The Act contains another provision that refers to arbitration. Specifically, the aiding or abetting provision of § 16-17-2(d) mandates that „any arbiter or arbitration company“ that aids or abets a violation of the Act will be subject to sanctions under the Act.
It is not clear from the Georgia Act what action by an arbitrator would amount to aiding or abetting a violation of the Act, nor is it apparent why the Georgia General Assembly saw fit to specially include arbitrators in the aiding or abetting provision. Although we question the validity of a regulation that would subject an arbitrator to liability merely for deciding a payday loan dispute in accordance with the arbitration clause in a payday loan contract, we need not decide that issue, because neither the out-of-state banks nor the payday stores are arbitrators.
The plaintiffs in this case will never be prosecuted or sued as arbitrators for acting in contravention of the Act. v. Citizens for a Better Env’t, 523 U.S. 83, 103, 118 S. Ct. 1003, 1016, 140 L. Ed. 2d 210 (1998), nor have they alleged facts sufficient to stand in the place of the arbitrators. See Powers v. Ohio, 499 U.S. 400, 410-11, 111 S. Ct. 1364, 1370-71, 113 L. Ed. 2d 411 (1991) (holding that in order for a litigant to bring an action on behalf of a third party, the litigant must demonstrate that (1) he has „suffered an `injury in fact,‘ thus giving him or her a `sufficiently concrete interest‘ in the outcome of the issue in dispute“; (2) he has „a close relation to the third party“; and (3) there is „some hindrance to the third party’s ability to protect his or her own interests“ (internal citations omitted)). In short, the out-of-state banks and payday stores lack standing to challenge the arbitration provisions.
The majority opinion attempts to paint this case as one in which a bunch of cunning cash advance stores have purchased the authority of out-of-state banks as part of their scheme to get around Georgia’s usury laws
For all the above reasons, we conclude the district court did not abuse its discretion in denying a preliminary injunction.
Congress enacted a statute providing that any state-chartered bank may „charge on any loan . . . interest . . . at the rate allowed by the laws of the State . . . where the bank is located.“ 12 U.S.C. § 1831d(a). Everyone agrees Congress intended to ensure that the maximum interest rate a bank like BankWest, which is chartered in South Dakota, can charge on loans made in another state is the higher rate permitted under South Dakota law, not the lower rate that the other state prefers. To prevent states from interfering with the right to charge higher interest rates that it created, Congress explicitly provided that the right exists „notwithstanding any State constitution or statute which is hereby preempted for the purposes of this section.“ Id. Congress probably thought that using broad language to create the federal right and inserting a clear and unequivocal preemption clause to protect that right from state interference would be enough. If so, it underestimated the State of Georgia’s determination to evade federal law and the willingness of this Court to permit states to do so.
The out-of-state banks and payday stores argue that § 16-17-2(d) is preempted by the FAA because it is „repugnant“ to the FAA
In this picture, BankWest and other out-of-state banks are not real players but instead only passive pawns that lease their charters to the cash advance stores; those stores are actually the lenders, perform all the critical functions, carry most of the risk, and to use the majority’s phrase „effectively do all the work.“ Ante, at 1294. That’s not a pretty picture, but neither is it one the record in this case supports.