| HB 1389 - Deposit account fraud; dishonored instrument; bank charges |
First Reader Summary
A BILL to amend Article 2 of Chapter 9 of Title 16 of the
Official Code of Georgia Annotated, relating to deposit account
fraud, so as to clarify when the holder of a dishonored
instrument may charge to the maker of such instrument any fees
that a bank or financial institution charges such holder for
handling such dishonored instrument; and for other purposes.
| House |
Action |
Senate |
| 2/8/00 |
Read 1st Time |
2/22/00 |
| 2/9/00 |
Read 2nd Time |
|
| 2/14/00 |
Favorably Reported |
3/14/00 |
|
Committee Amend/Sub |
Sub |
| 2/21/00 |
Read 3rd Time |
|
| 2/21/00 |
Passed/Adopted |
|
HB 1389 LC 21 5976S
______________________________ offers the following
substitute to HB 1389:
A BILL TO BE ENTITLED
AN ACT
1- 1 To amend Chapter 9 of Title 16 of the Official Code of
1- 2 Georgia Annotated, relating to crimes involving forgery and
1- 3 fraudulent practices, so as to clarify when the holder of a
1- 4 dishonored instrument may charge to the maker of such
1- 5 instrument any fees that a bank or financial institution
1- 6 charges such holder for handling such dishonored instrument;
1- 7 to create the criminal offense of unlicensed commercial loan
1- 8 sharking; to define the elements of such offense as making
1- 9 certain numbers of loans which violate the criminal usury
1-10 statute; to provide for applicability to all transactions
1-11 which are in economic reality loans, notwithstanding the use
1-12 of other nomenclature or terms; to provide for
1-13 inapplicability to transactions by certain licensed lenders
1-14 and transactions lawful under certain statutes regulating
1-15 loans and advances of credit; to provide for investigatory
1-16 jurisdiction of the administrator of the "Fair Business
1-17 Practices Act of 1975"; to provide for authority of the
1-18 Attorney General to initiate and refer prosecutions; to
1-19 prescribe criminal penalties and punishment, including
1-20 restitution; to provide for civil remedies including
1-21 enhanced damages and procedures including class actions; to
1-22 provide for other related matters; to provide for an
1-23 effective date and applicability; to repeal conflicting
1-24 laws; and for other purposes.
1-25 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
1-26 SECTION 1.
1-27 Chapter 9 of Title 16 of the Official Code of Georgia
1-28 Annotated, relating to crimes involving forgery and
1-29 fraudulent practices, is amended by striking Code Section
1-30 16-9-20, relating to deposit account fraud, and inserting in
1-31 lieu thereof a new Code section to read as follows:
1-32 "16-9-20.
1-33 (a) A person commits the offense of deposit account fraud
1-34 when such person makes, draws, utters, executes, or
-1-
2- 1 delivers an instrument for the payment of money on any
2- 2 bank or other depository in exchange for a present
2- 3 consideration or wages, knowing that it will not be
2- 4 honored by the drawee. For the purposes of this Code
2- 5 section, it is prima-facie evidence that the accused knew
2- 6 that the instrument would not be honored if:
2- 7 (1) The accused had no account with the drawee at the
2- 8 time the instrument was made, drawn, uttered, or
2- 9 delivered;
2-10 (2) Payment was refused by the drawee for lack of funds
2-11 upon presentation within 30 days after delivery and the
2-12 accused or someone for him or her shall not have
2-13 tendered the holder thereof the amount due thereon,
2-14 together with a service charge, within ten days after
2-15 receiving written notice that payment was refused upon
2-16 such instrument. For purposes of this paragraph:
2-17 (A) Notice mailed by certified or registered mail
2-18 evidenced by return receipt to the person at the
2-19 address printed on the instrument or given at the time
2-20 of issuance shall be deemed sufficient and equivalent
2-21 to notice having been received as of the date on the
2-22 return receipt by the person making, drawing,
2-23 uttering, executing, or delivering the instrument. A
2-24 single notice as provided in subparagraph (B) of this
2-25 paragraph shall be sufficient to cover all instruments
2-26 on which payment was refused and which were delivered
2-27 within a ten-day period by the accused to a single
2-28 entity, provided that the form of notice lists and
2-29 identifies each instrument; and
2-30 (B) The form of notice shall be substantially as
2-31 follows:
2-32 'You are hereby notified that the following
2-33 instrument(s)
2-34 Number Date Amount Bank
2-35 ______ ______ ______ ______
2-36 ______ ______ ______ ______
2-37 ______ ______ ______ ______
2-38 ______ ______ ______ ______
