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It does not mention collection practices associated with the loan

It does not mention collection practices associated with the loan

As a result, any understanding of the scope of a pre-emption statute must rest primarily on a fair understanding of congressional purpose. Congress’ intent, of course, primarily is discerned from the language of the pre-emption statute and the “statutory framework” surrounding it. Also relevant, however, is the structure and purpose of the statute as a whole, as revealed not only in the text, but through the reviewing court’s reasoned understanding of the way in which Congress intended the statute and its surrounding regulatory scheme to affect business, consumers, and the law.

In these cases, our task is to identify the domain expressly pre-empted, because an express definition of the preemptive reach of a statute supports a reasonable inference that Congress did not intend to pre-empt other matters. Because federal law is said to bar state action in a field of traditional state regulation . we work on the assumption that the historic police powers of the States are not to be superseded by the Federal Act unless that is the clear and manifest purpose of Congress.

Lorillard Tobacco, 533 U.S. at 541-42, 121 S. Ct. at 2414 (internal quotation marks, citations, and punctuation omitted). We now turn to the language of § 27(a).

Indeed, it is not disputed that state consumer protection and fraud laws may regulate an out-of-state-bank’s activities associated with its loan

According to the plain language of § 27(a), the domain of law expressly preempted by § 27(a) are state laws which prohibit:

The language of § 27(a) refers only to state banks, and does not address non-bank businesses, such as payday stores, at all.

Even as to “any” loan of state banks, the language of § 27(a) does not mention any other element or term of the loan other than interest rates. Importantly, it does not mention any collateral activity associated with the loan, such as marketing, advertising, solicitation, or any aspect of the loan procurement process. Further, nothing in § 27(a) regulates separate contracts between out-of-state banks and in-state vendors to which the borrower is not even a party (such as the agency agreements here). The apparent clarity of § 27(a)’s language is, at least, important evidence of legislative intent.

So while an out-of-state bank in Georgia clearly can make a payday loan at a 500% APR, the State of Georgia, nonetheless, may regulate an out-of-state bank’s procurement and collection practices in Georgia. See 12 U.S.C. § 1820(h) (1) (A).

In the same vein, the language of § 27(a) does not mention in-state, non-bank agents or agents at all, or expressly permit out-of-state banks to use any in-state business or person it happens to select as an agent. For example, Georgia has the right to require payday stores to be licensed and out-of-state banks could not use an in-state agent who is not licensed to do business in Georgia. Nothing in § 27(a) seeks to regulate the entirely separate agency contracts entered into between out-of-state banks and payday stores. Instead, the scope of § 27(a) is quite narrow and restricted to one element of any loan by out-of-state banks: the interest rate. 23

There is no language in § 27(a) addressing which local, non-bank vendors may properly act as agents in loan transactions or under what circumstances local, non-bank vendors may so act

The next question is whether the Georgia Act falls within the above preemptive scope of § 27(a). The Act contains a severability provision, and thus we proceed section-by-section through the Act. 24

Obviously, § 27(a) expressly preempts certain state legislation. For example, if Georgia had enacted legislation that said “out-of-state banks cannot charge interest rates on any loan greater than Georgia’s 16% cap,” we would have no difficulty determining that such state legislation was expressly preempted by § 27(a).

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