GA Code § 7-3-12 (2021)
2021 Georgia Code|Title 7 - Banking and Finance|Chapter 3 - Installment Loans|Article 2 - Operating Procedures|§ 7-3-12. Limitation on Further Charges

 No licensee shall charge, contract for, or receive any other or further amount in connection with any loans authorized by this chapter in addition to those provided in Code Section 7-3-11, except the actual lawful fees paid to a public official or agency of the state for filing, recording, or, on loans over $100.00, the amount of the lawful premiums, no greater than such fees, actually paid for insurance against the risk of nonrecording or releasing any instrument securing the loan; the court costs and attorney fees authorized by law incurred in the collection of any contract in default; and the actual and reasonable expenses of repossessing, storing, and selling any collateral pledged as security for any contract in default. No licensee shall divide into separate parts any contract for the purpose or with the effect of obtaining charges in excess of those authorized by this chapter.    (Ga. L. 1904, p. 79, §§ 10, 12; Civil Code 1910, §§ 3459, 3461; Ga. L. 1920, p. 215, § 13; Code 1933, §§ 25-214, 25-216, 25-313, 25-316; Ga. L. 1935, p. 394, § 2; Ga. L. 1955, p. 431, § 16; Code 1981, §7-3-15; Code 1981, §7-3-12, as redesignated by Ga. L. 2020, p. 156, § 2/SB 462.)    The 2020 amendment,  effective June 30, 2020, redesignated former Code Section 7-3-15 as present Code Section 7-3-12, and substituted "Code Section 7-3-11" for "Code Section 7-3-14". See Editor's notes at the beginning of this chapter for applicability.   Editor's notes.   - Former Code Section 7-3-12, concerning books, records, and reports, was repealed by Ga. L. 2020, p. 156, § 2/SB 462, effective June 30, 2020. The former Code section was based on Ga. L. 1904, p. 79, § 6; Civil Code 1910, §§ 3454, 3455; Ga. L. 1920, p. 215, § 11; Code 1933, §§ 25-209, 25-210, 25-310; Ga. L. 1955, p. 431, § 10; Ga. L. 1989, p. 14, § 7.   JUDICIAL DECISIONS   Editor's notes.   - In light of subsections (g) and (h) of O.C.G.A. § 7-3-29, decisions rendered prior to amendment of that section by Ga. L. 1980, p. 1784, §§ 1, 2, have been included in the annotations for this Code section.    Lender may not contract for any interest or charges not specifically authorized by the Georgia Industrial Loan Act (see now Georgia Installment Loan Act, O.C.G.A. § 7-3-1 et seq.). General Fin. Corp. v. Sprouse, 577 F.2d 989 (5th Cir. 1978).    Waiver of homestead exemption did not constitute a further charge within meaning of former Code 1933, § 25-316 (see now O.C.G.A. § 7-3-12). Lowe v. Termplan, Inc., 144 Ga. App. 671, 242 S.E.2d 268 (1978).    Title fee disbursed to third party constitutes an additional charge which was prohibited by former Code 1933, § 25-316 and thus renders loan contract between the parties null and void. Kennesaw Fin. Co. v. Mirabelli, 143 Ga. App. 254, 238 S.E.2d 256 (1977) (decided prior to 1980 amendment to § 7-3-50).   Notary fees to lender's employee are prohibited charges.    - When loan company receives benefit from collection of notary fees at least indirectly, in that the job held by an employee is attractive and easier to fill with a qualified person by reason of additional compensation or supplement to regular salary in the form of notary fees, notary fees constitute "any other or further amount" under former Code 1933, § 25-316 (see now O.C.G.A. § 7-3-12). Georgia Inv. Co. v. Norman, 231 Ga. 821, 204 S.E.2d 740 (1974).   Loan including every legally permissible charge becomes usurious by notary fee.    - When, after charging the borrower every charge legally permissible under the terms of the Industrial Loan Act (now Georgia Installment Loan Act), O.C.G.A. § 7-3-1 et seq., a lender disburses $1.00 of the amount loaned to the borrower to an employee of lender as a notary public fee, such disbursement, not being permitted by the Act, results in usurious interest being charged to the borrower. Georgia Inv. Co. v. Norman, 231 Ga. 821, 204 S.E.2d 740 (1974).   Acceleration of remaining installments, including unearned interest, renders contract void.    - When contract provides for acceleration upon the debtor's default of all remaining installments of the loan, which installments include unearned interest, the contract was null and void under former Code 1933, § 25-316 (see now O.C.G.A. § 7-3-12). Anderson v. G.A.C. Fin. Corp., 135 Ga. App. 116, 217 S.E.2d 605 (1975) (decided prior to 1980 amendment of § 7-3-50).    Acceleration clause in Industrial Loan Act (now Georgia Installment Loan Act), O.C.G.A. § 7-3-1 et seq., contract which upon default permits collection of entire balance due on contract without excluding unearned interest is violative of the Act and voids the contract. Diggs v. Swift Loan & Fin. Co., 154 Ga. App. 389, 268 S.E.2d 433 (1980) (decided prior to 1980 amendment of § 7-3-50).    