Georgia Makes Important Changes to Installment Loan Laws | Weiner Brodsky Kider PC
On June 30, 2020, Georgia Governor Brian Kemp enacted 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 Act, SB 462 extends coverage of the licensing and substantive requirements of the law to apply to anyone making a personal loan of $ 3,000 or less, regardless of the interest rate (i.e. an installment loan).
Previously, the law generally only applied to people making loans of $ 3,000 or less with interest rates above eight percent. In addition, the law did not apply to businesses organized or operating under the authority of a law of the State of Georgia or the United States relating to mortgage or mortgage lending companies. SB 462 removes these interest rates and organizational exemptions from the Act, although it retains other exemptions.
SB 462 makes other notable changes to the law, including:
- Transfer the duties, powers, responsibilities and other powers relating to installment loans (i.e. loans to an individual in the amount of $ 3,000 or less) from the Commissioner of Industrial Loans to the Department of Banking and Finance. finances of Georgia;
- Require the use of the NMLSR for new license applications and license renewals;
- Create new application requirements for original and renewal licenses;
- Adopting corporate bond requirements; and
- Impose new record keeping and notification requirements.
The changes to SB 462 apply to all installment loans entered into as of July 1, 2020.