2-39 ______ ______ ______ ______
-2-
3- 1 drawn upon ____________ and payable to ___________,
3- 2 (has) (have) been dishonored. Pursuant to Georgia
3- 3 law, you have ten days from receipt of this notice
3- 4 to tender payment of the total amount of the
3- 5 instrument(s) plus the applicable service charge(s)
3- 6 of $________ and any fee charged to the holder of
3- 7 the instrument(s) by a bank or financial institution
3- 8 as a result of the instrument(s) not being honored,
3- 9 the total amount due being ____________ dollars and
3-10 ______ cents. Unless this amount is paid in full
3-11 within the specified time above, a presumption in
3-12 law arises that you delivered the instrument(s) with
3-13 the intent to defraud and the dishonored
3-14 instrument(s) and all other available information
3-15 relating to this incident may be submitted to the
3-16 magistrate for the issuance of a criminal warrant or
3-17 citation or to the district attorney or
3-18 solicitor-general for criminal prosecution.'; or
3-19 (3) Notice mailed by certified or registered mail is
3-20 returned undelivered to the sender when such notice was
3-21 mailed within 90 days of dishonor to the person at the
3-22 address printed on the instrument or given by the
3-23 accused at the time of issuance of the instrument.
3-24 (b)(1) Except as provided in paragraphs (2) and (3) of
3-25 this subsection and subsection (c) of this Code section,
3-26 a person convicted of the offense of deposit account
3-27 fraud shall be guilty of a misdemeanor and, upon
3-28 conviction thereof, shall be punished as follows:
3-29 (A) When the instrument is for less than $100.00, a
3-30 fine of not more than $500.00 or imprisonment not to
3-31 exceed 12 months, or both;
3-32 (B) When the instrument is for $100.00 or more but
3-33 less than $300.00, a fine of not more than $1,000.00
3-34 or imprisonment not to exceed 12 months, or both; or
3-35 (C) When more than one instrument is involved and such
3-36 instruments were drawn within 90 days of one another
3-37 and each is in an amount less than $100.00, the
3-38 amounts of such separate instruments may be added
3-39 together to arrive at and be punishable under
3-40 subparagraph (B) of this paragraph.
3-41 (2) Except as provided in paragraph (3) of this
3-42 subsection and subsection (c) of this Code section, a
3-43 person convicted of the offense of deposit account
-3-
4- 1 fraud, when the instrument is for an amount of not less
4- 2 than $300.00 nor more than $499.99, shall be guilty of a
4- 3 misdemeanor of a high and aggravated nature. When more
4- 4 than one instrument is involved and such instruments
4- 5 were given to the same entity within a 15 day period and
4- 6 the cumulative total of such instruments is not less
4- 7 than $300.00 nor more than $499.99, the person drawing
4- 8 and giving such instruments shall upon conviction be
4- 9 guilty of a misdemeanor of a high and aggravated nature.
4-10 (3) Except as provided in subsection (c) of this Code
4-11 section, a person convicted of the offense of deposit
4-12 account fraud, when the instrument is for $500.00 or
4-13 more, shall be guilty of a felony and, upon conviction
4-14 thereof, shall be punished by a fine of not less than
4-15 $500.00 nor more than $5,000.00 or by imprisonment for
4-16 not more than three years, or both.
4-17 (4) Upon conviction of a first or any subsequent offense
4-18 under this subsection or subsection (c) of this Code
4-19 section, in addition to any other punishment provided by
4-20 this Code section, the defendant shall be required to
4-21 make restitution of the amount of the instrument,
4-22 together with all costs of bringing a complaint under
4-23 this Code section plus the amount of any fees charged to
4-24 the holder of the instrument by a bank or financial
4-25 institution as a result of the instrument not being
4-26 honored. The court may require the defendant to pay as
4-27 interest a monthly payment equal to 1 percent of the
4-28 amount of the instrument. Such amount shall be paid
4-29 each month in addition to any payments on the principal
4-30 until the entire balance, including the principal and
4-31 any unpaid interest payments, is paid in full. Such
4-32 amount shall be paid without regard to any reduction in
4-33 the principal balance owed. Costs shall be determined
4-34 by the court from competent evidence of costs provided
4-35 by the party causing the criminal warrant or citation to
4-36 issue; provided, however, that the minimum costs shall
4-37 not be less than $25.00. Restitution may be made while
4-38 the defendant is serving a probated or suspended
4-39 sentence.
