HB241: HB241 Contracts; convenience fees for payment by electronic means; revise provisions

Georgia law already lets lenders and merchants charge a nonrefundable convenience fee when someone pays a bill using a credit card, debit card, electronic funds transfer, or similar electronic method. This bill rewrites that law, O.C.G.A. section 13-1-15, to change how much can be charged and to add clearer definitions and rules. The bill defines 'actual cost' as what a lender pays a third party to process the electronic payment, and says that if the lender's own parent company processes the payment, that parent counts as the third party. It lets a lender or merchant charge a convenience fee based on actual cost, or instead charge an average cost for that type of payment, or a flat $5.00 fee, whichever amount is greater. The fee can only be charged if a free payment option, like check, cash, or money order, is also offered, and customers must be told the fee amount and that it is nonrefundable before they pay. The law applies only to specific types of loans and sales contracts listed in the bill, such as certain consumer loans, retail installment contracts, motor vehicle financing, and insurance premium finance agreements.

• Rewrites O.C.G.A. section 13-1-15 to redefine 'actual cost' for electronic payment processing, including treating a parent company as a third party if it processes payments for its subsidiary.
• Allows lenders and merchants to charge a convenience fee equal to actual cost, or alternatively an average cost for that payment type, or a flat $5.00 fee, whichever is greater.
• Requires that a fee-free payment option (check, cash, money order, or a no-fee electronic method) always be available before any convenience fee can be charged.
• Requires clear disclosure of the fee amount, its nonrefundable nature, and that it applies to electronic payment before the fee is imposed.
• Limits the law's application to specific contract types, including consumer loans, installment loans, retail installment and home solicitation sales contracts, motor vehicle sales financing, and insurance premium finance agreements.
• Clarifies that a convenience fee under this section does not count as interest, a finance charge, or a service charge under several other Georgia Code sections.

Lenders, retailers, and merchants that accept electronic payments for consumer loans, installment sales contracts, motor vehicle financing agreements, or insurance premium finance agreements, as well as the customers who make payments on these types of contracts using credit cards, debit cards, or other electronic methods.

Consumers paying certain loans or contracts electronically could see convenience fees calculated differently, potentially up to $5.00 even if actual processing costs are lower, but they must still be offered a free payment method and told about the fee in advance before being charged.

• Section 1 revises O.C.G.A. section 13-1-15(a) to define 'actual cost' and 'payment by electronic means,' including treating a parent company as a third party processor.
• Subsection (b) sets the convenience fee at actual cost, or alternatively at an average cost for that payment type or a flat $5.00, whichever is greater.
• Subsection (c) requires that a free payment option (check, cash, money order, or no-fee electronic payment) be offered before any convenience fee can be charged.
• Subsection (d) requires disclosure of the fee amount, its nonrefundable status, and that it applies to electronic payments, before the fee is imposed.
• Subsection (e) limits the law to specific contract types under Titles 7, 10, and 33 and clarifies the fee is not interest or a finance charge under listed Code sections.
• Subsection (f) clarifies that Code Section 7-4-18 does not override this convenience fee provision.
• Section 2 repeals conflicting laws.

1. 2025-05-14Effective Date 2025-07-01
2. 2025-05-14Act 305
3. 2025-05-14House Date Signed by Governor (House)
4. 2025-04-07House Sent to Governor (House)
5. 2025-03-27Senate Passed/Adopted (Senate)
6. 2025-03-27Senate Third Read (Senate)
7. 2025-03-18Senate Read Second Time (Senate)
8. 2025-03-13Senate Committee Favorably Reported (Senate)

• Trey Rhodes (R, HD-124)Primary sponsor
• Noel Williams (R, HD-148)
• Demetrius Douglas (D, HD-078)
• Johnny Chastain (R, HD-007)
• Carter Barrett (R, HD-024)
• Will Wade (R, HD-009)
• Shawn Still (R, SD-048)

1. PassedHouse voteFebruary 27, 2025

   160 yea, 3 nay (4 not voting, 13 absent)

   Passage: House Vote #107

2. PassedSenate voteMarch 27, 2025

   53 yea, 3 nay

   Passage: Senate Vote #301

• convenience fees
• consumer loans
• electronic payments
• contracts law
• insurance premium financing