O.C.G.A. § 7-3-3 (2019)
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.
History
Ga. L. 1955, p. 431, § 4; Ga. L. 1975, p. 393, § 1; Ga. L. 1989, p. 14, § 7; Ga. L. 1997, p. 143, § 7; Ga. L. 2020, p. 156, § 2/SB 462; Ga. L. 2022, p. 220, § 37/HB 891. Amendments. The 2022 amendment, effective July 1, 2022, added “or servicing installment
loans made by others, excluding loans made by affiliated entities” at the end of paragraph (2) and added “or services installment loans made by others, excluding loans made by affiliated entities” at the end of paragraph (6).
Annotations
JUDICIAL DECISIONS Licensee. - Trial court properly dismissed a declaratory judgment action brought by a bank and a cash advance lender, which was operating as an agent for the bank, to stop the Georgia Industrial Loan Commissioner from conducting an investigation of their lending activities because the Commissioner was authorized to conduct an investigation of the two entities’ loan activities, in spite of the lender’s claim that the bank and the lender were operating under the authority of federal banking law. BankWest, Inc. v. Oxendine, 266 Ga. App. 771, 598 S.E.2d 343, 2004 Ga. App. LEXIS 397 (2004), cert. denied, No. S04C1408, 2004 Ga. LEXIS 731 (Ga. Sept. 7, 2004). “Loan”. - Tax preparer’s payment to a taxpayer of a discounted sum in exchange for the right to a refund was not a “loan” but instead constituted a “sale” by the taxpayer of a chose in action. Cullen v. Bragg, 180 Ga. App. 866, 350 S.E.2d 798, 1986 Ga. App. LEXIS 2294 (1986). 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 (now Georgia Installment 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 Ga. App. LEXIS 356 (2007), cert. denied, No. S07C1247, 2007 Ga. LEXIS 556 (Ga. July 12, 2007). 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 (now Georgia Installment 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 Ga. App. LEXIS 313 (2017), aff’d, 304 Ga. 574, 820 S.E.2d 704, 2018 Ga. LEXIS 681 (2018).
OPINIONS OF THE ATTORNEY GENERAL Industrial loan license was required to make “payday loans” of $3000 or less, unless the lender was exempt under former O.C.G.A. § 7-3-6 (see now O.C.G.A. § 7-3-4). “Payday loans” were subject to the Georgia Industrial Loan Act (now Georgia
Installment Loan Act), O.C.G.A. § 7-3-1 et seq., notwithstanding the lender’s use of token consideration such as catalog coupons or purchase-leaseback arrangements. 2002 Op. Att’y Gen. No. 2002-3.