TITLE 7 – BANKING AND FINANCE
CHAPTER 3 – Installment Loans
ARTICLE 1 – General Provisions
7-3-1. Short title.
This chapter shall be known and may be cited as the “Georgia Installment Loan Act.”
7-3-2. Transfer to Department of Banking and Finance.
(a) The powers, functions, and duties of the office of the Commissioner of Insurance relative to this chapter are transferred to the Department of Banking and Finance effective July 1, 2020. All action taken by the office of the Commissioner of Insurance prior to that date shall be considered valid, and the department shall, as of July 1, 2020, assume all ongoing and continuing obligations pursuant to this chapter. All personnel, supplies, records, materials, furniture, furnishings, books, equipment, motor vehicles, and services of the office of the Commissioner of Insurance utilized pursuant to the authority granted under this chapter shall be transferred to the department on July 1, 2020. Any action or investigation pending pursuant to this chapter shall remain in full force and effect and any powers relating to such action or investigation shall be transferred to the department on July 1, 2020.
(b) All rules, orders, and actions adopted by the Commissioner of Insurance pursuant to this chapter shall remain in full force and effect as rules, orders, and actions of the department unless amended, repealed, or superseded by rule, order, or action of the department.
(c) All property, real and personal, funds, accounts receivable, contracts, liabilities, and obligations of the office of the Commissioner of Insurance for effectuating this chapter shall become the property, funds, accounts receivable, contracts, liabilities, and obligations of the department on July 1, 2020. Appropriations to the Commissioner of Insurance for functions transferred to the department pursuant to this Code section shall be transferred as provided in Code Section 45-12-90.
7-3-3. Definitions.
As used in this chapter, the term:
(1) “Control” or “controlling” means the direct or indirect possession of power to direct or cause the direction of management and policies of a person.
(2) “Covered employee” means any employee of a licensee engaged in any function related to making installment loans or servicing installment loans made by others, excluding loans made by affiliated entities.
(3) “Department” means the Department of Banking and Finance.
(4) “Executive officer” means an individual who performs significant managerial, supervisory, or policy-making functions on behalf of a person, including, but not limited to, the vice presidents, chief executive officer, president, chief financial officer, chief operating officer, secretary, and treasurer.
(5) “Individual” means a natural person.
(6) “Installment lender” or “lender” means any person that advertises, solicits, offers, or makes installment loans or services installment loans made by others, excluding loans made by affiliated entities.
(7) “Installment loan” or “loan” means a contract or agreement to make a loan to an individual in an amount of $3,000.00 or less, including the renewal or refinancing of any such loan.
(8) “License” means an authorization issued by the department or required to be obtained under this chapter to engage in the business of making installment loans.
(9) “Licensee” means a person to whom a license under this chapter has been issued.
(10) “Nationwide Multistate Licensing System and Registry” means a licensing system developed and maintained by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators for the licensing and registration of certain persons engaged in nondepository activities.
(11) “Owner” means a person that:
(A) Owns, directly or indirectly, 10 percent or more interest in a corporation or any other form of business organization;
(B) Owns, directly or indirectly, 10 percent or more of the voting shares of any corporation or any other form of business organization; or
(C) Exerts control, directly or indirectly, over a corporation or any other form of business organization, regardless of whether such person owns or controls such interest through one or more individuals or one or more proxies, powers of attorney, nominees, corporations, associations, limited liability companies, partnerships, trusts, joint stock companies, other entities or devices, or any combination thereof.
(12) “Person” means any individual, sole proprietorship, corporation, limited liability company, partnership, trust, or any other group of individuals, however organized.
(13) “Unique identifier” means a number or other identifier assigned by protocols established by the Nationwide Multistate Licensing System and Registry.
7-3-4. Licensing requirement; exemptions.
(a) No person shall engage in the business of making installment loans or acting as an installment lender in this state unless such person is licensed in accordance with this chapter or exempt from licensure as provided in subsection (b) of this Code section. No person within the operation of this chapter shall charge, contract for, or receive directly or indirectly on or in connection with any loan, any interest, charge, fee, compensation, or consideration which is greater than the rates for same provided in this chapter.
(b) This chapter shall not apply to:
(1) Businesses chartered or licensed under the authority of any law of this state or of the United States as banks, trust companies, savings and loan associations, savings banks, or credit unions or to the transactions of such businesses;
(2) Banks or credit unions chartered under the authority of any state which have deposits that are federally insured or to the transactions of such businesses;
(3) Pawnbrokers, as defined in Code Section 44-12-130, or to the transactions of pawnbrokers;
(4) The University System of Georgia or its educational units, private colleges and universities in this state and associations thereof, or student loan transactions of such educational entities;
(5) An individual employed by a licensee or any person exempted from the licensing requirements of this chapter when acting within the scope of employment and under the supervision of the licensee or exempted person as an employee and not as an independent contractor;
(6) Any agency, division, or instrumentality of the federal government of the United States of America; the government of the State of Georgia or the government of any other state; or any county or municipal government in the State of Georgia; and the transactions of all such governmental entities;
(7) Retail installment transactions engaged in by retail installment sellers, as those terms are defined in Code Section 10-1-31;
(8) Retail installment transactions engaged in by retail sellers, as those terms are defined in Code Section 10-1-2; or
(9) Transactions in which a lender offers a consumer a line of credit of more than $3,000.00 but the consumer utilizes $3,000.00 or less of such line of credit so long as there are no restrictions in place that would limit the consumer’s ability to utilize more than $3,000.00 of the line of credit at any one time.
7-3-5. [Repealed] Applicability of chapter — Transactions by which money is paid others.
7-3-6. Redesignated.
7-3-7 through 7-3-9. [Repealed]
ARTICLE 2 – Operating Procedures
7-3-10. False advertising prohibited.
No person shall advertise, display, distribute, or broadcast in any manner whatsoever any false, misleading, or deceptive statement or representation with regard to the rates, terms, or conditions for loans subject to this chapter.
7-3-11. Maximum loan amount, period, and charges; deferments.
