In expanding the plain language of § 27(a), the dissent uses these two theories: that restricting an in-state agent is a way «of getting at the principal» and that Georgia may not indirectly restrict the authority that § 27(a) gives out-of-state banks by directly restricting the actions of in-state agents. In our view, these theories implicitly recognize that the Georgia Act does not directly encroach upon the authority granted by § 27(a). They also support our conclusion that the plain language of § 27(a) does not reach the conduct regulated by the Georgia Act. Indeed, the language of § 27(a) says nothing about the loan procurement or collection practices by agents and nothing about agents, much less in-state, non-bank agents of out-of-state banks. Instead, § 27(a) directly restricts only interest-rate limitations and cannot be so expanded to cause indirect preemption of the agency agreement between in-state entities, such as payday stores, and out-of-state banks.
The Jenkins Court addressed a situation in which the borrower and the national bank has signed an Arbitration Agreement stipulation that all disagreements were governed by the Federal Arbitration Act
The fuller argument is that it is logical to read the «any person» language in subsection (d) in a consistent manner; that is, because an out-of-state bank is not «any person» for the purposes of the first or last sentence in subsection (d), an out-of-state bank should not be considered «any person» in the third sentence of subsection (d). It arguably makes little sense to grant an exemption for direct liability to out-of-state banks in § 16-17-2(a) (3), again in § 16-17-2(b), and even in the first and last sentences of § 16-17-2(d), only to take it away as an aider or abettor in subsection (d) because that one sentence did not repeat the exception. Given the blanket exceptions in both §§ 16-17-1(a) and 16-17-2(a) (3), and the statutory framework of § 16-17-2(d), the argument is that out-of-state banks may not be prosecuted under even the aid-and-abet sentence in § 16-17-2(d)
As of this point, out-of-state banks are well aware of the rules for selecting agents in Georgia — you may select any independent, non-bank agent you wish as long as you do not allow the agent to hold the predominate economic interest in the loan. Indeed, upon the enactment of this agency rule, the out-of-state banks and payday stores promptly filed this lawsuit. Should an out-of-state bank now elect to procure its payday loans through prohibited agency agreements and violate this simple, straight-forward agency rule, then the payday loans procured in this prohibited manner are void.
In Jenkins v. First Am. Cash Adv. of Ga., 400 F.3d 868 (11th Cir. 2005), this Court addressed a situation in which a borrower in Georgia brought a class action against two national banks, raising state law claims challenging payday loan agreements. This Court determined that the arbitration agreements in payday loans by national banks were not unconscionable, and, thus, were enforceable. Id. at 881.
More importantly, the Georgia Act at the outset, in § 16-17-1(a), defines payday lenders and payday lending for the purposes of the Act and exempts out-of-state banks from both definitions
In Jenkins, the appellant payday loan store Lima OH also argued that the «underlying payday loan contracts are illegal and void ab initio under Georgia law.» Id. This Court concluded that because the Arbitration Agreements were valid, the underlying legality of the payday lending transactions was «an issue for an arbitrator, not the court, to decide.» Id. at 882.
Because we conclude that the plaintiffs do not have standing to challenge the arbitration provisions in the Georgia Act, we need not determine what import Jenkins has on those provisions.