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2018 Georgia Code 16-17-1 | Car Wreck Lawyer

Link to State of Georgia Official Statute 2018 Georgia Code Annotated (sourced from legal.resource.org)
O.C.G.A. 16-17-1 Case Law from Google Scholar Amendments to OCGA 16-17-1

TITLE 16 CRIMES AND OFFENSES

Section 17. Payday Lending, 16-17-1 through 16-17-10.

ARTICLE 5 SANCTIONS AGAINST LICENSED PERSONS FOR OFFENSES INVOLVING CONTROLLED SUBSTANCES OR MARIJUANA

16-17-1. "Payday lending" defined; legislative findings; prohibited activity; no impairment of agencies with concurrent jurisdiction.

  1. Without limiting in any manner the scope of this chapter, "payday lending" as used in this chapter encompasses 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 and a "payday lender" shall be one who engages in such transactions. This definition of "payday lending" expressly incorporates the exceptions and examples contained in subsections (a) and (b) of Code Section 16-17-2.
  2. Despite the fact that the Attorney General of the State of Georgia has opined in Official Opinion 2002-3 entered on June 27, 2002, that payday lending is in violation of Georgia law and despite the fact that the Industrial Loan Commissioner has issued cease and desist orders against various payday lenders in the State of Georgia, the General Assembly has determined that payday lending continues in the State of Georgia and that there are not sufficient deterrents in the State of Georgia to cause this illegal activity to cease.
  3. The General Assembly has determined that various payday lenders have created certain schemes and methods in order to attempt to disguise these transactions or to cause these transactions to appear to be "loans" made by a national or state bank chartered in another state in which this type of lending is unregulated, even though the majority of the revenues in this lending method are paid to the payday lender. The General Assembly has further determined that payday lending, despite the illegality of such activity, continues to grow in the State of Georgia and is having an adverse effect upon military personnel, the elderly, the economically disadvantaged, and other citizens of the State of Georgia. The General Assembly has further determined that substantial criminal and civil penalties over and above those currently existing under state law are necessary in order to prohibit this activity in the State of Georgia and to cause the cessation of this activity once and for all. The General Assembly further declares that these types of loans are currently illegal and are in violation of Code Section 7-4-2. The General Assembly declares that the use of agency or partnership agreements between in-state entities and out-of-state banks, whereby the in-state agent holds a predominant economic interest in the revenues generated by payday loans made to Georgia residents, is a scheme or contrivance by which the agent seeks to circumvent Chapter 3 of Title 7, the "Georgia Industrial Loan Act," and the usury statutes of this state.
  4. Payday lending involves relatively small loans and does not encompass loans that involve interstate commerce. Certain payday lenders have attempted to use forum selection clauses contained in payday loan documents in order to avoid the courts of the State of Georgia, and the General Assembly has determined that such practices are unconscionable and should be prohibited.
  5. Without limiting in any manner the scope of this chapter, the General Assembly declares that it is the general intent of this chapter to reiterate that in the State of Georgia the practice of engaging in activities commonly referred to as payday lending, deferred presentment services, or advance cash services and other similar activities are currently illegal and to strengthen the penalties for those engaging in such activities.
  6. This chapter in no way impairs or restricts the authority granted to the commissioner of banking and finance, the Industrial Loan Commissioner, or any other regulatory authority with concurrent jurisdiction over the matters stated in this chapter.

(Code 1981, §16-17-1, enacted by Ga. L. 2004, p. 60, § 3; Ga. L. 2005, p. 60, § 16/HB 95.)

Law reviews.

- For annual survey of law of business associations, see 56 Mercer L. Rev. 77 (2004).

JUDICIAL DECISIONS

Enforcement.

- Request by creditors for a preliminary injunction blocking the enforcement of O.C.G.A. § 16-17-1 et seq., which prohibited payday loans, was moot because the creditors were no longer offering those loans; thus, the creditors no longer had a legally cognizable interest in obtaining the injunction and there was no longer an actual adversarial context for a ruling. BankWest, Inc. v. Baker, 446 F.3d 1358 (11th Cir. 2006).