Every authorized licensee location under this chapter may lend any sum of money not to exceed $3,000.00, with the term for any individual loan not to exceed a period of 36 months and 15 days or less and may charge, contract for, collect, and receive interest and fees and may require the fulfillment of conditions on such loans as provided in this Code section:
(1) Interest. A licensee may charge, contract for, receive, and collect interest at a rate not to exceed 10 percent per annum of the face amount of the contract, whether repayable in one single payment or repayable in monthly or other periodic installments. On loan contracts repayable in 18 months or less, the interest may be discounted in advance; and, on contracts repayable over a greater period, the interest shall be added to the principal amount of the loan. On all contracts, interest or discount shall be computed proportionately on equal calendar months;
(2) Loan fee. In addition thereto, a licensee may charge, contract for, receive, or collect at the time the loan is made a fee in an amount not greater than 8 percent of the first $600.00 of the face amount of the contract plus 4 percent of the excess; provided, however, that such fee shall not be charged or collected on that part of a loan which is used to pay or apply on a prior loan or installment of a prior loan from the same licensee to the same borrower made within the immediately preceding six-month period; provided, however, if the loan balance is $300.00 or less, the said period shall be two months, not six months; provided, further, that nothing contained in this paragraph and paragraph (1) of this Code section shall be construed to permit charges, interest, or fees of any nature whatsoever in the aggregate in excess of the charges, interest, and fees which would constitute a violation of Code Section 7-4-18 and this chapter shall in no way affect Code Section 7-4-18. If a borrower prepays his or her entire loan to a licensee and within the following 15 days obtains a new loan from that licensee and if this is done within the six-month period or the two-month period above described, as may be applicable, the fee may be charged only on the excess by which the face amount of the new contract exceeds the amount which the borrower repaid to that licensee within the said 15 day period;
(3) Insurance premiums. A licensee may charge and collect from the borrower premiums actually paid or to be paid for insurance obtained for the borrower. A licensee may accept as security on any loan or advance made under this chapter any one or any combination of the following:
(A) Insurance on tangible property against substantial risks or loss;
(B) Reasonable insurance on the life and health of the principal party; or
(C) Reasonable insurance against accident of the principal party;
provided, however, that any such insurance shall be reasonably related to the type and value of the property insured and to the amount and term of the loan and shall be obtained from an insurance company authorized to conduct such business in the State of Georgia and at rates lawfully filed by such company with the Commissioner of Insurance and through a regular insurance agent licensed by the Commissioner of Insurance; provided, further, that the amount of life, health, or accident insurance required as security for loans made under this chapter shall not exceed the amount of the loan, including charges, to be secured; and the premiums on such insurance required of the principal party obligated shall be limited to premiums reasonably based upon reliable actuarial experience and sound insurance practice; and the Commissioner of Insurance is authorized and directed to promulgate rules and regulations to effectuate this provision related to insurance obtained by the borrower in accordance with the spirit and intent thereof. It shall be the duty of the Commissioner of Insurance to determine and promulgate by rule and regulation the rates and maximum premiums permissible to be charged for life, health, and accident insurance required as security for a loan made under this chapter and to make regulations incident thereto necessary to effectuate the same; such premiums, when thus established and as changed from time to time in the manner aforesaid, shall be the maximum effective and permissible charges under this paragraph. Premiums paid or to be paid pursuant to the authority of this paragraph shall not constitute interest. The insurance company in turn may pay to the party writing the insurance policy sold in connection with the loan a fee or commission in an amount which is reasonable in relationship to the transaction and in no event in excess of the amount of fee or commission customarily paid within the industry where comparable insurance is sold in a transaction not involving credit, as determined by the Commissioner of Insurance;
(4) Late charge. A licensee may charge and collect from the borrower a late or delinquent charge of $10.00 or an amount equal to 5¢ for each $1.00 of any installment which is not paid within five days from the date such payment is due, whichever is greater, provided that this late or delinquent charge shall not be collected more than once for the same default; and
(5) Maintenance charge. In addition thereto, a licensee may contract for, charge, receive, and collect a maintenance charge of $3.00 for each month in the term of the loan contract on each loan made, whether repayable in one single payment or repayable in weekly, monthly, or other periodic installments. Refunds of unearned maintenance charges shall be made in accordance with the method prescribed in Code Section 7-3-14, and such maintenance charges will be subject to paragraph (4) of this Code section. Nothing contained in Code Section 7-4-18, as now or hereafter amended, shall be construed to apply to this paragraph; and loans made in conformity with this paragraph shall in no way constitute a violation of Code Section 7-4-18, as now or hereafter amended.
(6) Deferment.
(A) Hardship deferment: Nothing in this article shall be construed as prohibiting any licensee and borrower from contracting to defer periodic payments consisting of principal payments, interest, fees, premiums, and charges provided that no additional interest, fees, premiums, or charges are incurred or otherwise imposed as a result of such deferment. Nothing in subparagraph (B) of this paragraph shall be construed as limiting the duration of a hardship deferment or the number of hardship deferments that can be granted during a loan term.
(B) Convenience deferment: A licensee and a borrower may, at any time, contract to defer all of or part of one or more unpaid installments, and the licensee may make and collect a charge therefor, subject to the following provisions:
(i) A convenience deferment may be for any duration agreed upon by the licensee and the borrower but shall not exceed four months. A licensee may agree to multiple convenience deferments during the loan term provided that the total duration of all convenience deferments does not exceed four months;
(ii) A licensee may charge a fee for the deferment. The deferment fee shall not exceed an amount equal to the result of applying the interest rate provided in the original loan agreement to the amount deferred for the deferment period. The deferment fee shall be calculated without regard to the difference in lengths of months by counting each day of the deferment period as one-thirtieth of a month. The fee may be collected at the time it is assessed or at any later date as agreed upon by the licensee and the borrower; provided, however, that the deferment fee is earned pro rata during the deferment period and is fully earned on the last day of the deferment period;
(iii) A licensee shall not charge any fees, premiums, interest, or charges other than the deferment fee for the duration of the deferment period and such fees, premiums, interest, or charges other than the deferment fee shall not accrue during the deferment period;
(iv) If a licensee renews or refinances an installment loan within three months after the end of the convenience deferment period, the licensee must refund or credit the entire convenience deferment fee to the borrower;
(v) If a licensee enters into a convenience deferment agreement with a borrower and the licensee enters into a hardship deferment agreement with the borrower within three months of the end of the convenience deferment period, the licensee must refund or credit the entire convenience deferment fee to the borrower; and
(vi) If a loan is prepaid during a deferment period, the licensee shall refund or credit to the borrower any unearned portion of the deferment fee as calculated pursuant to division (ii) of this subparagraph in addition to any other refund or credit due to the borrower for prepayment.
