O.C.G.A. § 7-3-4 (2019)
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; (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; or (10) A tax exempt organization under Section 501(c)(3) of the Internal Revenue Code of 1986 that does not impose any interest,
fees, or other charges in connection with installment loans or the servicing of such loans.
History
Ga. L. 1904, p. 79, § 18; Ga. L. 1920, p. 215, § 19; Code 1933, §§ 25-221, 25-318; Ga. L. 1955, p. 431, § 5; Code 1981, § 73-6; Ga. L. 1985, p. 249, § 1; Ga. L. 1997, p. 143, § 7; Ga. L. 2016, p. 390, § 7-4/HB 811; Code 1981, § 7-3-4, as redesignated by Ga. L. 2020, p. 156, § 2/SB 462; Ga. L. 2022, p. 220, § 38/HB 891; Ga. L. 2023, p. 651, § 45/HB 55, effective July 1, 2023. Amendments. The 2022 amendment, effective July 1, 2022, inserted “or acting as an installment lender” in the first sentence in subsection (a); deleted “or” from the end of paragraph (b)(4), substituted a semicolon for a period at the end of paragraph (b)(5), and added paragraphs (b)(6) through (b)(9).
The 2023 amendment, effective July 1, 2023, deleted “or” at the end of paragraph (b)(8), substituted “; or” for a period at the end of paragraph (b)(9), and added paragraph (b)(10).
Annotations
Editor’s notes. Former Code Section 7-3-4, concerning the applicability of the chapter and its effect on existing lenders, was repealed by Ga. L. 2020, p. 156, § 2/SB 462, effective June 30, 2020. This Code section was based on Ga. L. 1955, p. 431, § 3; Ga. L. 1975, p. 393, § 1; Ga. L. 1989, p. 14, § 7. U.S. Code. Section 501(c)(3) of the Internal Revenue Code of 1986, referred to in paragraph (b)(10), is codified at 26 U.S.C. Section 501(c)(3).
JUDICIAL DECISIONS Purpose of Industrial Loan Act; banks not subject to its provisions. - Purpose of the Georgia Industrial Loan Act (see now Georgia Installment Loan Act, O.C.G.A. § 7-3-1 et seq.) is to eliminate abuses which grow from unregulated entities engaging in small loan business. Banks are otherwise regulated and are expressly excluded from regulation by the Georgia Industrial Loan Act and are exempt from its provisions. Marshall v. Fulton Nat’l Bank, 145 Ga. App. 190, 243 S.E.2d 266, 1978 Ga. App. LEXIS 1914, 1978 Ga. App. LEXIS 3230 (1978). Commissioner’s authority to investigate. - 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).
OPINIONS OF THE ATTORNEY GENERAL Exclusion of state or federally chartered banks from regulation. - Georgia statutes specifically provide that state or federally chartered banks are excluded from regulation under the Georgia Industrial Loan Act (see now Georgia Installment Loan Act, O.C.G.A. § 7-3-1 et seq.) and are not required to obtain a license from the Georgia
Industrial Loan Department. 1979 Op. Att’y Gen. No. 79-33. Section supports proposition that banks are exempt from regulation. - Further authority for proposition that banks were exempt from regulation under the Georgia Industrial Loan Act (see now Georgia Installment Loan Act, O.C.G.A. § 7-3-1 et
seq.) and are not required to obtain a license as authority lied in the language of former Code 1933, § 41A-1313 (see now O.C.G.A § 7-1-292). 1979 Op. Att’y Gen. No. 79-33. Inclusion of federal savings and loan associations. - Federal savings and loan association is solely an invention of federal statute, and can be formed from existing state associations, including state building and loan associations; therefore, the term “Federal and Georgia building and loan association” formerly used in the statutes referred to and included a federal savings and loan association. 1978 Op. Att’y Gen. No. 78-12. Federal savings and loan associations are exempted. - Consumer loans for amounts less than $3,000.00, with interest charged in excess of 9 percent simple interest would be governed by the Georgia Industrial Loan Act (see now O.C.G.A. § 7-3-1 et seq.), but the Act grants specific exemptions from its provisions to “banks, trust companies,
real estate loan or mortgage companies, federal and Georgia building and loan associations”. Although federal savings and loan associations are not specifically named as such, they are included in the list of exemptions; therefore, wholly owned subsidiaries of federal savings and loan associations, created pursuant to federal statute and regulation, are not required to obtain a license under the Georgia Industrial Loan Act in order to make loans of less than $3,000.00 at interest rates permitted by Georgia usury statutes. 1978 Op. Att’y Gen. No. 78-12. Construction with usury laws. - Merchant who makes cash advances of $3,000.00 or less is subject to the provisions of the Georgia Industrial Loan Act (now Georgia Installment Loan Act), O.C.G.A § 7-3-1 et seq., rather than O.C.G.A § 7-4-2(a)(2), regarding legal rate of interest, unless the merchant charges 8 percent simple interest per annum or less. 1984 Op. Att’y Gen. No. 84-79.
ARTICLE 2 OPERATING PROCEDURES Editor’s notes. This article was designated by Ga. L.
2020, p. 156, § 2/SB 462, effective June 30, 2020.