4-40 (c) A person who commits the offense of deposit account
4-41 fraud by the making, drawing, uttering, executing, or
4-42 delivering of an instrument on a bank of another state
4-43 shall be guilty of a felony and, upon conviction thereof,
4-44 shall be punished by imprisonment for not less than one
-4-
5- 1 nor more than five years or by a fine in an amount of up
5- 2 to $1,000.00, or both.
5- 3 (d) The prosecuting authority of the court with
5- 4 jurisdiction over a violation of subsection (c) of this
5- 5 Code section may seek extradition for criminal prosecution
5- 6 of any person not within this state who flees the state to
5- 7 avoid prosecution under this Code section.
5- 8 (e) In any prosecution or action under this Code section,
5- 9 an instrument for which the information required in this
5-10 subsection is available at the time of issuance shall
5-11 constitute prima-facie evidence of the identity of the
5-12 party issuing or executing the instrument and that the
5-13 person was a party authorized to draw upon the named
5-14 account. To establish this prima-facie evidence, the
5-15 following information regarding the identity of the party
5-16 presenting the instrument shall be obtained by the party
5-17 receiving such instrument: the full name, residence
5-18 address, and home phone number.
5-19 (1) Such information may be provided by either of two
5-20 methods:
5-21 (A) The information may be recorded upon the
5-22 instrument itself; or
5-23 (B) The number of a check-cashing identification card
5-24 issued by the receiving party may be recorded on the
5-25 instrument. The check-cashing identification card
5-26 shall be issued only after the information required in
5-27 this subsection has been placed on file by the
5-28 receiving party.
5-29 (2) In addition to the information required in this
5-30 subsection, the party receiving an instrument shall
5-31 witness the signature or endorsement of the party
5-32 presenting such instrument and as evidence of such the
5-33 receiving party shall initial the instrument.
5-34 (f) As used in this Code section, the term:
5-35 (1) 'Bank' shall include a financial institution as
5-36 defined in paragraph (21) of Code Section 7-1-4.
5-37 (2) 'Conviction' shall include the entering of a guilty
5-38 plea, the entering of a plea of nolo contendere, or the
5-39 forfeiting of bail.
5-40 (3) 'Financial institution' shall have the same meaning
5-41 as defined in paragraph (21) of Code Section 7-1-4.
-5-
6- 1 (4) 'Instrument' means a check, draft, debit card sales
6- 2 draft, or order for the payment of money.
6- 3 (5) 'Present consideration' shall include without
6- 4 limitation:
6- 5 (A) An obligation or debt of rent which is past due or
6- 6 presently due;
6- 7 (B) An obligation or debt of state taxes which is past
6- 8 due or presently due;
6- 9 (C) An obligation or debt which is past due or
6-10 presently due for child support when made to the
6-11 custodian of a minor child for the support of such
6-12 minor child and which is given pursuant to an order
6-13 of court or written agreement signed by the person
6-14 making the payment;
6-15 (D) A simultaneous agreement for the extension of
6-16 additional credit where additional credit is being
6-17 denied; and
6-18 (E) A written waiver of mechanic's or materialmen's
6-19 lien rights.
6-20 (6) 'State taxes' shall include payments made to the
6-21 Georgia Department of Labor as required by Chapter 8 of
6-22 Title 34.
6-23 (g) This Code section shall in no way affect the authority
6-24 of a sentencing judge to provide for a sentence to be
6-25 served on weekends or during the nonworking hours of the
6-26 defendant as provided in Code Section 17-10-3.
6-27 (h)(1) Any party holding a worthless instrument and
6-28 giving notice in substantially similar form to that
6-29 provided in subparagraph (a)(2)(B) of this Code section
6-30 shall be immune from civil liability for the giving of
6-31 such notice and for proceeding as required under the
6-32 forms of such notice; provided, however, that, if any
6-33 person shall be arrested or prosecuted for violation of
6-34 this Code section and payment of any instrument shall
6-35 have been refused because the maker or drawer had no
6-36 account with the bank or other depository on which such
6-37 instrument was drawn, the one causing the arrest or
6-38 prosecution shall be deemed to have acted with
6-39 reasonable or probable cause even though he, she, or it
6-40 has not mailed the written notice or waited for the
6-41 ten-day period to elapse. In any civil action for
-6-
7- 1 damages which may be brought by the person who made,
7- 2 drew, uttered, executed, or delivered such instrument,
7- 3 no evidence of statements or representations as to the
7- 4 status of the instrument involved or of any collateral
7- 5 agreement with reference to the instrument shall be
7- 6 admissible unless such statements, representations, or
7- 7 collateral agreement shall be written simultaneously
7- 8 with or upon the instrument at the time it is delivered
7- 9 by the maker thereof.
