A payday cash advance is a small borrowed from a lender for a short period of time, usually 7 to 14 days, with interest rates very high. For example, a payday loan in Georgia was $ 100 a $ 15 fee for a period of 14 days so that the annual rate is a whooping 360%. The loan must be repaid at the end of 14 days and costs, but if a person is unable to repay the loan is extended or rolled over for an additional fee, there is trapping the borrower in a cycle of debtinsurmountable.
Several surveys conducted by various organizations have shown that borrowers are generally unable to repay the loan and sometimes borrow from another payday lender to repay a loan to trap them deeper into debt.
People with modest incomes but determined soldiers, single mothers, minority communities and older people seeking payday lenders that offer a quick solution to problems of cash management. They usually have no savings whatsoever and no access to other forms of credit. Hassles, impersonal method of obtaining the loan, the rate at which these loans can be obtained, ignorance and illiteracy are other factors that contribute to people opt for payday loans. By presenting a pay stub and a postdated check, a person may obtain a payday loan in Georgia in a matter of minutes which is convenient for those who have a bad credit history to get loans when there is a crisisof cash. Borrowers just realize that they pay more in fees and interest charged to them or Annual Percentage Rate as high as 360% to 780%.
Payday Loans in Georgia has become the company’s most profitable money lending in the United States of America. It is a growing business as the profit margin is amazing, almost 34% before tax. The lender just needs a little capital to start the business, banks also play an active role in providing capital for payday lenders.
April 15, 2004, Georgia passed a law that makes payday loans in Georgia ready punishable by imprisonment for a year and a maximum fine of $ 5,000 per loan. After careful consideration of the law was adopted which provides for severe penalties for those crimes that violate the law. The new law prohibits loans of $ 3,000 or less if the loan violates the laws of usury of Georgia. The new limits payday loan law, the annual rate of 16%. Some key provisions include
• Borrowers can pursue payday lenders three times the total amount of all interest and expenses as well as lawyer’s fees and court costs.
• District Attorney and the Attorney General are authorized to bring a civil action on behalf of the State seeking three times the amount of all interest and costs. The district attorney may keep half of any recovery of their office budget.
Class actions against payday lenders are allowed •.
• Payday loans are illegal null and lenders are unable to collect the debt.
• Payday lenders have been declared a public nuisance.
• The tax equal to 50% of all products of payday loans is imposed as a penalty.
• Payday lenders are not allowed to obtain certificates of authority to do business in Georgia Secretary of State and the Department of Banking and Finance. Payday lenders with existing certificates will face revocation.
• The law prohibits non-bank lenders from partnering with out of state banks to avoid the wear limits of Georgia.
• Adequate protection was provided for military personnel and their families.
• The lender is prohibited from garnishment of any military pay or wages.
• The lender may not collect the loan from a client or family member if the member has been deployed to a combat or combat support position for the duration of the deployment.
• The lender is allowed to communicate with the commanding officer in an effort to recover the loan of military personnel who had borrowed.
• The lender must agree to be bound by the terms of a loan repayment plan is negotiated by military advisers and credit counselors.
• Lenders must agree to honor any statement or proclamation by a military base commander that the specific lender was declared off limits to military personnel or members of their families and not to seek military personnel.
Some exceptions are those involved in financial transactions in accordance with:
• The laws governing financial institutions as defined in section 7-1-1 et seq.
• The laws that govern the state and credit unions with federal charters.
• The laws governing residential mortgage loans in Georgia.
• The laws regulating Georgia Industrial Loan Act.
• The laws regulating Georgia Credit Card Bank Act, including assignees.
These loans are legal under:
• The payment of retail and home solicitation act.
• Motor vehicles Finance Sales Act.
• Lenders granted loans that are lawful under the pawn statues.
• Loans from banks and federally chartered savings.
• Loans from state banks insured by the Deposit Insurance of the federal government.
• Loans Tax refund anticipation.
The bill, passed in the year 2004, called the act of 2004 payday loan allows charges and racketeering against offenders and a fine of $ 25 000 and imprisonment can 25 years.Payday loans are illegal in the state of Georgia.The State of Georgia payday loan law was seen as a model for legislation in the fight against the plague of payday loans. The law made it impossible for payday lenders to abuse the citizens of Georgia by imposing exorbitant April and not trapped deep in debt. The soldiers, single mothers, elderly and minority communities are adequately protected by the law of predatory sharks that payday lenders are. The law protects the citizens of Georgia to a growing threat to society, the payday lenders.
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