Georgia Payday Loan Laws: The Ultimate Legislative Guide

Payday loans are still alive and well in many parts of America. Across the country, 12 million people still use them each year. Because each state government has the power to regulate the industry within their borders, there are 50 distinct rulesets that range from complete prohibition to a total lack of limitations. This guide is an in-depth explanation of the Georgia payday loan laws and their history in the state.

Payday lending status in Georgia: Prohibited

Payday lending has been illegal in Georgia since 2004. Their government limited lending rates to 10%, which effectively eliminated storefront payday lenders in the state. Breaking the usury laws is a felony in Georgia and is punishable by jail time.

Loan terms, debt limits and collection limits  in Georgia

• Maximum loan amount: $3,000
• Interest rate (APR): 10%
• Maximum loan term: 36 months and 15 days
• Origination fee: 8% of the first $600 and 4% of the excess
• Maintenance charge: $3 per month
• Late fee: The greater of $10 or 5¢ for each $1.00 of the loan

The Georgia payday loan laws are a great example of clear restrictions that effectively restrain payday lenders within the state. Feel free to take a look at the original legislation.

READ MORE: Georgia debt relief and resources

Georgia payday loan laws: How they stack up

The question of interest rates and how to keep them from getting out of hand seems to be as old as the concept of money. Even ancient texts like Hammurabi’s Code and the Old Testament have something to say about it. America is still struggling to get it right, especially because each state has the right to set the rules within its borders.

In addition to Georgia, here are the states where payday lending is illegal: Arizona, Arkansas, Connecticut, Colorado, Hawaii, Illinois, Maryland, Massachusetts, Minnesota (as of Jan. 1, 2024), Montana, Nebraska, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Pennsylvania, South Dakota, Vermont, West Virginia and the District of Columbia.

Georgia has had laws in place to limit payday lending since 1955 but only succeeded in taming the industry in 2004. Any lender offering loans with principal balances under $3,000 and interest rates over 8% was required to register for a license with the state under the updated Georgia Installment Loan Act (GILA). They could offer loans with rates no higher than 10%. In 2020, the law expanded to encompass all lenders offering loans under $3,000.

The Georgia payday loan laws are noticeably stricter and more effective than those in other states where payday lending is illegal. For example, their rate limit of 10% is more aggressive than most. New Hampshire, Montana, Colorado, and South Dakota all have laws that allow payday lenders to charge up to 36%.

READ MORE: How to get out of payday loans

Are tribal loans legal in Georgia?

Technically, Georgia’s interest rate cap on payday loans makes all forms of payday lending in the state illegal. However, that hasn’t stopped tribal lenders from issuing loans.

Native American tribes are sovereign nations in the United States. That means they’re generally immune to state regulations, and it’s hard to sue them for breaching the laws of the states in which they reside, though they usually follow applicable federal laws.

Tribal lenders are a type of short-term loan provider that partners with Native tribes to try and share in their tribal immunity. They use that as an excuse to sidestep the regulations meant to protect consumers, such as the rate restrictions on payday loans. Many tribal lenders charge interest rates with APRs as high as 700%.

Georgia has been very aggressive in battling tribal lenders, and some tribal lenders have stopped offering loans to the state’s residents.

“When it comes to payday lending in Georgia, there is no gray area. It is unquestionably illegal in any form,” said Sam Olens, who served as the state’s attorney general from 2010 to 2016. “We will not stand for unscrupulous, out-of-state lenders taking advantage of Georgia consumers by skirting our laws.”

READ MORE: Is my payday lender licensed in my state?

Consumer information

The Department of Banking and Finance is responsible for upholding Georgia’s payday loan laws. They’re in charge of giving licenses to lenders under the GILA, monitoring their activities, and ensuring that they comply with regulations. It’s their fundamental responsibility to protect consumer interests and promote economic and technological progress within the industry.

The Department took over from the Office of the Insurance Commissioner due to Senate Bill 462, which came into effect on July 1, 2020. The transfer was primarily to make regulation of the industry more efficient. The regulatory and administrative processes that were in place for the residential mortgage and money service businesses now apply to installment lending.

