HB1521: HB1521 Ponzi Scheme Prevention Act; enact

Currently, Georgia law (O.C.G.A. § 7-1-787) exempts certain financial institutions from securities regulation, and there has been ambiguity over whether promissory notes count as securities subject to Georgia's securities law, the Georgia Uniform Securities Act of 2008. This bill, called the Ponzi Scheme Prevention Act, removes that exemption entirely by repealing and reserving Code Section 7-1-787, meaning the exemption no longer applies. The bill also adds a new Code section, O.C.G.A. § 10-5-6, creating a legal presumption that all notes are securities unless they fall into a list of exceptions, such as consumer financing, home mortgages, small business notes, unsecured loans based on trust in a customer's credit, or bank loans for current operations. Notes not on the list can still avoid being treated as securities if they can show they function similarly to an exempted type, based on factors like their purpose, whether they are commonly traded, and public expectations. The bill repeals conflicting laws and does not state a specific effective date beyond the standard process.

• Repeals and reserves O.C.G.A. § 7-1-787, removing an exemption from securities regulation that certain financial institutions previously had.
• Adds a new Code section (O.C.G.A. § 10-5-6) creating a legal presumption that all promissory notes are securities under Georgia's securities law.
• Lists seven categories of notes, such as consumer financing notes and home mortgages, that are exempt from being presumed securities.
• Allows a note outside those categories to rebut the presumption of being a security by showing it functions similarly to an exempted note.
• Directs that factors like trading for speculation, the note's purpose, and public expectations be weighed when deciding if a note is similar to an exempt type.
• Repeals any other Georgia laws that conflict with these changes.

The bill affects financial institutions that previously relied on the securities exemption under O.C.G.A. § 7-1-787, businesses and individuals who issue or hold promissory notes, lenders such as commercial banks, small businesses using short-term notes, and state securities regulators enforcing the Georgia Uniform Securities Act of 2008.

By presuming most notes are securities, the bill would subject more financial arrangements to Georgia's securities registration and disclosure rules, potentially making it harder to disguise fraudulent lending schemes as ordinary loans while adding compliance considerations for legitimate lenders and note issuers.

• Section 1 gives the bill the short title "Ponzi Scheme Prevention Act."
• Section 2 repeals and reserves O.C.G.A. § 7-1-787, eliminating the securities regulation exemption for certain financial institutions.
• Section 3 creates O.C.G.A. § 10-5-6, establishing that all notes are presumed securities unless they meet one of seven listed exceptions, including consumer financing, home mortgages, and bank loans for current operations.
• Section 3 also allows a note not on the exempt list to rebut the presumption by showing it functions similarly to an exempt note, based on factors like trading patterns and public expectations.
• Section 4 repeals all laws in conflict with the Act.

1. 2026-03-10House Second Readers (House)
2. 2026-03-09House First Readers (House)
3. 2026-03-06House Hopper (House)

• Tanya Miller (D, HD-062)Primary sponsor
• Saira Draper (D, HD-090)
• Derrick Jackson (D, HD-068)
• Lisa Campbell (D, HD-035)
• Anne Westbrook (D, HD-163)

• securities regulation
• financial fraud prevention
• promissory notes
• financial institutions
• consumer protection