Constitutionality.

- Trial court did not err in rejecting both the defendants' equal protection and vagueness challenges to O.C.G.A. § 16-17-1 et seq., after the defendants were charged with violating O.C.G.A. § 16-17-2, as both the defendants, as in-state lenders, were not similarly situated with out-of-state banks designated in O.C.G.A. § 16-17-2(a)(3), and hence were subject to state regulation restricting high interest rates on loans, whereas the out-of-state banks were not; the Georgia legislature had a rational basis for creating a class based on those in-state payday lenders who were subject to state regulation, and moreover the prohibition against payday loans in whatever form transacted was sufficiently definite to satisfy due process standards. Glenn v. State, 282 Ga. 27, 644 S.E.2d 826 (2007).

Injunctive relief upheld.

- Trial court did not manifestly abuse the court's discretion in granting the state a modified injunction in a suit against payday lenders because the state presented sufficient evidence to demonstrate it was entitled to injunctive relief, namely, that it would prevail at trial since a substantial judgment was issued against a lender, the lenders failed to produce financial information during discovery, and serious concerns as to the lenders insolvency existed. W. Sky Fin., LLC v. State of Ga. ex rel. Olens, 300 Ga. 340, 793 S.E.2d 357 (2016).

Construction of period of limitation.

- Supreme Court of Georgia is not persuaded that the Georgia legislature intended the period of limitation for bringing an enforcement action pursuant to the Payday Lending Act, O.C.G.A. § 16-17-1 et seq., to be governed by the one-year limitation period for forfeiture actions pursuant to the usury laws; instead, the Court concludes the remedies set forth in the Payday Lending Act are governed by the 20-year statute of limitation set forth in O.C.G.A. § 9-3-1. W. Sky Fin., LLC v. State of Ga. ex rel. Olens, 300 Ga. 340, 793 S.E.2d 357 (2016).

Construction.

- Georgia Supreme Court concludes that the Payday Lending Act, O.C.G.A. § 16-17-1 et seq., including the statement that payday lending does not encompass loans that involve interstate commerce, is merely a legislative finding of fact to which the Court is not bound; to exempt loans that involve interstate commerce from the prohibitions of the Act would create such a contradiction and absurdity as to demonstrate that the Georgia legislature did not mean it to create such a limitation. W. Sky Fin., LLC v. State of Ga. ex rel. Olens, 300 Ga. 340, 793 S.E.2d 357 (2016).

Legality of payday lending contracts was issue for arbitrator.

- Borrower's argument that the payday lending contracts that the borrower entered into were illegal and void ab initio under Georgia law, O.C.G.A. § 16-17-1, challenged the content of these contracts and not their existence and was an issue for an arbitrator, not the court, to decide. Jenkins v. First Am. Cash Advance of Ga., LLC, 400 F.3d 868 (11th Cir. 2005), cert. denied, 546 U.S. 1214, 126 S. Ct. 1457, 164 L. Ed. 2d 132 (2006).

Sale/leaseback transactions deemed illegal payday loans.

- Sale/leaseback transactions engaged in by consumer cash advance businesses violated the anti-payday lending statute, O.C.G.A. § 16-17-1 et seq., and the Georgia Industrial Loan Act, O.C.G.A. § 7-3-1 et seq., since the state proved that the purported lease back of personal property to the consumer was not based on the actual appraised market value of the personal property but directly corresponded to the loan amount; the state proved that the businesses were requiring customers to be released from the loan agreement by paying the principal amount advanced to them plus a 25 to 27 percent fee, which amounted to an annual percentage rate of 650 to 702 percent. Clay v. Oxendine, 285 Ga. App. 50, 645 S.E.2d 553 (2007), cert. denied, No. S07C1247, 2007 Ga. LEXIS 556 (Ga. 2007).