(C) Any deferment agreement shall be evidenced in writing and shall include:
(i) The amount or amounts deferred;
(ii) The length of the deferment period, including the due date for the borrower’s next payment;
(iii) The amount of the deferment fee, if applicable; and
(iv) Where any credit insurance or ancillary product with a specific term was purchased by the borrower, the following disclosure to the borrower: “You have purchased a credit insurance product(s) and/or [identify the specific ancillary product] in connection with this loan. The deferment agreed to herein will not extend the term of coverage of those products.”
(D) Whenever a licensee enters into a deferment agreement with the borrower hereunder, the deferment shall not be considered to be an improper extension of the loan term, and the original loan term shall be extended by the period deferred. For purposes of granting a deferment, licensees may extend the term of the loan beyond the maximum term limit of 36 months and 15 days.
(E) A licensee shall not offer or require a borrower to obtain credit insurance or any other ancillary product for the extension of the original loan term due to a deferment.
(F) After the conclusion of a deferment period, the borrower shall resume payments in the same amounts and intervals as set forth in the original loan agreement. Licensees shall not require borrowers to make a lump sum repayment.
(G) Licensees shall maintain a monthly journal of loans that were deferred by identifying the specific borrower that entered into the deferment agreement, the type of deferment granted, and the status of such deferment.
7-3-12. Limitation on further charges.
No licensee shall charge, contract for, or receive any other or further amount in connection with any loans authorized by this chapter in addition to those provided in Code Section 7-3-11, except the actual lawful fees paid to a public official or agency of the state for filing, recording, or, on loans over $100.00, the amount of the lawful premiums, no greater than such fees, actually paid for insurance against the risk of nonrecording or releasing any instrument securing the loan; the court costs and attorney fees authorized by law incurred in the collection of any contract in default; and the actual and reasonable expenses of repossessing, storing, and selling any collateral pledged as security for any contract in default. No licensee shall divide into separate parts any contract for the purpose or with the effect of obtaining charges in excess of those authorized by this chapter.
7-3-13. Licensee’s compliance when purchasing notes and other documents.
If a licensee purchases or receives by transfer or assignment any note, bill of sale to secure debt, title retention contract, conditional sales contract, or any other similar contract that would otherwise be governed by this chapter, the licensee shall comply with the provisions of this chapter when making a loan for the purpose of paying off all or any part of such instrument.
7-3-14. Payment before maturity; refund of prepaid interest; continuing insurance.
Notwithstanding the provisions of any contract to the contrary, a borrower may at any time prepay all or any part of the unpaid balance to become payable under any installment loan. If the borrower prepays the loan in full before maturity, the licensee shall refund to the borrower a portion of the prepaid interest, calculated in complete even months (odd days omitted), as follows: the amount of the refund shall represent at least as great a proportion of the total interest as the sum of the periodical time balance after the date of prepayment bears to the sum of all periodical time balances under the schedule of payments in the original contract. Where the amount of the refund due to anticipation of payment is less than $1.00, no refund need be made. If the borrower has been required to purchase insurance coverage other than insurance coverage in a blanket policy when the borrower has paid no acquisition cost, the borrower shall have the option to continue such insurance in force for the balance of the policy period, with all rights transferred to the borrower or his or her assigns, in which event no refund of insurance premiums shall be made.
7-3-15. Delivery of copy of contract or itemized statement; receipts.
In addition to any applicable disclosure requirements, at the time the installment loan is made, each licensee under this chapter shall deliver to the borrower or, if there are multiple borrowers, to one of the borrowers a copy of the loan contract or a written itemized statement in the English language showing in clear terms the date and amount of the loan, a schedule of the payments or a description thereof, the type of security for the loan, the licensee’s name, unique identifier, business address, the actual amount of cash advanced to or on behalf of the borrower, the amount of each class of insurance carried and the premiums paid thereon, and the amount of interest and fees. Each licensee shall give a receipt for every cash payment made.
7-3-16. Additional loan fees; interest; penalties.
(a) On and after July 1, 2022, in addition to all other fees, license fees, fines, or other charges now or hereafter levied or assessed, there is imposed on each loan made pursuant to this chapter a fee of 0.125 percent of the gross loan amount. Such per loan fee shall become due on the making of any such loan, including, but not limited to, the closing of a loan, the renewal or refinancing of a loan, or a modification of a loan which results in the execution of a new or amended loan agreement.
(b) Such per loan fee is levied and assessed against the person so licensed and shall be paid by such person and shall not be added in any manner as an additional fee or charge against the borrower. Such per loan fee shall be remitted to the department at the time and in the manner specified by rules and regulations of the department.
(c) In the event any person fails or refuses to remit the fees required by this Code section within the time prescribed, the fees shall bear interest at the rate of 1 percent per month. Interest shall begin to accrue from the date the fees are due until the date the fees are paid. For purposes of this Code section, any period of less than one month shall be considered to be one month.
(d) In the event any person fails or refuses to remit the per loan fees required by this Code section within the time prescribed, there shall be added to the fees a penalty equivalent to 25 percent of the fees due, but in no case shall the penalty so added be less than $5.00. In the event any person fraudulently remits the incorrect fees, there shall be added to the fees a penalty equivalent to 50 percent of the fees due, but in no case shall the penalty so added be less than $5.00.
(e) The 2022 revisions of Code Sections 7-3-16, 7-3-17, and 7-3-18 shall not affect the fees, taxes, and related interest and penalties owed pursuant to the earlier versions of such Code sections for any time prior to July 1, 2022.
(f) The department and its authorized examiners and employees shall have the right to inspect all records of any person licensed pursuant to this chapter, and the department is authorized to promulgate rules and regulations relative to the enforcement of this Code section.
7-3-17. [Reserved] Tax on interest — Payment; inspection of records; rules and regulations.
7-3-18. [Reserved] Tax on interest — Penalties for late or fraudulent tax payments.
7-3-19. Redesignated.
ARTICLE 3 – Licensing
7-3-20. Requirements for original and renewal licenses.
