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Payday lending regulations proposed
Al Williams Office 2
State Rep. Al Williams works in his Atlanta office. - photo by File photo

A proposed law would allow tightly regulated payday lending businesses, replacing the ban on such operations passed amid controversy last year.
The short-term lending plans drew special interest in military towns like Hinesville where soldiers were said to be victimized by lending provisions they did not understand.
Rep. Al Williams of Midway is one of the sponsors of the new law, HB 163, which will make illegal offering or providing payday lending, deferred check presentment, cash advances and similar services to active duty members of the United States military or dependents.
“It’s simply a bill that will again legalize short term lending in Georgia,” Williams said.
“I worked on this bill starting a year ago to clean up some of the problems the previous bill had in it. We prohibit threatening calls or any criminal process to collect on the transaction.
“And I'm amending it so that when it’s paid timely it will go as a plus on your credit report and when it’s paid late it won’t go as a default. The only penalty is you won't get to borrow anymore.
“It’s not a perfect bill, but there’s a market for (the lending service). I think I can live with it. I tried to close the wheel that created the circle of debt.”
The current proposal limits the short-term payday loans to no more than 25 percent of the applicant’s monthly gross income, up to a maximum of $750.
Additional charges and hidden costs such as filing fees and maintenance charges are not allowed.
The 16-page law provides a $1,000 fine per violation.
Safeguards include licensing of operators of the loan businesses. The operators are required to have audited net worth of at least $25,000 per location and a corporate surety bond the same amount, not to exceed $250,000.
Annual license fees of $1,000 will be charged in addition to the cost of criminal record checks.
Businesses are required to post in a prominent place the name and toll-free telephone number of a consumer credit counseling service.
Customers’ agreements are also required to carry the wording,”A deferred presentment services transaction is not intended to meet long-term financial needs. A deferred presentment services transaction should be used only to meet short term cash needs."
Also required is the boldface notice "State law prohibits deferred presentment services transaction exceeding $750 total debt or 25 percent of your gross monthly income from any single deferred presentment services provider. Exceeding this amount may create financial hardships for you and your family. You have the right to rescind this transaction on or before the close of the next business day following this transaction."

Correspondent Joe Parker Jr. contributed to this story. 

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