7-10 (2) Except as otherwise provided by law, any party who
7-11 holds a worthless instrument, who complies with the
7-12 requirements of subsection (a) of this Code section, and
7-13 who causes a criminal warrant or citation to be issued
7-14 shall not forfeit his or her right to continue or pursue
7-15 civil remedies authorized by law for the collection of
7-16 the worthless instrument; provided, however, that if
7-17 interest is awarded and collected on any amount ordered
7-18 by the court as restitution in the criminal case,
7-19 interest shall not be collectable in any civil action on
7-20 the same amount. It shall be deemed conclusive evidence
7-21 that any action is brought upon probable cause and
7-22 without malice where such party holding a worthless
7-23 instrument has complied with the provisions of
7-24 subsection (a) of this Code section regardless of
7-25 whether the criminal charges are dismissed by a court
7-26 due to payment in full of the face value of the
7-27 instrument and applicable service charges subsequent to
7-28 the date that affidavit for the warrant or citation is
7-29 made. In any civil action for damages which may be
7-30 brought by the person who made, drew, uttered, executed,
7-31 or delivered such instrument, no evidence of statements
7-32 or representations as to the status of the instrument
7-33 involved or of any collateral agreement with reference
7-34 to the instrument shall be admissible unless such
7-35 statements, representations, or collateral agreement
7-36 shall be written simultaneously with or upon the
7-37 instrument at the time it is delivered by the maker
7-38 thereof.
7-39 (i) Notwithstanding paragraph (2) of subsection (a) of
7-40 this Code section or any other law on usury, charges, or
7-41 fees on loans or credit extensions, any lender of money or
7-42 extender of other credit who receives an instrument drawn
7-43 on a bank or other depository institution given by any
7-44 person in full or partial repayment of a loan, installment
7-45 payment, or other extension of credit may, if such
-7-
8- 1 instrument is not paid or is dishonored by such
8- 2 institution, charge and collect from the borrower or
8- 3 person to whom the credit was extended a bad instrument
8- 4 charge. This charge shall not be deemed interest or a
8- 5 finance or other charge made as an incident to or as a
8- 6 condition to the granting of the loan or other extension
8- 7 of credit and shall not be included in determining the
8- 8 limit on charges which may be made in connection with the
8- 9 loan or extension of credit or any other law of this
8-10 state.
8-11 (j) For purposes of this Code section, no service charge
8-12 or bad instrument charge shall exceed $25.00 or 5 percent
8-13 of the face amount of the instrument, whichever is
8-14 greater, except that the holder of the instrument may also
8-15 charge the maker an additional fee in an amount equal to
8-16 that charged to the holder by the bank or financial
8-17 institution as a result of the instrument not being
8-18 honored.
8-19 (k) An action under this Code section may be prosecuted by
8-20 the party initially receiving a worthless instrument or by
8-21 any subsequent holder in due course of any such worthless
8-22 instrument."
8-23 SECTION 2.
8-24 Said chapter is further amended by adding a new Article 9 to
8-25 read as follows:
8-26 16-9-140.
8-27 There is created the criminal offense of unlicensed
8-28 commercial loan sharking.
8-29 16-9-141.
8-30 (a) A person commits the offense of unlicensed commercial
8-31 loan sharking when such person as a lender makes ten or
8-32 more loan transactions in any period of 365 or fewer
8-33 consecutive days at a rate of interest in excess of that
8-34 specified in the criminal usury statute, Code Section
8-35 7-4-18.
8-36 (b) This Code section shall apply with respect to all
8-37 transactions in which the true purpose and intent of the
8-38 transaction are that one person lends or advances money
8-39 or credit to another person with the intention that the
8-40 money lent or advanced shall be repaid together with
-8-
9- 1 interest or any other charges for the use of the money or
9- 2 credit advanced. This Code section shall apply with
9- 3 respect to any such transaction notwithstanding the fact
9- 4 that one or more parties intend to disguise the nature of
9- 5 the transaction by means of any nomenclature or terms
9- 6 designed to make the transaction appear to be or resemble
9- 7 a transaction other than a loan. Without limiting the
9- 8 generality of the foregoing, any such transaction shall
9- 9 constitute a loan transaction for purposes of this article
9-10 notwithstanding the fact that the transaction is
9-11 denominated as a purchase, sale, lease, rental, check
9-12 cashing transaction, or other transaction.
