Even though the language the federal statute uses is broad, the statute’s application is, the majority insists, “quite narrow.” Ante, at 1305. The majority lists all the activities of out-of-state banks that Congress did not specifically mention in § 27(a), which means under the “quite narrow” view that Georgia can regulate those activities into oblivion. The targetable activities that are left unprotected by the preemption clause of § 27(a), the majority insists, include “collateral activity associated with the loan, such as marketing, advertising, solicitation, or any aspect of the loan procurement process” and “collection practices,” and the matter of “separate contracts between out-of-state banks and in-state vendors.” Ante, at 1304.
So anemic are the provisions of the federal act under the majority’s “quite narrow” view that states can prohibit out-of-state banks from using in-state agents at all, because § 27(a) says “nothing about agents, much less in-state, non-bank agents of payday lender Canton out-of-state banks,” and because it “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.” Ante, at 1305 n. 25. In other words, the majority’s “quite narrow” view is that states may thwart the preemption clause of § 27(a) by regulating agency relationships or prohibiting preferred forms of them, and by going after the “collateral activity associated with” making loans, activities that are essential for an out-of-state bank to function in another state. See ante, at 1304 (emphasis omitted).
And that is what Georgia has done. The theory with which Georgia has cloaked its evasive purpose is that where the in-state agent has the predominant economic interest in a loan, which Georgia considers to be the right to more than fifty percent of the loan-generated revenues, the in-state agent is the actual lender, not the out-of-state bank. Code Ann. § 16-17-2(b) (4) (“A purported agent shall be considered a de facto lender if the entire circumstances of the transaction show that the purported agent holds, acquires, or maintains a predominant economic interest in the revenues generated by the loan.”); see also Ga.Code Ann. § 16-17-6. Georgia’s purpose is to get at the agent as a way of getting at the principal. Controlling a corporation’s agents controls the corporation, just as binding a man’s arms and legs binds the man.
Recognizing that, the state takes the position that federal rights of corporations may be conditioned, truncated, or abrogated by state laws so long as those laws are brought to bear on the agents through which the corporations act. And the majority has written that untenable position into the law of this circuit. Section 27(a) grants out-of-state banks the authority to make loans in Georgia at the interest rates they may charge in their charter states. The State of Georgia may no more prevent that authority from being exercised through in-state agents than it may prevent that authority from being exercised on even-numbered days.
If Georgia may do as it pleases to the in-state agents of out-of-state banks, then Georgia may do as it pleases to the out-of-state banks
Not content with gutting the preemption clause of the federal act, the majority also tries to soft-peddle the plain language of the Georgia Act to make it seem as though all the Act does is affect one little bitty aspect of the agency relationship between out-of-state banks and in-state agents. That is not the reality. The reality is that Georgia has acted to strip from out-of-state banks the right that § 27(a) gives them, if those banks structure their business in the way that they think best in light of business considerations and market forces. What Georgia has said is that the out-of-state banks Congress has specifically protected from state usury laws will not be protected by § 27(a) unless those banks quit doing business the way they prefer and start doing business the way the state prefers. And it just so happens that Georgia prefers that out-of-state banks covered by § 27(a) not do business in the way those banks have chosen to do it. What a coincidence.