Georgia's Payday Loan Law: A Model for Preventing Predatory Payday Lending


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Published: June 29, 2006

A Georgia statute passed in May 2004 imposes stiff penalties for payday lending by non-banks and in-state banks, and is the first state law to expressly prohibit payday lenders from contriving with out-of-state banks to evade state usury limits.  Soon after its enactment, several payday lenders and their bank "partners" sued the state seeking a court ruling that the Act was unconstitutional.  The effort failed. The Georgia Act is a good example of state legislation against abusive lending practices and lender contrivances to circumvent state law.