(a) Each applicant for an original or renewal license shall:
(1) Submit an application in writing, under oath, and in such form as the department may prescribe;
(2) Furnish to the Nationwide Multistate Licensing System and Registry the following information:
(A) The legal name and principal business address of the person applying for the license;
(B) The names and the residence and business addresses of each director, owner, and executive officer of the applicant;
(C) The address of each location where the applicant will engage in the business of making installment loans in this state;
(D) Any name, subject to approval by the department, under which the applicant will engage in the business of making installment loans in this state; and
(E) The name and address of the initial registered agent and registered office for service of process in this state;
(3) Submit such other data, financial statements, and pertinent information as the department may require with respect to the applicant or its directors, owners, or executive officers; and
(4) Pay a nonrefundable supervision fee established by rules and regulations of the department.
(b) A person applying for an original license shall pay a nonrefundable investigation fee established by rules and regulations of the department.
7-3-21. Bonds required.
(a) An applicant shall provide with its application a corporate surety bond issued by a bonding company or insurance company authorized to do business in this state and approved by the department.
(b) The bond shall:
(1) Be in a form satisfactory to the department;
(2) Be in the aggregate amount of $25,000.00 for the primary location to be operated by a licensee plus $5,000.00 for each additional location to be operated by such licensee, provided that no licensee shall be required to have a bond that exceeds a total amount of $100,000.00;
(3) Run to the State of Georgia for the benefit of the department or any claimant against a licensee arising out of the licensee’s business of making installment loans;
(4) Require a licensee to pay any and all money for the benefit of any person damaged by noncompliance of the licensee with this chapter, with rules, regulations, or orders issued by the department pursuant to this chapter, or with any condition of the bond; and
(5) Require a licensee to pay any and all money that may become due and owing to any creditor of or claimant against the licensee arising out of the licensee’s business of making installment loans.
(c) Payments due under the bond shall include money owed to the department for fees and related interest and penalties under Code Section 7-3-16 and fines or penalties for noncompliance of the licensee with this chapter or rules, regulations, or orders issued pursuant to this chapter.
(d) Claimants or creditors against the licensee may bring an action directly on the bond.
(e) In no event shall the aggregate liability of the surety exceed the principal sum of the face amount of the bond.
(f) In the event that the principal sum of the bond is reduced by one or more recoveries or payments thereon, a licensee shall:
(1) Provide a new or additional bond so that the total or aggregate principal sum of such bond or bonds equals the sum required under subsection (b) of this Code section; or
(2) Provide an endorsement duly executed by the corporate surety reinstating the bond to the required principal sum thereof.
(g) A bond shall not be canceled by either the licensee or the corporate surety except upon notice to the department electronically through the Nationwide Multistate Licensing System and Registry, and such cancellation shall be effective no sooner than 30 days after receipt by the department of such notice and only with respect to any breach of condition occurring after the effective date of such cancellation.
7-3-22. Investigations of applicants; license nontransferable; expiration and annual renewal.
(a) The department shall conduct an investigation of every applicant for licensure to determine the financial responsibility, experience, character, general fitness, and eligibility for licensure of such applicant. The department may issue the applicant a license if the department determines to its general satisfaction that:
(1) The applicant is financially sound and responsible and able to engage in the business of making installment loans in an honest, fair, and efficient manner and with the confidence and trust of the community;
(2) Approval of the application will promote the convenience and advantage of the community in which the applicant proposes to operate; and
(3) All conditions for licensure set forth in this chapter and in the rules and regulations of the department have been satisfied.
(b) No license shall be transferable or assignable.
(c) Each license shall expire on December 31 of each year, and application for renewal shall be made annually on or before December 1 of each year.
7-3-23. Authority of department; disclosure.
(a) The department is authorized to:
(1) Participate in the Nationwide Multistate Licensing System and Registry to facilitate the sharing of information and standardization of the licensing and application processes for persons subject to this chapter;
(2) Enter into operating agreements, information sharing agreements, interstate cooperative agreements, and other contracts necessary for the department’s participation in the Nationwide Multistate Licensing System and Registry;
(3) Disclose or cause to be disclosed without liability, via the Nationwide Multistate Licensing System and Registry, applicant and licensee information, including, but not limited to, violations of this chapter and enforcement actions, to facilitate regulatory oversight;
(4) Request that the Nationwide Multistate Licensing System and Registry adopt an appropriate privacy, data security, and security breach notification policy that is in full compliance with existing state and federal law; and
(5) Establish and adopt, by rule and regulation, requirements for participation by applicants and licensees in the Nationwide Multistate Licensing System and Registry, upon the department’s determination that each requirement is consistent with both the public interest and the purposes of this chapter.
(b) The department shall enact rules and regulations establishing a process whereby licensees may challenge information entered by the department into the Nationwide Multistate Licensing System and Registry.
(c) Regardless of its participation in the Nationwide Multistate Licensing System and Registry, the department shall retain full and exclusive authority over determinations of whether to grant, renew, suspend, or revoke licenses issued under this chapter. Nothing in this Code section shall be construed to reduce or otherwise limit such authority.
(d) Information disclosed through the Nationwide Multistate Licensing System and Registry is deemed to be disclosed directly to the department and subject to Code Section 7-1-70. Such information shall not be disclosed to the public and shall remain privileged and confidential pursuant to Code Section 7-1-70.
(e) Applicants and licensees shall be required to pay the charges associated with their utilization of the Nationwide Multistate Licensing System and Registry.
7-3-24. [Repealed] Suspension or revocation of license — Grounds; procedure; effect of loss of license on contracts.
7-3-25. Redesignated.
7-3-26. [Repealed] Probation and civil penalties for violations.
7-3-27. [Repealed] Judicial review of Commissioner’s decisions.
7-3-28. Redesignated.
7-3-29. Redesignated.
ARTICLE 4 – Obligations of Licensees
7-3-30. Requirements of licensees; maintenance of records.
(a) Each licensee shall:
(1) Conspicuously post a copy of its license in each location where the licensee engages in installment lending;
(2) Submit to the Nationwide Multistate Licensing System and Registry timely reports of condition, which shall be in such form and shall contain such information as the department may require;
(3) Clearly label all advertisements and any other documents required by rules and regulations of the department with its unique identifier;
(4) Make, keep, and use in its business such books, accounts, and records as the department may require; and
(5) Make available to the department, upon request, any books, accounts, records, files, documents, evidence, or other information relating to the business of making installment loans.
(b) Each licensee shall preserve any books, accounts, and records required to be made, kept, or used pursuant to this Code section or rules and regulations of the department for five years or such greater period of time as prescribed by rules and regulations of the department to the licensee.
