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Consumer loans under $3,000 are prohibited, each one is a separate criminal offence, and repeat convictions become felonies. Georgia also codified the true-lender test in 2004 — long before anyone else.
O.C.G.A. Title 16, Chapter 17 — Title 16 is Crimes and Offenses
Section 16-17-2 bars loans of less than $3,000 outside the listed exceptions. A violation is a misdemeanour of a high and aggravated nature — up to a year’s imprisonment, a fine of up to $5,000, or both.Georgia · StatuteO.C.G.A. § 16-17-2(d) — any person who violates subsection (a) or (b) shall be guilty of a misdemeanor of a high and aggravated nature and upon conviction shall be punished by imprisonment for not more than one year or by a fine not to exceed $5,000 or both
Two clauses give that real force. Each loan transaction is a separate violation. And anyone who aids or abets — expressly including any arbiter or arbitration company — is guilty on the same terms.
After three prior convictions, all subsequent ones become felonies: $10,000 or five years, or both.
This is the part worth pausing on. The General Assembly declared 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 to circumvent the Georgia Installment Loan Act and the state’s usury statutes.Georgia · StatuteO.C.G.A. § 16-17-1 — 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 the Georgia Installment Loan Act and the usury statutes of this state
Predominant economic interest. That is the same test Illinois adopted in 2021, New Mexico in 2023, Connecticut and Minnesota in 2023 — and Georgia wrote it into a criminal statute in 2004, seventeen years earlier.
An arbitration clause in a payday loan contract is not enforceable if the contract is unconscionable, and the statute directs courts to weigh the bargaining power of the parties, whether arbitration would be prohibitively expensive, whether the contract excludes the right to participate in a class action, and whether the venue would be unduly inconvenient.
The legislature also declared attempts to use forum selection clauses to escape Georgia courts unconscionable. The Eleventh Circuit agreed in Davis v. Oasis Legal Finance (2019), holding such clauses unenforceable against Georgia public policy — reasoning that reading the Act to exclude loans involving interstate commerce would make it virtually meaningless.
The Attorney General had already opined in Official Opinion 2002-3 that payday lending violated Georgia law, and the Industrial Loan Commissioner had issued cease and desist orders. The General Assembly found that it continued anyway, and that existing deterrents were insufficient.
It further recorded that the practice was having an adverse effect on military personnel, the elderly and the economically disadvantaged — and that substantial criminal and civil penalties were needed to end it “once and for all”.
Courts have since applied the chapter to disguised forms, holding that sale/leaseback transactions by consumer cash advance businesses violated it.
You can revoke authorisation and instruct your bank to stop the payment, whatever your agreement says.
What Regulation E says about automatic payments →
A payday loan is a consumer debt. If it goes unpaid, two Georgia rules decide what a lender can do next: how long it has to sue you, and how much of your pay a court can order taken.
Being sued over an old payday loan? A collector can still file, but the time limit is a defence you can raise — and you cannot be jailed for the debt. What can and cannot happen if you don’t pay →