Prospective operation.

- Request by creditors for a preliminary injunction blocking the enforcement of O.C.G.A. § 16-17-1 et seq., (the Act), which prohibited payday loans, did not address a case or controversy because the Act did not apply retroactively to loans made before the effective date of the Act; even if the Georgia Attorney General had not explicitly conceded this point, O.C.G.A. § 1-3-5 prohibited the retroactive application to impair the obligation of existing contracts. BankWest, Inc. v. Baker, 446 F.3d 1358 (11th Cir. 2006).

Lender's 49 percent economic interest.

- In a class action suit seeking to hold a lender liable for payday loans, the trial court did not err in concluding that genuine issues of material fact existed as to whether the lender was the true lender of the loans made after May 14, 2004, because evidence was presented sufficient to create a genuine issue of material fact regarding whether the lender actually received only a 49 percent economic interest for the lender's services and even if the lender did so, whether the lender nevertheless, by contrivance, device, or scheme, attempted to avoid the provisions of O.C.G.A. § 16-17-2(a). Ga. Cash Am. v. Greene, 318 Ga. App. 355, 734 S.E.2d 67 (2012).

Funding agreements were investment contracts, not loans.

- After the defendants entered into separate funding agreements with the plaintiffs, the defendant's motion to dismiss a putative class action for damages premised on violations of the Georgia Industrial Loan Act (GILA), O.C.G.A. § 7-3-1 et seq., was properly granted, but the defendant's motion with regard to the Payday Lending Act (PLA), O.C.G.A. § 16-17-1 et seq., was improperly denied as the funding agreements were not loans, but rather were investments in the plaintiffs' litigation, because the repayment requirement was completely contingent upon the recovery of proceeds from the plaintiffs' related legal claims; thus, instead of being loans that were regulated by the GILA and the PLA, the funding agreements were investment contracts to which the GILA and the PLA did not apply. Cherokee Funding LLC v. Ruth, 342 Ga. App. 404, 802 S.E.2d 865 (2017).

RESEARCH REFERENCES

ALR.

- State regulation of payday loans, 29 A.L.R.6th 461.

Cases Citing O.C.G.A. § 16-17-1

Total Results: 11  |  Sort by: Relevance  |  Newest First

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Singer Mfg. Co. v. Wright, 97 Ga. 114 (Ga. 1895).

Cited 60 times | Published | Supreme Court of Georgia | Jul 15, 1895 | 35 L.R.A. 497

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Hufstetler v. State, 553 S.E.2d 801 (Ga. 2001).

Cited 18 times | Published | Supreme Court of Georgia | Oct 5, 2001 | 274 Ga. 343, 2001 Fulton County D. Rep. 3009

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W. Sky Fin., LLC v. State, 300 Ga. 340 (Ga. 2016).

Cited 17 times | Published | Supreme Court of Georgia | Oct 31, 2016 | 793 S.E.2d 357

