GA Code § 7-3-4 (2021)
2021 Georgia Code|Title 7 - Banking and Finance|Chapter 3 - Installment Loans|Article 1 - General Provisions|§ 7-3-4. Licensing Requirement; Exemptions

  No person shall engage in the business of making installment loans in this state unless such person is licensed in accordance with this chapter or exempt from licensure as provided in subsection (b) of this Code section. No person within the operation of this chapter shall charge, contract for, or receive directly or indirectly on or in connection with any loan, any interest, charge, fee, compensation, or consideration which is greater than the rates for same provided in this chapter.   This chapter shall not apply to:   Businesses chartered or licensed under the authority of any law of this state or of the United States as banks, trust companies, savings and loan associations, savings banks, or credit unions or to the transactions of such businesses;   Banks or credit unions chartered under the authority of any state which have deposits that are federally insured or to the transactions of such businesses;   Pawnbrokers, as defined in Code Section 44-12-130, or to the transactions of pawnbrokers;   The University System of Georgia or its educational units, private colleges and universities in this state and associations thereof, or student loan transactions of such educational entities; or   An individual employed by a licensee or any person exempted from the licensing requirements of this chapter when acting within the scope of employment and under the supervision of the licensee or exempted person as an employee and not as an independent contractor.       (Ga. L. 1904, p. 79, § 18; Ga. L. 1920, p. 215, § 19; Code 1933, §§ 25-221, 25-318; Ga. L. 1955, p. 431, § 5; Code 1981, §7-3-6; Ga. L. 1985, p. 249, § 1; Ga. L. 1997, p. 143, § 7; Ga. L. 2016, p. 390, § 7-4/HB 811; Code 1981, §7-3-4, as redesignated by Ga. L. 2020, p. 156, § 2/SB 462.)    The 2020 amendment,  effective June 30, 2020, redesignated former Code Section 7-3-6 as present Code Section 7-3-4, added subsection (a), and rewrote the former provisions now designated as subsection (b), which read: "This chapter shall not apply to businesses organized or operating under the authority of any law of this state or of the United States relating to banks, trust companies, real estate loan or mortgage companies, federal savings and loan associations, credit unions, and pawnbrokers or to the transactions of such businesses, which businesses are expressly excluded from regulation under this chapter and exempted from the operation of its provisions. This chapter also shall not apply to the University System of Georgia or its educational units, to private colleges and universities in this state and associations thereof, or to student loan transactions of such educational entities, which educational entities and student loan transactions thereof are expressly excluded from regulation under this chapter and exempted from the operation of its provisions. It is expressly provided that no bank, trust company, national bank, insurance company, or real estate loan or mortgage company authorized to do business in this state shall be required to obtain a license under this chapter nor shall the University System of Georgia or its educational units or private colleges and universities in this state and associations thereof be required to obtain a license under this chapter. It is further provided that persons making loans and charging interest thereon at a rate of not more than 8 percent simple interest per annum shall not be subject to this chapter or required to obtain a license under this chapter." See Editor's notes at the beginning of this chapter for applicability.   Editor's notes.   - Former Code Section 7-3-4, concerning the applicability of the chapter and its effect on existing lenders, was repealed by Ga. L. 2020, p. SB 462, § 2/SB 462, effective June 30, 2020. This Code section was based on Ga. L. 1955, p. 431, § 3; Ga. L. 1975, p. 393, § 1; Ga. L. 1989, p. 14, § 7.   JUDICIAL DECISIONS   Purpose of Industrial Loan Act; banks not subject to its provisions.    - Purpose of the Georgia Industrial Loan Act (see now Georgia Installment Loan Act, O.C.G.A. § 7-3-1 et seq.) is to eliminate abuses which grow from unregulated entities engaging in small loan business. Banks are otherwise regulated and are expressly excluded from regulation by the Georgia Industrial Loan Act and are exempt from its provisions. Marshall v. Fulton Nat'l Bank, 145 Ga. App. 190, 243 S.E.2d 266 (1978).   Commissioner's authority to investigate.    - Trial court properly dismissed a declaratory judgment action brought by a bank and a cash advance lender, which was operating as an agent for the bank, to stop the Georgia Industrial Loan Commissioner from conducting an investigation of their lending activities because the Commissioner was authorized to conduct an investigation of the two entities' loan activities, in spite of the lender's claim that the bank and the lender were operating under the authority of federal banking law. BankWest, Inc. v. Oxendine, 266 Ga. App. 771, 598 S.E.2d 343 (2004).   OPINIONS OF THE ATTORNEY GENERAL   Exclusion of state or federally chartered banks from regulation.    - Georgia statutes specifically provide that state or federally chartered banks are excluded from regulation under the Georgia Industrial Loan Act (see now Georgia Installment Loan Act, O.C.G.A. § 7-3-1 et seq.) and are not required to obtain a license from the Georgia Industrial Loan Department. 1979 Op. Att'y Gen. No. 79-33.   Section 7-1-292 supports proposition that banks are exempt from regulation.    - Further authority for proposition that banks were exempt from regulation under the Georgia Industrial Loan Act (see now Georgia Installment Loan Act, O.C.G.A. § 7-3-1 et seq.) and are not required to obtain a license as authority lied in the language of former Code 1933, § 41A-1313 (see now O.C.G.A § 7-1-292). 1979 Op. Att'y Gen. No. 79-33.   Inclusion of federal savings and loan associations.   - Federal savings and loan association is solely an invention of federal statute, and can be formed from existing state associations, including state building and loan associations; therefore, the term "Federal and Georgia building and loan association" formerly used in the statutes referred to and included a federal savings and loan association. 1978 Op. Att'y Gen. No. 78-12.   Federal savings and loan associations are exempted.    - Consumer loans for amounts less than $3,000.00, with interest charged in excess of 9 percent simple interest would be governed by the Georgia Industrial Loan Act (see now O.C.G.A. § 7-3-1 et seq.), but the Act grants specific exemptions from its provisions to "banks, trust companies, real estate loan or mortgage companies, federal and Georgia building and loan associations". Although federal savings and loan associations are not specifically named as such, they are included in the list of exemptions; therefore, wholly owned subsidiaries of federal savings and loan associations, created pursuant to federal statute and regulation, are not required to obtain a license under the Georgia Industrial Loan Act in order to make loans of less than $3,000.00 at interest rates permitted by Georgia usury statutes. 1978 Op. Att'y Gen. No. 78-12.   Construction with usury laws.    - Merchant who makes cash advances of $3,000.00 or less is subject to the provisions of the Georgia Industrial Loan Act (now Georgia Installment Loan Act), O.C.G.A § 7-3-1 et seq., rather than O.C.G.A § 7-4-2(a)(2), regarding legal rate of interest, unless the merchant charges 8 percent simple interest per annum or less. 1984 Op. Att'y Gen. No. 84-79.