HB 1521: Ponzi Scheme Prevention Act; enact

Under current Georgia law, O.C.G.A. § 7-1-787 exempts certain financial institutions from state securities regulation. This bill repeals that exemption, meaning those institutions would no longer get automatic exclusion from Georgia's securities laws. The bill also adds a new section to Georgia's Uniform Securities Act of 2008 (O.C.G.A. § 10-5-6) stating that all promissory notes are presumed to be securities, and therefore subject to state securities regulation, unless they fall into specific listed categories such as consumer financing notes, home mortgages, short-term small business notes, unsecured character-based loans, accounts receivable notes, open account debt notes, or commercial bank operating loans. Notes outside those categories can still avoid being treated as securities if they can show they function similarly to one of the listed exceptions, based on factors like their commercial purpose, whether they are commonly traded for investment, public expectations, and other regulatory considerations. The bill does not include a stated effective date beyond standard enactment.

• Repeals O.C.G.A. § 7-1-787, removing an existing exemption from state securities regulation for certain financial institutions.
• Adds a new Code section (O.C.G.A. § 10-5-6) creating a presumption that all promissory notes are securities under Georgia law.
• Lists seven specific categories of notes, such as consumer financing notes and home mortgage notes, that are exempt from being treated as securities.
• Creates a rebuttable presumption test allowing other notes to avoid securities classification by showing they function like an exempt category, based on listed factors.

Financial institutions that previously relied on the repealed exemption, lenders and borrowers who use promissory notes, small businesses that take out short-term loans, banks issuing commercial operating loans, and state securities regulators who would apply the new presumption and factor test.

By treating most notes as securities unless they fit narrow exceptions, the bill could subject more lending arrangements to Georgia's securities disclosure and registration rules, potentially making it harder to disguise fraudulent lending schemes as ordinary loans while adding compliance considerations for lenders.

• Section 1 names the bill the Ponzi Scheme Prevention Act.
• Section 2 repeals O.C.G.A. § 7-1-787, which had exempted certain financial institutions from securities regulation.
• Section 3 adds O.C.G.A. § 10-5-6, presuming all notes are securities unless they fall into one of seven listed exceptions, including consumer financing and home mortgage notes.
• Section 3 also sets out a multi-factor test for notes not on the exception list to rebut the presumption by showing similarity in function to an exempt category.
• Section 4 repeals any conflicting laws.

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

• Tanya Miller (D, HD-062)Patrocinador principal
• 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
• banking law
• Ponzi schemes