It’s not uncommon for a person who needs an advance on their paycheck to seek out a payday lender. According to the Consumer Protection Unit of the Georgia Department of Law, payday loans are generally illegal in Georgia. In limited circumstances, a payday loan can be lawfully made within the state. These circumstances include:
1. If the loan is made by a licensed industrial loan lender, or
2. If the loan is made by an out-of-state bank insured by the FDIC, and the Georgia agent of such bank does not receive most of the profits from the transaction.
Other than these strict conditions, lenders face criminal penalties for violating state payday lending laws. An experienced Georgia criminal defense attorney can assist you in determining whether your business and financial transactions comply with existing legal requirements.
What Is “Payday Lending”?
Section 16-17-1 of the Official Code of Georgia broadly defines payday lending as all transactions in which funds are advanced to be repaid at a later date. Section 16-17-2 further narrows this definition to prohibit loans under $3,000 (except in specific situations where other statutes allow them, such as regulated mortgages, and state or federally chartered banks). In general, these statutes work together to ban short-term loans at high-interest rates, and other lending practices which are characteristic of payday loans.
In 2007, two payday lenders attempted to challenge the Georgia ban on payday lending. The state Supreme Court denied their challenge. According to Legal News Line, the court found that the legislature had a rational basis for distinguishing between in-state banks and out-of-state banks which directly enabled its legitimate purpose in enacting the law. The convictions of the two men were therefore upheld. One lender had been convicted of 49 misdemeanor violations of the act while the other was convicted of 46 misdemeanors.
Georgia’s ban on payday lending is among the first of its kind. Few other states have such an explicit and comprehensive ban. However, a new law is also one that is untested. The trial courts of Georgia are thus left to interpret the extremely broad definition of payday lending written into the state statutes. The definition continues to be tested at trial and challenged on appeal. This is why it is so important for those charged with payday lending violations to seek the advice of an experienced criminal defense attorney. If not, the fines associated with multiple violations can quickly bankrupt even profitable business operations.
An Experienced Defense Attorney Can Protect Business Owners’ Legal Interests
Attorney Jacob Stidham represents defendants across Georgia, including Buford, Suwanee, Gainesville, and Flowery Branch. He is an experienced white collar defense lawyer who can help business owners protect their financial interests in the face of criminal charges. Call 678-889-7953 today to schedule your free consultation with an experienced criminal defense attorney. The fines, fees, jail time, criminal record, and other consequences of a payday lending conviction can haunt a defendant for years to come. An experienced criminal defense attorney can help protect defendants’ constitutional rights, negotiate plea agreements to help mitigate the consequences of a conviction, and preserve evidence which supports a more favorable outcome at sentencing.