(c) A licensee may maintain any books, accounts, and records required to be made, kept, or used pursuant to this Code section:
(1) In photographic, electronic, or other similar form; and
(2) At a location outside of this state so long as such records are transmitted to a location designated by the department within ten days of the date of a written request by the department.
7-3-31. Required notifications to be provided by licensee; bond company requirement of notification; method for providing notice.
(a) A licensee shall send written notice to the department within ten days of the following:
(1) Any knowledge or discovery that any of the licensee’s owners, executive officers, directors, trustees, agents, or covered employees has been convicted of a felony as described in subsection (a) of Code Section 7-3-42;
(2) Any knowledge or discovery that any of the licensee’s owners, executive officers, directors, trustees, agents, or covered employees has committed fraud, engaged in dishonest activities, or made any misrepresentation;
(3) The discharge of a covered employee for actual or suspected misrepresentations, dishonest acts, or fraudulent acts;
(4) Any knowledge or discovery of an administrative, civil, or criminal action initiated by any governmental entity against the licensee;
(5) Any knowledge or discovery of a criminal action initiated by any governmental entity for misrepresentations, dishonest acts, or fraudulent acts against any owner, executive officer, director, trustee, agent, or covered employee of a licensee; and
(6) The filing of a petition by or against the licensee under the United States Bankruptcy Code, 11 U.S.C. Sections 101 through 110, for bankruptcy reorganization or the filing of a petition by or against the licensee for receivership or the making of a general assignment for the benefit of its creditors.
(b) A licensee shall send written notice to the department within 30 days of the following:
(1) The commencement of any action brought against it relating to its business of installment lending in Georgia;
(2) The commencement of any action by any creditor or claimant relating to its business of installment lending in Georgia or involving a claim against the bond filed with the department pursuant to Code Section 7-3-21;
(3) The entry of any judgment against the licensee related to its business of installment lending in Georgia; and
(4) Any change in the address of its principal place of business or registered agent for service in Georgia.
(c) The corporate surety that issued a licensee a bond pursuant to Code Section 7-3-21 shall send written notice to the department via registered or certified mail or statutory overnight delivery within ten days of paying any claim or judgment to any creditor or claimant with details sufficient to identify the claimant and the claim or judgment so paid.
7-3-31. Required notifications to be provided by licensee; bond company requirement of notification; method for providing notice.
(a) A licensee shall send written notice to the department within ten days of the following:
(1) Any knowledge or discovery that any of the licensee’s owners, executive officers, directors, trustees, agents, or covered employees has been convicted of a felony as described in subsection (a) of Code Section 7-3-42;
(2) Any knowledge or discovery that any of the licensee’s owners, executive officers, directors, trustees, agents, or covered employees has committed fraud, engaged in dishonest activities, or made any misrepresentation;
(3) The discharge of a covered employee for actual or suspected misrepresentations, dishonest acts, or fraudulent acts;
(4) Any knowledge or discovery of an administrative, civil, or criminal action initiated by any governmental entity against the licensee;
(5) Any knowledge or discovery of a criminal action initiated by any governmental entity for misrepresentations, dishonest acts, or fraudulent acts against any owner, executive officer, director, trustee, agent, or covered employee of a licensee; and
(6) The filing of a petition by or against the licensee under the United States Bankruptcy Code, 11 U.S.C. Sections 101 through 110, for bankruptcy reorganization or the filing of a petition by or against the licensee for receivership or the making of a general assignment for the benefit of its creditors.
(b) A licensee shall send written notice to the department within 30 days of the following:
(1) The commencement of any action brought against it relating to its business of installment lending in Georgia;
(2) The commencement of any action by any creditor or claimant relating to its business of installment lending in Georgia or involving a claim against the bond filed with the department pursuant to Code Section 7-3-21;
(3) The entry of any judgment against the licensee related to its business of installment lending in Georgia; and
(4) Any change in the address of its principal place of business or registered agent for service in Georgia.
(c) The corporate surety that issued a licensee a bond pursuant to Code Section 7-3-21 shall send written notice to the department via registered or certified mail or statutory overnight delivery within ten days of paying any claim or judgment to any creditor or claimant with details sufficient to identify the claimant and the claim or judgment so paid.
7-3-33. Unreasonable collection tactics.
No licensee or employee or agent thereof shall willfully use any unreasonable collection tactics. Unreasonable collection tactics shall include, but not be limited to, any conduct by the licensee or any employee or agent thereof which:
(1) Causes the borrower or any member of his or her family to suffer bodily injury or physical harm;
(2) Constitutes a willful or intentional trespass by force of the borrower’s home or personal property without process of law;
(3) Holds up the borrower to public ridicule or unreasonably degrades the borrower in the presence of neighbors or business associates;
(4) Involves use of printed material which simulates or resembles a summons, warrant, or other legal process; or
(5) Although otherwise lawful, occurs at an unreasonable hour of the night. Attempts to make collections by means of personal visits, telephone calls, and the like shall be deemed to occur at an unreasonable hour of the night if they occur between the hours of 10:00 P.M. and 5:00 A.M.
ARTICLE 5 – Regulation by Department
7-3-40. Investigations and examinations; payment of fees; cooperation by licensee.
(a) The department is authorized to investigate and examine the affairs, businesses, premises, and records of any applicant, licensee, or any other installment lender as often as it deems necessary to carry out the purposes of this chapter, regardless of whether such applicant, licensee, or other installment lender acts or claims to act under any other licensing or registration requirement of this state. The department may conduct such investigation outside of this state if it deems necessary.
(b) The department may conduct an investigation or examination pursuant to this Code section at least once every 60 months; provided, however, that the department may alter the frequency or scope of investigations or examinations through rules and regulations or waive an investigation or examination if it determines that, based on records submitted to the department and the past history of operations in this state, such investigation or examination is unnecessary.
(c) A licensee or other installment lender shall pay a fee as prescribed by rule or regulation of the department to cover the cost of an investigation or examination.
