer watchdog group, said a national study found that Georgians have saved $150 million a year in “abusive fees’’ since the General Assembly banned payday lending in 2004.

    The Legislature acted that year as part of an effort to protect the state’s military bases from a round of base closings. Military officials had suggested that shutting down the payday-loan industry would show the Pentagon that Georgia cares about its service members.

    Since then, Congress has acted to cap interest rates on loans to members of the military at 36 percent. "If payday lending is toxic for the military, it’s toxic for all Georgians," Wall said.

    But Covert said many of the abuses that Wall and others accuse payday lenders of perpetrating couldn’t occur under the House bill. He said the measure would prohibit borrowers who can’t pay back an initial loan from rolling it over. Also, those who can’t pay up when a loan is due would be allowed to repay the money over two months, he said.

    December 2005

    The battle between FISCA (Financial Service Centers of America), one of two payday loan national organizations and GILA (Georgia Industrial Loan Assoc.) a trade group representing the consumer finance companies of Georgia, continues. Literally millions of dollars are being spent by GILA in an attempt to prevent payday loans from being offered to residents of Georgia at "brick-n-mortars (store fronts). The members of GILA are terrified of the negative impact payday loans would have on their businesses.

    Apparently GILA is unaware of the ability of residents of Georgia to visit a payday loan Internet site or call an operator of an offshore or out-of-state call center to secure a payday loan.

    Consumers in all states demand the payday loan product. No government or business entity can squelch the demand. Enlightened persons will embrace the product, legalize it, pass laws to license and control it, thus generating protection for the consumer, revenue for the state, and opportunity for the entrepreneurs of Georgia.

    It's only a matter of time...

    For a thorough discussion of the payday loan industry and access to our payday loan training materials, we recommend you proceed to Payday and Paycheck

    DECEMBER 30, 2005:
    Payday Advance Rate Exportation Programs

    Payday Lending NewsEarlier today FiSCA (Financial Service Centers of America) learned that the Eleventh Circuit of Appeals decided to grant rehearing en banc (12 or more judges) in the appeal of the Barkwest et als. vs. Baker et als. matter. You may recall that this case turns on whether federal banking statutes preempt Georgia’s 2004 anti-rate exportation statute. That law imposed draconian criminal penalties on PDA service providers in Georgia unless the partnering rate exporting bank retained the predominant economic interest in the loan. The practical effect of this statute was to shut down nearly all PDA rate exportation programs in Georgia, which is a non-safe harbor state.

    When the PDA industry challenged the statute in 2004, the federal district court upheld the law. In a subsequent appeal to the Eleventh Circuit court of appeals, the industry also lost, by a 2-1 vote of the three judge panel. That decision was filed on June 10, 2005.

    The industry then petitioned for “rehearing en banc” before all the members of the Eleventh Circuit court of appeals. These applications are granted very rarely. They are “forlorn hopes.” However, yesterday the circuit court granted the rehearing en banc. We learned of that decision this morning.

    The order granting the rehearing automatically vacates the prior 2-1 decision against the PDA industry’s position. It is now a whole new ballgame with the appeal getting a fresh look by the whole circuit court. No schedule for submitting briefs or date for oral argument has been established yet. FiSCA’s staff will keep you apprised of any further developments.

    This decision is immensely important. By vacating the prior ruling of the three judge panel, the circuit court has undermined, if not pulverized, the positions of many so-called consumer activists who have called for the adoption throughout the country of Georgia style anti-rate exportation laws. Hostile regulators and legislators across this continent no longer can rely on the Eleventh Circuit’s prior 2-1 ruling upholding Georgia’s statute. That decision no longer exists.

    There is no guarantee the industry will fare better in an en banc ruling from the Eleventh Circuit. However, granting this sort of “full court” review is so rare (because it involves the expenditure of a great deal of judicial resources) that it at least means a majority of the full circuit court of appeals believes the PDA industry has mustered quite powerful arguments against the validity of Georgia’s law. Parties that seek and obtain full circuit court review generally do much better than they did in the initial decision of the three judge panel.

    Anyone who wants more detailed information on this subject should check back here or join the free newsletter offer at: Payday And Paycheck