You've probably all seen a commercial at one time or another for a payday lender. These businesses provide people with small loans at high interest rates. The expectation is that the person will pay back the loan once they receive their next paycheck or risk being accessed a high interest charge. Such businesses are highly restricted here in Georgia, as the Governor's Office of Consumer Protection explains on their website, and violating the law can also lead to misdemeanor criminal charges with the chance of fines and possible jail time as well.
But Georgia is not the only state that has made payday lending operations nearly illegal. Other states have also placed harsh restrictions on lending practices and may also enforce criminal prosecution if these regulations are violated. The federal government has also stepped in on occasion, seeking prosecution against businesses believed to have engaged in deceptive lending practices, failed to adhere to the requirements of the Truth in Lending Act, or used abusive debt collection practices, just to name a few.
But these aren't the only actions that have been taken against business owners who have payday lending operations. A famous example of this was Operation Choke Point which, according to a Washington Times article, put certain businesses on a high-risk list that suggested to lenders that it may not be a good idea to do business with anyone on the list. This hurt a lot of legitimate business owners though, the article claims, forcing some business owners to close shop and lose their investments.
Although prosecution in Georgia and other states does appear to show deceptive lending practices among some payday lenders, this shouldn't signal to prosecutors that this is the case with all business owners. As we pointed out already this month on our blog, business owners can suffer financial backlash after being accused of committing a crime -- even if the charges never result in prosecution. A conviction can be even more damaging, which is why legal representation becomes a necessity in situations like this.
The law is complex and is subject to change, which is not something most people are well versed in. This is where a lawyer can help because they stay up to date on the law and know how to present the right defense in even the most complex of legal cases.