(d) In carrying out an investigation or examination pursuant to this Code section, the department shall be authorized to:
(1) Conduct an on-site examination of any applicant, licensee, or other installment lender at any location without prior notice;
(2) Access, receive, and use any books, accounts, records, files, documents, evidence, or other information, including, but not limited to:
(A) Criminal, civil, and administrative history information, including information related to charges that did not result in a conviction;
(B) Personal history and experience information, including, but not limited to, independent credit reports obtained from a consumer reporting agency described in the federal Fair Credit Reporting Act, 15 U.S.C. Section 1681a; and
(C) Any other documents, information, or evidence the department deems relevant to the investigation or examination, regardless of the location, possession, control, or custody of such documents, information, or evidence;
(3) Enter into agreements or relationships with other government officials or regulatory authorities to improve efficiencies and reduce regulatory burden by sharing resources, documents, records, information, or evidence or by utilizing standardized or uniform methods or procedures;
(4) Accept and rely on investigation or examination reports made by other government officials or regulatory authorities within or outside this state, provided that such reports provide information necessary to fulfill the responsibilities of the department under this chapter;
(5) Accept and incorporate in any report of the department audit reports or portions of audit reports made by an independent certified public accountant on behalf of an applicant or licensee;
(6) Require or permit any person to file a statement in writing as to all the facts and circumstances concerning any matter to be investigated pursuant to this chapter;
(7) Request any financial data relevant to the business of making installment loans;
(8) Administer oaths, call any party to testify under oath, and require the attendance of witnesses;
(9) Require the production of books, accounts, records, files, documents, and papers;
(10) Take the depositions of witnesses; and
(11) Issue subpoenas for any witness or for the production of documentary evidence.
(e) Each licensee or person subject to this chapter shall make available to the department, upon request, any books, accounts, records, files, documents, evidence, or other information relating to the activities of engaging in the business of making installment loans.
(f) No licensee or person subject to investigation or examination under this chapter shall knowingly withhold, abstract, remove, mutilate, destroy, or secrete any books, accounts, records, files, documents, evidence, or other information.
7-3-41. Subpoena powers and procedures.
(a) A subpoena issued pursuant to Code Section 7-3-40 may be served by:
(1) Registered or certified mail or statutory overnight delivery, return receipt requested, to the addressee’s business or personal mailing address;
(2) Examiners appointed by the department; or
(3) The sheriff of the county where such witness resides or is found or where the person in custody of any books, accounts, records, files, documents, or papers resides or is found.
(b) The department may issue and apply to enforce subpoenas in this state at the request of any governmental agency, department, organization, or entity regulating the making of installment loans in another state if the activities constituting the alleged violation for which the information is sought would be a violation of this chapter if the alleged activities had occurred in this state.
(c) If any person refuses to obey a subpoena issued under this chapter, a superior court of appropriate jurisdiction, upon application by the department, may issue to the person an order requiring such person to appear before the court to show cause why such person should not be held in contempt for refusal to obey the subpoena. Failure to obey a subpoena may be punished as contempt by the court.
7-3-42. Impact of felony convictions of licensee; criminal background checks.
(a) The department shall not issue a license and may revoke a license if it finds that the applicant or licensee or any director, trustee, agent, owner, executive officer, or covered employee of the applicant or licensee has been convicted of a felony in any jurisdiction or of a crime which, if committed within this state, would constitute a felony under the laws of this state. For the purposes of this article, a person shall be deemed to have been convicted of a crime if such person shall have pleaded guilty or nolo contendere to a charge thereof before a court or federal magistrate or shall have been found guilty thereof by the decision or judgment of a court or federal magistrate or by the verdict of a jury, irrespective of the pronouncement of sentence or the suspension thereof and regardless of whether first offender treatment without adjudication of guilt pursuant to the charge was entered or an adjudication or sentence was otherwise withheld or not entered on that charge, unless and until such plea of guilty or nolo contendere or such decision, judgment, or verdict shall have been set aside, reversed, or otherwise abrogated by lawful judicial process or until probation, sentence, or both probation and sentence of a first offender without adjudication of guilt have been successfully completed and documented or unless the person convicted of the crime shall have received a pardon therefor from the President of the United States or the governor or other pardoning authority in the jurisdiction where the conviction occurred.
(b) The department shall be authorized to obtain criminal history record checks with respect to any applicant or licensee, any owner of the applicant or licensee, and any individual who is a director, trustee, executive officer, agent, or covered employee of the applicant or licensee. Such criminal history record checks may be requested by the department through the Georgia Crime Information Center and the Federal Bureau of Investigation, and the department shall have the authority to receive the results of such checks. Fees required for a criminal history record check by the Georgia Crime Information Center or the Federal Bureau of Investigation shall be paid by the applicant or licensee.
(c) Upon receipt of fingerprints, fees, and other required information, the Georgia Crime Information Center shall promptly transmit one set of fingerprints to the Federal Bureau of Investigation for a search of bureau records and an appropriate report and shall retain the other set and promptly conduct a search of its own records and records to which it has access. The Georgia Crime Information Center shall notify the department in writing of any finding or if there are no such findings.
(d) All criminal history record checks received by the department or by the applicant or licensee shall be used by the party requesting such records for the exclusive purpose of carrying out the responsibilities of this article, shall not be a public record, shall be confidential and privileged, and shall not be disclosed to any other person or agency except to any person or agency which otherwise has a legal right to inspect such records. All such records received by the requesting party shall be maintained in conformity with the requirements of the Georgia Crime Information Center and the Federal Bureau of Investigation.
(e) Every applicant and licensee shall be authorized and required to obtain and maintain the results of criminal history record checks on covered employees. Such checks shall be handled by the Georgia Crime Information Center pursuant to Code Section 35-3-34 and the rules and regulations of the Georgia Crime Information Center. Applicants and licensees shall be responsible for any applicable fees charged by the Georgia Crime Information Center. An applicant or licensee may only employ an individual whose criminal history has been checked and has been found to be in compliance with all lawful requirements prior to the initial date of hire. This provision shall not apply to directors, owners, or executive officers of applicants or licensees, whose backgrounds shall have been investigated through the department before taking office, beginning employment, or securing ownership.
(f) Upon request by the department, an applicant or licensee shall take all steps necessary to have an international criminal history record check performed on any directors, owners, executive officers, and covered employees of applicants and licensees. The results of such international criminal history record check shall be provided to the department.
(g) Applicants and licensees shall have the primary responsibility for obtaining criminal history record checks on covered employees. The department shall be entitled to review the files of any applicant or licensee to determine whether the required record checks have been run and whether all covered employees are qualified. The department shall be authorized to discuss the status of covered employee criminal history record checks with applicants and licensees. Notwithstanding any other provisions of this article, the department shall retain the right to obtain criminal history record checks on covered employees of applicants and licensees.