9-13 16-9-142.
9-14 (a) Code Section 16-9-141 shall not apply to any
9-15 transaction made by a person who at the time of the
9-16 transaction is licensed or registered as or is acting as
9-17 an employee of a person licensed or registered as:
9-18 (1) A financial institution under Chapter 1 of Title 7,
9-19 the 'Financial Institutions Code of Georgia';
9-20 (2) A person subject to Article 13 of Chapter 1 of Title
9-21 7, the 'Georgia Residential Mortgage Act';
9-22 (3) A licensee under the 'Georgia Industrial Loan Act,'
9-23 Chapter 3 of Title 7; or
9-24 (4) A credit card bank or domestic lender under Chapter
9-25 5 of Title 7, 'The Credit Card and Credit Card Bank
9-26 Act';
9-27 (b) Code Section 16-9-141 shall not apply to any
9-28 transaction which is lawful under:
9-29 (1) 'The Retail Installment and Home Solicitation Sales
9-30 Act,' Article 1 of Chapter 1 of Title 10;
9-31 (2) The 'Motor Vehicle Sales Finance Act,' Article 2 of
9-32 Chapter 1 of Title 10;
9-33 (3) Part 5 of Article 3 of Chapter 12 of Title 44,
9-34 relating to pawnbrokers.
9-35 (c) The exemptions from Code Section 16-9-141 provided
9-36 under this Code section shall not exempt any person or
9-37 transaction from any other law of this state, including
9-38 without limitation Code Section 7-4-18, to the extent that
9-39 any such other law is applicable without regard to this
9-40 Code section. The General Assembly recognizes and intends
-9-
10- 1 that actions which would violate Code Section 16-9-141 but
10- 2 for this Code section may also violate and be punished or
10- 3 sanctioned as violations of other laws of this state, and
10- 4 no such other punishment or sanction shall be abated by
10- 5 reason of this Code section.
10- 6 16-9-143.
10- 7 The administrator appointed under Code Section 10-1-395
10- 8 shall have the authority to investigate any complaints
10- 9 regarding unlicensed commercial loan sharking. In
10-10 conducting such investigations, the administrator shall
10-11 have all investigative powers which are available to the
10-12 administrator under Part 2 of Article 15 of Chapter 1 of
10-13 Title 10, the 'Fair Business Practices Act of 1975.'
10-14 16-9-144.
10-15 The Attorney General shall have the authority to conduct
10-16 the criminal prosecution of all cases of unlicensed
10-17 commercial loan sharking or to refer them to the district
10-18 attorney in the county where the crime was committed.
10-19 16-9-145.
10-20 In any criminal proceeding brought pursuant to this
10-21 article, the crime shall be considered to have been
10-22 committed in any county in which any part of the
10-23 unlicensed commercial loan sharking took place, regardless
10-24 of whether the defendant was ever actually in such county.
10-25 16-9-146.
10-26 A violation of this article shall be punishable by
10-27 imprisonment for not less than one nor more than ten years
10-28 or by a fine not to exceed $1,000.00 for each proven
10-29 unlawful loan transaction which is a part of the offense
10-30 or by both such imprisonment and fine.
10-31 16-9-147.
10-32 In addition to being punished as provided in Code Section
10-33 16-9-146, a person found guilty of commercial loan
10-34 sharking may be ordered by the court to make restitution
10-35 to victims of all illegal interest and charges.
10-36 16-9-148.
10-37 A person who violates this article shall be civilly liable
10-38 to each person from whom illegal interest or charges have
10-39 been collected for three times the amount of the illegal
10-40 interest and charges. A civil action under this Code
-10-
11- 1 section may be brought by an individual borrower or on
11- 2 behalf of an ascertainable class of borrowers."
11- 3 SECTION 3.
11- 4 This Act shall become effective on the first day of the
11- 5 month following the month in which this Act is approved by
11- 6 the Governor or becomes law without such approval; and this
11- 7 Act shall apply with respect to loan transactions wherein
11- 8 money or credit is loaned or advanced on or after that
11- 9 effective date.
11-10 SECTION 4.
11-11 All laws and parts of laws in conflict with this Act are
11-12 repealed.
-11-
Clerk of the House
Robert E. Rivers, Jr., Clerk
Last Updated on 03/14/00