READ MORE: Payday loan consolidation and relief that works

Where to make a complaint

The Georgia Department of Banking and Finance is the best place to register a complaint about illegal payday or installment loans within the state. Here’s the contact information: 

• Regulator: Georgia Department of Banking and Finance
• Address: 2990 Brandywine Road, Suite 200, Atlanta, Georgia 30341-5565
• Phone: 770-986-1633
• Email: [email protected]
• Link to website: https://dbf.georgia.gov/payday-lending

Consumers can also submit a complaint to the Consumer Federal Protection Bureau (CFPB). They are the federal government’s organization dedicated to helping consumers with financial issues, including payday lenders.

Number of Georgia consumer complaints by issue

These statistics are all according to the CFPB Consumer Complaint Database. Statistics updated as of: February 10th, 2021

Payday lender with the most complaints in Georgia: Big Picture Loans, LLC

Payday lenders have an almost unerring ability to dodge the law and stay in business. The latest strategy they’ve taken to avoid the prohibition in states like Georgia is to partner with Native American tribes.

In theory, that allows them to share a tribe’s “tribal immunity.” That means that neither consumers nor the government can sue them for breaking the law (at least, not easily). Native American tribes are sovereign nations within the United States, so they’re able to create and abide by their own legal processes.

Big Picture Loans, LLC is one of these tribal lenders. They offer short-term installment loans, which they market as being superior to payday loans, but are essentially the same thing.

Big Picture Loans is an extension of the Lac Vieux Desert Band of Lake Superior Chippewa Indians, and they take full advantage of the privilege it grants them. Though the limit is 10% in Georgia, their rates for new customers start at 350%.

Their typical loan terms are:

• Principal balances of $400 to $3,500
• Annual Percentage Rates (APRs) of 35% to 699% (the minimum rate for new customer rates is 350%)
• Repayment terms of 4 to 18 months

Just like traditional payday lenders, they don’t check credit scores. In fact, they lend to almost anyone with an income and a bank account. They encourage all American adults with a monthly income of $700 or more to apply, which amounts to just $8,400 a year. For context, the federal poverty line is at $12,880 per year for a single person.

Most common complaints about Big Picture Loans, LLC

The issue most consumers have with Big Picture Loans is that the company charges fees or interest that they didn’t expect. Big Picture Loans discloses their Annual Percentage Rates (APRs) on their website and presumably in their loan agreements, but borrowers still find them surprising.

The blame for this issue undoubtedly lies on both parties, to some extent. Borrowers should be responsible for doing their due diligence and understanding what they’re signing up for.

However, the frequency with which Big Picture Loans is charging people more than they expect should give them pause. They’re clearly not doing a proper job of explaining how expensive their loan products are. They tuck away a link to their rates page at the bottom of their home page, and their explanation of their fees tries to paint them in the most flattering light possible.

They show that their APR range is 350% to 699% for new customers, but it’s only a footnote. Even their explanation of what a 350% interest would look like on a $1,000 loan is formatted to be as non-threatening as possible. They only show what the monthly payment would be, never the total amount.

The top 10 most complained-about payday lenders

Big Picture Loans never had a monopoly on payday lending in Georgia. These are the other major offenders from the past eight years and the most common problems people have had with them. Almost all of them are about unexpectedly high fees or interest, which just goes to show that the industry is rife with unreasonably expensive loans.

Even though they’re technically illegal in the state today, some of these companies are still trying to make their business work in Georgia. Most notably, tribal lenders like BlueChip Financial are still going strong due to their general lack of respect for state laws.

Payday loan statistics in Georgia

• Georgia ranks as the 5th state for the most overall payday loan complaints
• Georgia ranks as the 9th state for the most payday loans per capita
• There have been 18,281 total payday loan-related complaints made to the CFPB since 2013―762 of these complaints originated from Georgia
• The estimated total population in Georgia is 10,617,423 people
• There are 7.1769 payday loan complaints per 100,000 people in Georgia
• The most popular reason for submitting a payday loan complaint is “Charged fees or interest you didn’t expect.”