7-3-43. Suspension or revocation of licenses.
(a) The department may suspend or revoke a license if it finds that any ground exists which would require or warrant the denial of an application for the issuance or renewal of a license.
(b) The department may deny an application or suspend or revoke a license upon a finding that an applicant or a licensee has:
(1) Committed any fraud, engaged in any dishonest activities, or made any misrepresentation;
(2) Violated any provision of this chapter, any rule, regulation, or order issued by the department pursuant to this chapter, or any other law in the course of its business of making installment loans;
(3) Made a false statement or failed to give a true reply in an application;
(4) Demonstrated incompetency or untrustworthiness to act as an installment lender;
(5) Failed to pay within 30 days after it became final a judgment recovered in any court in an action arising out of the licensee’s business of making installment loans;
(6) Purposely withheld, deleted, destroyed, or altered information requested by the department or made misrepresentations to the department;
(7) Operated in an unsafe or unsound manner; or
(8) Failed or refused to remit the fee required by Code Section 7-3-16 within the required time period.
(c) The department shall not issue a license and shall revoke a license if it determines that the applicant or licensee is not financially sound or responsible or not able to engage in the business of making installment loans in an honest, fair, and efficient manner and with the confidence and trust of the community.
(d) The department shall not issue a license and may suspend or revoke a license if an applicant or licensee was subject to, or employs any person subject to, a final cease and desist order or license revocation under this chapter within the preceding five years. Each applicant or licensee shall, before hiring an employee, examine the Nationwide Multistate Licensing System and Registry to determine that such employee is not subject to a cease and desist order or license revocation.
(e) The department shall not issue a license and may suspend or revoke a license if it finds that any owner, director, trustee, or executive officer of the applicant or licensee has been in one or more of those roles for a licensee whose application has been denied or revoked or suspended within the preceding five years.
7-3-44. Obligation to provide notice; hearings; compliance.
(a) Notice of the department’s intention to enter an order denying an application or suspending or revoking a license shall be sent to the applicant or licensee in writing by registered or certified mail or statutory overnight delivery addressed to the principal business address of such applicant or licensee. If a person refuses to accept service of such notice, the notice shall be served by the department under any other method of lawful service, and the person shall be liable to the department for a sum equal to the actual costs incurred to serve the notice. Such liability shall be paid upon notice and demand by the department and shall be assessed and collected in the same manner as other fees or fines administered by the department.
(b) Within 20 days of the date of the notice issued pursuant to subsection (a) of this Code section, the applicant or licensee may request in writing a hearing to contest the order. If no such hearing is requested, the department shall enter a final order stating the grounds for the denial, suspension, or revocation. Such final order shall be effective on the date of issuance, and the department shall promptly mail a copy thereof to the principal business address of such applicant or licensee.
(c) A decision by the department denying an application for licensure or an order of the department suspending or revoking a license shall be subject to review in accordance with Chapter 13 of Title 50, the “Georgia Administrative Procedure Act,” except that judicial review shall be available solely in the superior court of the county of domicile of the department.
(d) The department may pursue any administrative action initiated under this chapter against an applicant or licensee to its conclusion, regardless of whether the applicant or licensee withdraws its application or whether a licensee does not renew or surrenders its license.
(e) The suspension, revocation, or expiration of a license shall not alter, ameliorate, or void the duties, defenses, and liabilities of either a borrower or a licensee under any existing agreement or contract entered into by the licensee prior to such suspension, revocation, or expiration.
7-3-45. Cease and desist orders; hearings; reviews.
(a) The department may issue an order requiring a person to cease and desist immediately from unauthorized activities whenever it shall appear to the department that:
(1) Except as provided in paragraphs (2) and (3) of this subsection, a person has violated any law of this state or any rule, regulation, or order of the department. This includes, but is not limited to, a person engaging in any activity that would subject a licensee to suspension or revocation of its license under Code Section 7-3-43, whether or not such person is licensed. Such cease and desist order shall be final 20 days from the date of issuance unless the person to whom it is issued requests a hearing in writing within such 20 day period;
(2) A person without a license is engaging in or has engaged in activities requiring licensure under this chapter. Such cease and desist order shall be final 30 days from the date of issuance without the opportunity for an administrative hearing. If such person obtains a license or submits to the department evidence of licensure or exemption from licensure within the 30 day period, the department shall rescind the order; or
(3) A licensee has received a notice of bond cancellation under Code Section 7-3-21. Such cease and desist order shall be final 20 days from the date of issuance without the opportunity for an administrative hearing. If the required bond is reinstated or replaced and documentation evidencing such is submitted to the department within the 20 day period, the department shall rescind the order. In the event such cease and desist order becomes final, the license shall expire.
(b) Any cease and desist order authorized by this Code section shall be in writing, sent by registered or certified mail or statutory overnight delivery, and addressed to the person’s business address or, if the person is an individual, to either the business address or the individual’s personal address. Any cease and desist order sent to the person’s address that is returned to the department as “refused” or “unclaimed” shall be deemed as received and lawfully served.
(c) Any hearing authorized under paragraph (1) of subsection (a) of this Code section shall be conducted in accordance with Chapter 13 of Title 50, the “Georgia Administrative Procedure Act.”
(d) Judicial review of a final decision of the department issued pursuant to paragraph (1) of subsection (a) of this Code section shall be in accordance with Chapter 13 of Title 50, the “Georgia Administrative Procedure Act,” except that judicial review shall be available solely in the superior court of the county of domicile of the department.
(e) Judicial review of a final decision of the department issued pursuant to paragraph (2) or (3) of subsection (a) of this Code section shall be in accordance with Code Section 7-1-90, except that judicial review shall be available solely in the superior court of the county of domicile of the department.
7-3-46. Petitioning for state court jurisdiction; civil penalty; other penalties.
(a) Whenever a person fails to comply with the terms of a final order or decision of the department issued pursuant to this chapter, the department may, through the Attorney General, petition any superior court of this state having jurisdiction over one or more defendants for an order directing such person to obey the order of the department within a period of time as shall be fixed by the court. Upon the filing of such petition, the court shall allow a motion to show cause why it should not be granted. After a hearing upon the merits or after failure of such person to appear when ordered, the court shall grant the petition of the department upon a finding that the order of the department was properly issued.
