Georgia Makes Significant Changes to Installment Loan Laws | PC Weiner Brodsky Kider
On June 30, 2020, Georgia Governor Brian Kemp signed the law Senate Bill 462 (SB 462), which makes significant changes to what was previously known as the Georgia Industrial Loan Act (the Act). Renamed the Georgia Installment Loan Law, SB 462 expands coverage of the law’s licensing and substantive requirements to apply to anyone making a loan to an individual of $3,000 or less, regardless of the interest rate (i.e., installment loan).
Previously, the law generally only applied to people making loans of $3,000 or less with interest rates above 8%. In addition, the law did not apply to businesses organized or operating under the authority of any Georgia or United States law relating to mortgage or mortgage companies. SB 462 removes these interest rate and organization exemptions from the law, although it retains other exemptions.
SB 462 makes other notable changes to the law, including:
- Transfer the duties, powers, responsibilities and other powers regarding installment loans (i.e. loans to an individual in the amount of $3,000 or less) from the Commissioner of Industrial Loans to the Georgian Ministry of Banks and finances ;
- Require the use of NMLSR for new license applications and license renewals;
- Create new application requirements for original and renewal licenses;
- Adopt corporate bonding requirements; and
- Imposing new record keeping and notification requirements.
The amendments to SB 462 apply to all installment loans entered into on or after July 1, 2020.