READ MORE: Payday loan debt statistics

History of payday loans in Georgia

As is true in the rest of the country, the Georgia payday loan laws have changed over the years. Although, interestingly, they’ve taken a strong stance against the industry for much longer than most other states.

Payday loans have been technically illegal in Georgia for decades. Way back in 1955, Georgia passed the first version of the Georgia Industrial Loan Act. It attempted to curtail the industry but had difficulty keeping it in check.

In 2004, when the Georgia Payday Lending Act came into effect, the industry became significantly weaker. Usurious lending became a felony, making the penalties far steeper.

Payday loans are still illegal in Georgia in 2021, and there have even been recent developments that tightened the restrictions against them. The Department of Banking and Finance is an effective regulator, and the rules now require every lender that offers loans under $3,000 to go through their licensing process.

That said, payday lenders are constantly trying to find new loopholes to weasel out of the restrictions on them. Georgia citizens and lawmakers must stay ahead of their attempts to keep payday loans at bay.

Flashback: A Georgia payday loan story

The modern Georgia payday loan laws do an excellent job of keeping the industry in check within the state, but it hasn’t always been that way. One interesting way to put the gravity of these loans into perspective is to take a look at a story from the distant past. It often shows how far progress has (or has not) come.

A particularly poignant story in Georgia can be found in the archives of the Center for Responsible Lending (CRL). They have an article from September 29th, 2005 that recounts two depressingly familiar instances of payday lenders taking advantage of people. Here’s what happened.

The military payday loan crisis

A man named Jason Withrow took out a $300 payday loan in Georgia during the summer of 2003. Like many victims of payday lenders, he struggled to repay the debt. As a result, he had to take out another payday loan just to pay off his first one. Before he knew it, he was stuck in the payday loan trap. He ended up paying $5,000 in interest on just $1,800 in loans.

Around the same time, a man named Myron Hicks borrowed $1,500 from a payday lender. He needed it to repair his car, which is a classic reason that people resort to payday loans. He ended up paying an outrageous sum, too: $3,000, twice that of what he borrowed.

What did these men have in common besides being payday loan victims in Georgia? They were active-duty military. For years, payday lenders took advantage of military members in particular. The CRL article notes some heartbreaking stats from the time: 

• Active-duty military personnel were three times more likely than civilians to take out a payday loan.
• One in five military members were payday loan borrowers in 2004.
• Military families paid over $80 million a year in fees to payday lenders.

It wasn’t until 2006 when the Military Lending Act (MLA) came into effect that payday lenders backed off. It capped interest rates at 36% for all lenders providing loans to active military members.

36% is still expensive, so military personnel still need to be careful about taking on debt, but it’s nowhere near as unreasonable as traditional payday loan rates. Fortunately, even tribal lenders (who usually won’t balk at breaking the law) often respect the MLA and decline to provide loans to people in the military.

The bottom line: Should you take out a payday loan in Georgia?

The Georgia payday loan laws prohibit the industry, which has only ever been good for consumers, despite the protests that many lenders make to the contrary. No one deserves a loan that causes them to pay back double or triple what they originally borrowed as payday loans do. They’re designed to keep people in a cycle of never-ending debt that they can’t repay. They are:

• Exponentially more expensive than all other forms of lending
• So short-lived that borrowers have no time to turn their finances around to pay them back
• Exclusively offered by lenders who ignore ethical conduct (and sometimes the law) for their profit at other people’s expense

Unfortunately, payday loans still exist in Georgia in the form of tribal loans. If anything, these are even more dangerous to take out than the previous incarnations of payday loans.

Tribal lenders use their tribal sovereignty as an excuse to ignore state limits on interest rates and continue to charge outrageous prices, but that sets a dangerous precedent of them simply breaking the law at will. In the past, traditional payday lenders had to at least somewhat respect the regulations in place.

These new lenders (which are often the old ones under new names) can take even greater liberties to abuse their customers. So don’t take a tribal payday or installment loan out in Georgia, or anywhere else, if you can help it.

If you have bad credit and need a loan, try to work with a credit union or a traditional lender who offers poor credit loans. Better yet, work on improving your personal finance skills to avoid needing to take on debt in the first place. If you need assistance, a credit counselor can help you for free. Contact one today!