(b) Any person who violates the terms of any final order or decision issued pursuant to this chapter shall be liable for a civil penalty not to exceed $1,000.00. Each day the violation continues shall constitute a separate offense. In determining the amount of the penalty, the department shall take into account the appropriateness of the penalty relative to the size of the financial resources of such person, the good faith efforts of such person to comply with the order, the gravity of the violation, the history of previous violations by such person, and such other factors or circumstances that contributed to the violation. The department may reduce any penalty which is subject to imposition or has been imposed pursuant to this Code section. Such penalty shall be final except as to judicial review as provided in Code Section 7-1-90, except that judicial review shall be available solely in the superior court of the county of domicile of the department.
(c) The department may bring an appropriate civil action to enforce any provision of this chapter or any rule, regulation, decision, or order issued pursuant to this chapter, whether by injunction or otherwise, in the superior court of this state having jurisdiction over one or more of the defendants.
(d) The department may prescribe by rule and regulation administrative fines for violations of this chapter or of rules, regulations, decisions, or orders issued pursuant to this chapter.
7-3-47. Confidentiality; disclosure limitations.
(a) Except as provided in this Code section, information obtained by the department pursuant to this chapter, which shall include any information disclosed through the Nationwide Multistate Licensing System and Registry, is confidential as provided in Code Section 7-1-70.
(b) In addition to the exceptions set forth in subsection (b) of Code Section 7-1-70, the department is authorized to share information obtained under this chapter with other regulatory or law enforcement authorities. In the case of such sharing, the safeguards to confidentiality already in place within such agencies or authorities shall be deemed adequate. A designated employee or agent of the department may disclose such information as is necessary to conduct a civil or administrative investigation or proceeding related to the business of making installment loans.
(c) The department is authorized to make the following information available to the public on the department’s website, upon receipt by the department of a written request, or in the Nationwide Multistate Licensing System and Registry:
(1) The name, business address, telephone number, facsimile number, and unique identifier of a licensee;
(2) The names and titles of the executive officers of a licensee;
(3) The names of the owners of a licensee;
(4) The name, business address, telephone number, and facsimile number of all locations of a licensee;
(5) The terms of or a copy of any bond filed by a licensee;
(6) Information concerning any violation of this chapter or any rule, regulation, or order issued pursuant to this chapter, provided that such information is derived from a final order of the department;
(7) The imposition of an administrative fine or penalty under this chapter; and
(8) The address of a licensee’s registered agent for service of process in this state.
7-3-48. Civil liability limited for providing information.
(a) Except in the case of malice, fraud, or bad faith, no person shall be subject to civil liability arising out of furnishing the department with information required pursuant to this chapter. No civil cause of action of any nature shall arise against such person:
(1) For any information relating to suspected prohibited conduct furnished to or received from law enforcement officials, their agents, or employees or furnished to or received from other regulatory authorities;
(2) For any information furnished to or received from other persons subject to the provisions of this chapter; or
(3) For any information furnished in complaints filed with the department.
(b) Neither the department nor its employees or agents shall be subject to civil liability, and no civil cause of action of any nature shall exist against the department or its employees or agents arising out of the performance of activities or duties pursuant to this chapter or by publication of any report of activities under this Code section.
7-3-49. Code Section 7-4-4 not repealed.
Nothing in this chapter shall be construed as repealing Code Section 7-4-4.
7-3-50. Criminal penalties; void loans; civil penalty to borrower for violation; violation not subject of class action; defense of good faith; limitation on remedies for voidness.
(a) Any person, including the executive officers, directors, trustees, owners, agents, and employees of such person, that willfully engages in the business of making installment loans without a license or an exemption pursuant to Code Section 7-3-4 shall be guilty of a felony and punished as provided in Code Section 7-1-845.
(b) Any person who makes a false statement under oath in an application for a license under this chapter or who engages in the business of making installment loans while the license of such person under this chapter is suspended shall be guilty of a misdemeanor.
(c) Any contract made under this chapter by a person guilty of a felony or misdemeanor under subsection (a) or (b) of this Code section shall be null and void.
(d) Any installment lender who fails to comply with this chapter shall be liable to the borrower or borrowers thereon for a single penalty in an amount equal to twice the amount of all interest and loan fees charged to said borrower or borrowers on the most recent loan made by the lender to said borrower or borrowers; provided, however, that the liability under this subsection shall not be less than $100.00.
(e) A licensee shall have no liability under subsection (d) of this Code section if, within 15 days after discovering an error or violation and prior to the institution of an action under this Code section or the receipt of written notice of the error or violation, the lender notifies the person concerned of the error or violation and makes any necessary adjustments in the appropriate account to ensure that such person will not be required to pay charges in excess of those permitted by this chapter.
(f) A licensee shall not be liable for a violation of this chapter if the licensee shows by a preponderance of the evidence that the violation was not intentional and resulted from a bona fide clerical or typographical error, notwithstanding the maintenance of procedures reasonably adopted to avoid any such error, and makes any necessary adjustments in the appropriate account to ensure that no borrower will be required to pay charges in excess of those permitted by this chapter.
(g) A claim of violation of this chapter against a licensee may be asserted in an individual action only and may not be the subject of a class action under Code Section 9-11-23 or any other provision of law. A claim of violation of this chapter against an unlicensed lender may be asserted in a class action under Code Section 9-11-23 or any other provision of law.
(h) If a contract is made in good faith in conformity with an interpretation of this chapter by the appellate courts of this state or in a rule or regulation promulgated by the department, no provision in this Code section imposing any penalty shall apply, notwithstanding that, after such contract is made, such rule or regulation is amended, rescinded, or determined by judicial or other authority to be invalid for any reason.
(i) Any installment lender who shall knowingly and willfully with intent to defraud a borrower make a contract in violation of this chapter shall be guilty of a misdemeanor, and the contract so made shall be null and void.
7-3-51. Regulatory authority.
Without limiting the power conferred by Chapter 1 of this title, the department may make reasonable rules and regulations, not inconsistent with law, for the interpretation and enforcement of this chapter.
7-3-52. Limited continuation of licenses.
Every license in force and effect under the former provisions of this chapter on June 30, 2020, shall remain in full force and effect on July 1, 2020, and all such existing licensees shall be required to renew their licenses pursuant to Code Sections 7-3-20 and 7-3-22.