USA Cash Advance Centers v. Oxendine

DECIDED: 1, 2003 august

Summary judgment. Fulton Superior Court. Before Judge Longer.

Troutman Sanders, William M. Droze, David M. Green, for appellants.

Thurbert E. Baker, Attorney General, Sidney R. Barrett, Jr., Isaac Byrd, Senior Assistant Attorneys General, Samantha M. Rein, Assistant Attorney General, for appellee.

United States Of America payday advances Advance Centers, American advance loan, Inc., EZ Credit, Inc., Fast money `Til Payday, Inc., Great American advance loan, Inc., Great American Credit, Inc., Monday `Til Payday, Inc., United States Of America pay day loan, Inc., United States Of America Payday Cash Advance Center #8, Inc., United States Of America payday advances Advance Center #9, Inc., United States Of America cash advance Center #10, Inc., United States Of America cash advance Center #11, Inc., United States Of America cash advance Center #12, Inc., United States Of America Payday Cash Advance Center #13, Inc., and United States Of America cash advance Center #14, Inc. Brought a judgment that is declaratory against John W. Oxedine, indiv motion for summary judgment was provided by the test court for Oxendine. Finding no mistake, we affirm.

In July of 2002, the Commissioner authorized an study of the loan that is”payday tasks of USA Payday Advance Centers. An administrative “show cause” order issued, and the plaintiffs were among the parties named in the order as a result of the examination. Following the hearing on October 11, 2002, the Commissioner discovered that the plaintiffs had been in breach associated with the Industrial Loan Act to make loans with no commercial loan permit plus in making false and misleading advertisments of loans; the Commissioner commanded them to stop and desist from making loans “except as permitted underneath the Georgia Industrial Loan Act. ” Plaintiffs had been charging you an interest that is annual of 650%. On October 22, 2002, the court that is superior plaintiffs’ benefit of your order. On 2, 2002, plaintiffs dismissed that appeal december.

The loans were now made by County Bank through them on December 3, 2003, plaintiffs filed this declaratory judgment action and alleged that they no longer made the loans but that, as “service providers” for County Bank. November 13, 2002, had been the date that is effective such start up business procedure to begin with. Plaintiffs advertised an exemption through the Georgia Industrial Loan work as agents for the bank that is out-of-state. Nevertheless, such provider contract, that has been alleged when you look at the verified pleadings, ended up being never placed into proof.

At that time that the declaratory judgment action had been brought, the Commissioner hadn’t determined whether or otherwise not to start a study into plaintiffs’ home based business arrangement with County Bank, considering that the Commissioner had no factual statements about this new arrangement and loans together with taken no place in regards to the brand new procedure.

The Commissioner relocated for summary judgment in the grounds that no “actual or controversy that is justiciable existed pertaining to plaintiffs’ brand brand new arrangement with County Bank and therefore there was indeed no ruling desired on plaintiffs’ brand brand new arrangement because of the Commissioner pursuant to their regulations allowing needs for declaratory rulings. Consequently, plaintiffs neglected to exhaust its administrative treatments ahead of looking for judicial action.

The Georgia Industrial Loan Act, loans under $3,000 or less come within the ambit of the Act under OCGA § 7-3-1 et seq. “a loan that is payday financing of brief extent, typically fourteen days, at an astronomical yearly interest rate. ” Smith v. Steinkamp, 318 F. 3d 775, 776-777 (7th Cir. 2003). Pay day loans are the existing form of “salary buying” or “wage buying. ” See Gunnels v. Atlanta Bar Assoc., 191 Ga. 366, 381(3) ( 12 S.E. 2d 602) (1940); Hinton v. Mack Publishing Co., 41 Ga. App. 823, 826 ( 155 INTERNET SEARCH ENGINE 78) (1930). The charges, fees, and interest on a quick payday loan are between 15% and 30% for the principal for a loan that is two-week constituting a pretext for usury. Cashback Catalog deals, Inc. V. Price, 102 F. Supp. 2d 1375, 1380 (S.D. Ga. 2000); see also Greenberg v. Commonwealth, 255 Va. 594 ( 499 S.E. 2d 266) (1998); White v. Always check Holders, Inc., 996 S.W. 2d 496 (Ky. 1999). Considering that the Georgia Industrial Loan Act had been enacted to “define and avoid usury” and also to provide a way to obtain regulated funds “for folks who was indeed borrowing at usurious prices from loan sharks, road shylocks and wagebuyers, ” then such financial transactions come inside the jurisdiction regarding the Act. Consequently, the Industrial Loan Commissioner has jurisdiction over “wage-buyers. ” OCGA § 7-37-1 et seq.; 1954-56 Op. Att’y Gen. At pp. 385-386. Then”payday loans” violate the Georgia Industrial Loan Act if the maximum interest rate is over the limit set by OCGA § 7-3-14 of 10% or the lender fails to hold an industrial license issued by the Commissioner. See 2002, Op. Att’y Gen. No. 2002-3.

Freeman v. Decatur Loan Finance Corp., 140 Ga. App. 682, 685 ( 231 S.E. 2d 409) (1976).

So as to circumvent state usury guidelines, some payday loan providers have contracted with federally chartered banking institutions or state chartered banks insured by the FDIC to make use of federal banking guidelines that enable such banking institutions in order to make loans across state lines without respect to that state’s interest and usury laws in “rent-a-charter” or “rent-a-bank” contracts. See State of Colorado ex rel. Salazar v. ACE money Express, Inc., 188 F. Supp. 2d 1282, 1285-1286 (D. Colo. 2002); very Long v. ACE money Exp., 2001 U.S. Dist. Lexis 24617 (M.D. Fla. 2001); Goleta Nat’l Bank v. Lingerfelt, 211 F. Supp. 2d 711 (E.D.N.C. 2002). Whether it has taken place in this instance and if it is genuine or perhaps a simple subterfuge meant to circumvent Georgia usury laws and regulations may not be reached in this instance, considering that the plaintiffs did not exhaust administrative treatments also to place the contract with County Bank into proof.

Underneath the separation of capabilities beneath the Georgia Constitution, the judicial branch does not have jurisdiction to cope with an executive branch function until there is an fatigue of administrative treatments, for example., the executive branch does not have any further remedy. The particular legislative empowerment for judicial breakdown of executive action is strictly followed. Perkins v. Dep. Of medical attention, 252 Ga. App. 35, 36-38(1) ( 555 S.E. 2d 500) (2001). The explanation is the fact that “resort into the process that is administrative enable the agency to use its expertise, protect the agency’s autonomy, enable a far more efficient quality, and end in the consistent application of things in the agency’s jurisdiction. ” Cerulean Co., Inc. V. Tiller, 271 Ga. 65, 67(1) ( 516 S.E. 2d 522) (1999). A plaintiff “is forbidden from doing by indirection that which it really is forbidden from doing straight, i.e., bypassing the fatigue of administrative appeals. ” (Citations omitted. ) Perkins v. Dept. Of medical attention, supra at 38.

Long-standing Georgia legislation requires that an event aggrieved by a situation agency’s choice must raise all dilemmas before that agency and exhaust available administrative treatments before looking for any review that is judicial of agency’s choice. So long as there was a successful and available remedy that is administrative a celebration is needed to pursue that treatment before looking for equitable relief in superior court.

Cerulean Co., Inc. V. Tiller, supra at p. 66. Subsequently,

An action for declaratory judgment won’t be amused where in fact the liberties for the events have previously accrued together with plaintiff faces no threat of using future undirected action. In which a statute provides a celebration with an easy method of review by the administrative agency, such procedure is usually a sufficient treatment at legislation in order to preclude the grant of equitable relief.