The Georgia Act Restricting Georgia Payday Loans

Because the population of people living in Georgia who are in dire need of financial aid is growing, it also harbors the growth of lending companies that offers a payday loan as well. Georgia payday loan was offered in response to support financial needs of its citizens however Georgia payday loan was taken into too much advantage of lending companies that result to its borrowers to become more buried with debts. These credit sharks had successfully tied down their borrowers into too much interest debt that they can no longer pay for the total principal amount borrowed.

A Georgia payday loan was initially offered with good intent to help their citizens ease their financial burden through temporarily lending money that will suffice their financial emergency needs. But later on lending companies offering a Georgia payday loan has taken advantage to too much extent with their sky rocketing interests the financial needs of the citizens of Georgia. The State of Georgia noticed that most individuals who availed of the Georgia payday loan are on the brink of financial burden in paying the extreme interest rates imposed by lending companies, they decided to regulate the interest rates applied in Georgia payday loan companies.

The Usury Law provides regulations to limit the interest rates imposed by lending companies. An unlicensed lender in the State of Georgia is prohibited to charge more than 8% of loan interests for $3,000 and below loans. Eventually, the Industrial Loan Act of 1955 made Georgia payday loan illegal through requiring state licensing and registration with imposed usury law to limit loan interests. The Payday Lending Act of 2004 made sanctions to increase a felony fine for racketeering charges against companies requiring high interest rates. Violators of this act are subjected to a fine of up to $25,000 for every violation with a possible 25 years of jail sentence.

The Georgia Act amending the criminal code to include a new criminal offense of payday lending results to uprising of complaints coming from Georgia payday loan lending companies. They sued Georgia’s Attorney General and Secretary of States for imposing the ban and to prevent the imposition of the law against their business agenda. They claimed that the Law was unconstitutional in court rulings but after series of court proceedings their cause was futile. Most ban supporters admit that if the restriction for loan interest will be lifted, it will again harbor the growth of financial predators to take advantage of those in financial trouble. The court of law agreed with this premise.

The Georgia Act applied to Georgia payday loan practice is a good example of legislations against abusive lending practices that safeguards its citizens from further financial burden.

Tags: Paycheck Loan, Borrow Money, Cash Advance, Faxless, Money