Provision for acceleration of unearned interest is a contract authorizing collection of more than is provided or approved by the Industrial Loan Act (now Georgia Installment Loan Act), O.C.G.A. § 7-3-1 et seq., and thus authorizes a result contrary to its terms, and is in violation of the Act; the loan is void. Frazier v. Courtesy Fin. Co., 132 Ga. App. 365, 208 S.E.2d 175 (1974) (decided prior to 1980 amendment of § 7-3-50).   Loan contract usurious.    - Loan contract providing for eight percent interest to be paid after maturity is not in violation of interest provisions of the Georgia Industrial Loan Act (see now Georgia Installment Loan Act, O.C.G.A. § 7-3-1 et seq.), but, when combined with an acceleration clause, exceeds the sum lawfully allowed to be charged. Hardy v. G.A.C. Fin. Corp., 131 Ga. App. 282, 205 S.E.2d 526, aff'd, 232 Ga. 632, 208 S.E.2d 453 (1974).   Accelerated collection voids obligation.    - Provision in 24-month note authorizing accelerated collection is sufficient to void the obligation. Lawrimore v. Sun Fin. Co., 131 Ga. App. 96, 205 S.E.2d 110 (1974).   Contract provision authorizing collection of unearned interest voids obligation.    - It makes no difference whether collection of the unearned interest was sought or not; provision in loan agreement authorizing collection of unearned interest alone voids obligation. Brock v. Liberty Loan Co., 135 Ga. App. 62, 217 S.E.2d 389 (1975).   Refinancing by original lender.    - In a refinancing by an original lender, when both sides must agree to an extension of credit and the lender presumably is not losing profits, there is no reason to depart from the general mandate of O.C.G.A. §§ 7-3-14 and7-3-15 (see now O.C.G.A. §§ 7-3-11 and7-3-12). This chapter provides for "add on" interest, earned uniformly on the entire original amount of the loan, without regard to installment reductions in the outstanding balance. Ford v. Termplan, Inc., 528 F. Supp. 1016 (N.D. Ga. 1981).   Nonfiling insurance premium validly charged.   - See Pinkston v. Security Fin. Corp., 183 Bankr. 986 (Bankr. S.D. Ga. 1995).    Cited in Securities Inv. Co. v. Pearson, 111 Ga. App. 761, 143 S.E.2d 36 (1965); Clark v. Liberty Loan Corp., 116 Ga. App. 213, 156 S.E.2d 535 (1967); Bell v. Loosier of Albany, Inc., 137 Ga. App. 50, 222 S.E.2d 839 (1975); Liberty Loan Corp. v. Childs, 140 Ga. App. 473, 231 S.E.2d 352 (1976); Goodwin v. Trust Co., 144 Ga. App. 787, 242 S.E.2d 302 (1978); Gainesville Fin. Servs., Inc. v. McDougal, 154 Ga. App. 820, 270 S.E.2d 40 (1980); Clyde v. Liberty Loan Corp., 249 Ga. 78, 287 S.E.2d 551 (1982); Aetna Fin. Co. v. Brown, 172 Ga. App. 537, 323 S.E.2d 720 (1984).   OPINIONS OF THE ATTORNEY GENERAL   Effect of Uniform Commercial Code on nonrecording insurance premiums.   - Nonrecording insurance premiums, subject otherwise to rate approvals and regulations by insurance department would be lawful after January 1, 1964, provided they do not exceed amount of recording fees set out in the Uniform Commercial Code. 1963-65 Op. Att'y Gen. p. 335.   Licensee may not charge borrower a policy-writing fee.    - No provision in the Industrial Loan Act (see now Georgia Installment Loan Act, O.C.G.A. § 7-3-1 et seq.) permits a licensee to charge a borrower a policy-writing fee; the language of former Code 1933, §§ 25-213, 25-214, 25-216, 25-301, 25-313, 25-315, and 25-317 (see now O.C.G.A. § 7-3-11(3)) clearly prohibited any charge in connection with insurance obtained as security on a loan other than the actual established premium, and former Code 1933, § 25-316 (see now O.C.G.A. § 7-3-12) clearly prohibited any charges other than those set out in the Act. 1963-65 Op. Att'y Gen. p. 428.   RESEARCH REFERENCES   Am. Jur. 2d.   - 54 Am. Jur. 2d, Moneylenders and Pawnbrokers, § 46 et seq.   C.J.S.   - 47 C.J.S., Interest and Usury; Consumer Credit, §§ 428 et seq., 436, 444, 445.   ALR.    - Usury: expenses or charges incident to loan of money, 21 A.L.R. 797; 53 A.L.R. 743; 63 A.L.R. 823; 105 A.L.R. 795; 52 A.L.R.2d 703.    Note or other obligation payable on demand for an amount in excess of amount actually loaned as usurious, 127 A.L.R. 460.    Construction, application, and effect of provisions of small loan acts regarding fees, charges, in addition to interest, 143 A.L.R. 1323.   Usury: expenses or charges incident to loan of money, 52 A.L.R.2d 703.   What is "compound interest" within meaning of statutes prohibiting the charging of such interest, 10 A.L.R.3d 421.   Enforceability of provision in loan commitment agreement authorizing lender to charge standby fee, commitment fee, or similar deposit, 93 A.L.R.3d 1156.