BENHAM, Justice. These cases involve the scope of the State’s authority to regulate so-called “payday loans” pursuant to OCGA § 16-17-1 et seq., which has come to be known as the Payday Lending Act....
...The trial court referred the case to a special master who recommended the case be dismissed, but the trial court rejected the special master’s recommendation and denied Defendants’ motion to dismiss, finding that the State’s claim was not barred by the language of OCGA § 16-17-1 (d) indicating that “[pjayday lending ....
...(a) First, we address Defendants’ argument that the loans at issue in this case involve interstate commerce3 and are thus expressly excluded by the plain language of the Act: “Payday lending involves relatively small loans and does not encompass loans that involve interstate commerce.” OCGA § 16-17-1 (d)....
...the civil penalties sought in the complaint. Title 16 of the Georgia Code is the State’s Criminal Code, and we note that, unlike some legislative chapters, the legislature did not give Chapter 17 of that Title a name.4 Instead, Chapter 17, OCGA §§ 16-17-1 through 16-17-10, has come to be known as the “Payday Lending Act” simply as a convenient nickname, and that is how we refer to it here....
...Clearly, the Act applies not only to what is commonly referred to as payday lending,5 but to any business that involves the lending of amounts of $3,000 or less unless the loan falls within the exceptions set forth in OCGA§ 16-17-2 (a), none of which apply in this case. OCGA§ 16-17-1 includes a number of legislative findings that, inter alia, explain the reasons the General Assembly enacted this chapter. For example, OCGA § 16-17-1 (b) notes that the General Assembly found this chapter to be necessary despite the fact that the type of lending prohibited by the chapter is prohibited elsewhere in the Code because, it found, these other laws did not provide sufficient deterrents to cause this illegal activity to cease....
...of engaging in activities commonly referred to as payday lending, deferred presentment services, or advance cash services and other similar activities are currently illegal and to strengthen the penalties for those engaging in such activities. OCGA § 16-17-1 (e)....
...t to save the anti-arbitration provision of the Payday Lending Act from federal preemption as a result of the effect of the Federal Arbitration Act (“FAA”).7 Whether or not the legislature’s inclusion of the interstate commerce language in OCGA§ 16-17-1 (d) was an attempt to skirt the preemptive effect of the FAA, we conclude the use of that language was not intended to define the limits of the Act, but was merely intended to be a finding of fact....
...as to [e]nsure that the legislature meant something else.” (Citation and punctuation omitted.) Judicial Council of Ga. v. Brown & Gallo, LLC, 288 Ga. 294, 297 (702 SE2d 894) (2010). For the reasons set forth in Division 1 (a), we conclude that OCGA§ 16-17-1 (d), including the statement that payday lending “does not encompass loans that involve interstate commerce,” is merely a legislative finding of fact to which this Court is not bound....
...determined that substantial criminal and civil penalties over and above those currently existing under state law are necessary in order to prohibit [payday lending] activity in the State of Georgia and to cause the cessation of this activity once and for all.” OCGA § 16-17-1 (c)....
...at it would be serviced by CashCall. OCGA § 9-3-1 states: “Except as otherwise provided by law, the state shall be barred from bringing an action if, under the same circumstances, a private person would be barred.” Defendants note that OCGA § 16-17-1 (c) declares the types of loans covered by the Act to be those in violation of OCGA § 7-4-2. 42 Ga....
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Thorpe v. Russell, 274 Ga. 781 (Ga. 2002).

Cited 17 times | Published | Supreme Court of Georgia | Feb 4, 2002 | 559 S.E.2d 432, 2002 Fulton County D. Rep. 347

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Georgiacarry.org, Inc. v. Atlanta Botanical Gardens, Inc, 306 Ga. 829 (Ga. 2019).

Cited 16 times | Published | Supreme Court of Georgia | Oct 7, 2019

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Bd. of Commissioners v. Stewart, 668 S.E.2d 644 (Ga. 2008).

Cited 14 times | Published | Supreme Court of Georgia | Oct 6, 2008 | 284 Ga. 573, 2008 Fulton County D. Rep. 3148

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Efficiency Lodge, Inc. v. Neason, 889 S.E.2d 789 (Ga. 2023).

Cited 10 times | Published | Supreme Court of Georgia | Jun 21, 2023 | 316 Ga. 551

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Peek v. State, 527 S.E.2d 552 (Ga. 2000).

Cited 9 times | Published | Supreme Court of Georgia | Mar 6, 2000 | 272 Ga. 169, 2000 Fulton County D. Rep. 979

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Ruth v. Cherokee Funding, LLC, 820 S.E.2d 704 (Ga. 2018).

