Georgia

Payday lenders charge exorbitant fees to borrowers without assessing their ability to repay, and the annual interest rates on these loans are in the triple digits.

Georgia has long been a national leader in the fight against predatory lending, imposing strict usury limits on small loans. In 2004, Georgia legislators closed loopholes used by payday lenders to charge triple-digit interest rates; they reaffirmed their commitment to keeping payday lending out by increasing fines and criminal penalties for making small loans at illegal interest rates. These laws save Georgians over $284 million annually. Georgians are also concerned about other high-cost loans like car-title lending, in which lenders charge annual interest rates of up to 300%. A 2019 poll...

Payday and car title loans are small-dollar, high-cost products that thrive on keeping consumers in a cycle of debt. With lenders doing essentially no underwriting, consumers find it easy to obtain these loans, often marketed as a solution to financial emergency. However, the unaffordability of the loan and the lenders extreme leverage over the borrowers – either through direct access to the bank account or threatening repossession of the borrower’s car - makes it very difficult to escape a cycle of debt that can last months, if not years. Debt trap products often lead to other financial harms...

Payday and car-title loans typically carry annual percentage rates (APR) of at least 300%. These high-cost loans are marketed as quick solutions to a financial emergency. Research demonstrates, however, that they frequently lead to debt that is nearly impossible to escape. In addition, these loans are related to a cascade of other financial consequences, such as increased overdraft fees, delinquency on other bills, involuntary loss of bank accounts, and even bankruptcy. For car-title loans, the end result is too often the repossession of the borrower’s car, a critical asset for many people...

This color-coded map of payday stores by household reveals a disturbing pattern. Southern states are among the most targeted for these high-cost, low-dollar loans.

CRL Senior Policy Counsel Ellen Harnick testifies in a joint public hearing held in Atlanta, GA regarding regulatory reforms to the Community Reinvestment Act, and urges the following improvements to CRA: 1. Broaden CRA assessment areas to reflect the actual scope of bank activity. 2. Require that the activities of bank affiliates count toward the CRA rating of their parent institution. 3. Encourage fair and affordable savings and transactions services specifically targeted to meet the needs of low- and moderate-income individuals, including the unbanked and under-banked. 4. Strengthen...