Cited 7 times | Published | Supreme Court of Georgia | Oct 22, 2018 | 304 Ga. 574

Blackwell, Justice. **574In Cherokee Funding v. Ruth, 342 Ga. App. 404, 802 S.E.2d 865 (2017), our Court of Appeals decided that neither the Industrial Loan Act, OCGA § 7-3-1 et seq., nor the *707Payday Lending Act, OCGA § 16-17-1 et seq.,1 applies to certain transactions in which a financing company provides funds to a plaintiff in a pending personal-injury lawsuit, the plaintiff is obligated to repay the funds with interest only if his lawsuit is successful, and h...
...or those engaging in [illegal] activities" "commonly referred to as payday lending, deferred presentment services, or advance cash services and other similar activities" and to "reiterate" that those activities were already unlawful in Georgia. OCGA § 16-17-1 (e)....
...y person to engage in any business, in whatever form transacted, ... 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" subject to several enumerated exemptions. OCGA § 16-17-1 (a)....
...The theory that a contract will be usurious or not, according to the kind of paper bag it is put up in, or according to the more or less ingenious phrases made use of in negotiating it, is altogether erroneous. The law intends that a search for usury shall penetrate to the substance.") See also OCGA § 16-17-1 (c) ("The General Assembly has determined that various payday lenders have created certain schemes and methods in order to attempt to disguise these transactions."); OCGA § 16-17-2 (b) (3) (providing that the Payday Lending Act shall appl...
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Glenn v. State, 644 S.E.2d 826 (Ga. 2007).

Cited 4 times | Published | Supreme Court of Georgia | May 14, 2007 | 282 Ga. 27

...Joseph Kenneth Mulholland, Dist. Atty., for Appellee. Thurbert E. Baker, Atty. Gen., Sidney R. Barrett, Jr., Asst. Atty. Gen., amicus appellant. HUNSTEIN, Presiding Justice. Appellants Nathaniel Glenn and John Dunlap challenged the constitutionality of OCGA § 16-17-1 et seq....
...rational basis for creating a class based on those instate payday lenders who are subject to State regulation and we hold that the classification bears an obvious and direct relation to the legitimate purposes of the legislation as set forth in OCGA § 16-17-1(c), (d) (deterring illegal, unconscionable payday lending in Georgia because of its adverse effect on the citizens of this State)....
...t Glenn) and "cashing checks" (appellant Dunn). We find no merit in this contention. The Legislature expressly recognized that "various payday lenders have created certain schemes and methods in order to attempt to disguise these transactions," OCGA § 16-17-1(c), and accordingly defined the prohibited conduct in a manner to encompass all of the creative ways payday lenders might use to avoid the Act....
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Ruth v. Cherokee Funding, LLC, 304 Ga. 574 (Ga. 2018).

Published | Supreme Court of Georgia | Oct 22, 2018

...CHEROKEE FUNDING, LLC et al. BLACKWELL, Justice. In Cherokee Funding v. Ruth, 342 Ga. App. 404 (802 SE2d 865) (2017), our Court of Appeals decided that neither the Industrial Loan Act, OCGA § 7-3- 1 et seq., nor the Payday Lending Act, OCGA § 16-17-1 et seq.,1 applies to certain transactions in which a financing company provides funds to a plaintiff in a pending personal-injury lawsuit, the plaintiff is obligated to repay the funds with interest only if his lawsuit is successful, an...
...10 [illegal] activities” “commonly referred to as payday lending, deferred presentment services, or advance cash services and other similar activities” and to “reiterate” that those activities were already unlawful in Georgia. OCGA § 16-17-1 (e)....
...generally prohibits “any person to engage in any business, in whatever form transacted, . . . 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” subject to several enumerated exemptions. OCGA § 16-17-1 (a)....
...ding to the kind of paper- bag it is put up in, or according to the more or less ingenious phrases made use of in negotiating it, is altogether erroneous. The law intends that a search for usury shall penetrate to the substance.”) See also OCGA § 16-17-1 (c) (“The General Assembly has determined that various payday lenders have created certain schemes and methods in order to attempt to disguise these transactions[.]”); OCGA § 16-17-2 (b) (3) (providing that the Payday Lending Act...