Supreme Court of Georgia.
GLENN v. Their State.
Dunlap v. Their State.
Appellants Nathaniel Glenn and John Dunlap challenged the constitutionality of OCGA В§ 16-17-1 et seq. (вЂњthe ActвЂќ), when they had been faced with breaking OCGA В§ 16-17-2, which forbids the generating of вЂњpayday loans,вЂќ i.e., loans of $3,000 or less with unlawful rates of interest. 1 See USA payday advances Advance Centers v. Oxendine, 262 Ga.App. 632, 633, 585 S.E.2d 924 (2003) (вЂњ вЂpayday loan is a loan of brief period, typically a couple of weeks, at an astronomical yearly rate of interestвЂ™ вЂќ). Very first time violators of OCGA В§ 16-17-2 are bad of a misdemeanor of a top and nature that is aggravated. Id. at (d). Appellants had been both convicted of numerous violations of OCGA В§ 16-17-2 2 and they appeal, contending that the test court erred by rejecting their equal protection and vagueness challenges to your Act. For the good reasons that follow, we affirm.
1. Appellants contend that OCGA В§ 16-17-2 denies them equal security associated with legislation given that it grants explicit exemptions to out-of-state banks which make pay day loans in Georgia 3 therefore the neighborhood agents of these out-of-state banking institutions, whenever running under specific defined economic circumstances, 4 thus dealing with out-of-state banking institutions differently than in-state residents. To prevail to their equal security challenge, appellants have actually the responsibility of showing initially they are likewise situated to your out-of-state banks accorded the various therapy. See Farley v. State, 272 Ga. 432, 433, 531 S.E.2d 100 (2000). Appellants cannot make that showing. We concur with the State that appellants aren’t likewise situated using the out-of-state banking institutions designated in OCGA В§ 16-17-2(a)(3) because appellants, as in-state loan providers, are at the mercy of Georgia statutes managing or limiting interest that is high on loans, whereas the out-of-state banking institutions are not. See 12 USC В§ 1831d (a) (bank may, вЂњnotwithstanding any State constitution or statute which can be hereby preempted when it comes to purposes with this part,вЂќ fee interest at price permitted by state where bank is chartered). This situation is therefore distinguishable from the instance on which appellants rely, Ciak v. State, 278 Ga. 27(1), 597 S.E.2d 392 (2004), which involved a statute dealing with likewise situated motorists differently.
Even in the event appellants had been likewise situated, вЂњ[a]n equal protection challenge is examined beneath the вЂrational relationshipвЂ™ test when [as here] neither a suspect course nor a simple right is afflicted with the statute that is challenged. [Cit.]вЂќ Adore v. State, 271 Ga. 398, 400(1), 517 S.E.2d 53 (1999). Under that test, the legislative classification produced by OCGA В§ 16-17-2(a) can withstand constitutional attack once the category is founded on rational distinctions and bears a primary and genuine regards to the genuine item or reason for the legislation. See Roberts v. Burgess, 279 Ga. 486(1), 614 S.E.2d 25 (2005). In light associated with protected status of out-of-state banking institutions under Federal legislation, we conclude that the Legislature possessed a logical foundation for producing a course considering those in-state payday loan providers that are at the mercy of State legislation so we hold that the category bears a clear and direct regards to the legitimate purposes regarding the legislation since set forth in OCGA В§ 16-17-1(c), (d) (deterring unlawful, unconscionable payday lending in Georgia due to the unfavorable impact on the residents with this State).
Consequently, the test court did not err by denying appellants’ equal security challenge into the Act.
2. Appellants additionally assert the Act is unconstitutionally obscure given that it will not especially prohibit the lending that is particular appellants used, specifically, attempting to sell вЂњland choices with rebatesвЂќ (appellant Glenn) and вЂњcashing checksвЂќ (appellant Dunn). We find no merit in this contention. The Legislature expressly recognized that вЂњvarious payday lenders have actually developed specific schemes and practices so that you can try to disguise these transactions,вЂќ OCGA В§ 16-17-1(c), and appropriately defined the prohibited conduct in a way to encompass every one of the creative ways payday loan providers might used to steer clear of the Act. 5 вЂњEven though a statute can be marked by вЂ вЂњflexibility and reasonable breadth, in place of careful specificity,вЂќ ‘if it really is nevertheless вЂclear just just just what the [statute] in general prohibits,вЂ™ the statute just isn’t unconstitutionally vague. [Cit.]” Rozier v. State, 259 Ga. 399, 400(1), 383 S.E.2d 113 (1989). See additionally State v. Old South Amusements, 275 Ga. 274, 276, 564 S.E.2d 710 (2002) (Legislature not necessary to draft statutes with mathematical accuracy). We discover the Act’s prohibition against pay day loans, in whatever kind transacted, adequately definite to fulfill due procedure criteria. 6
3. The data adduced during the work work work bench test amply authorized the trial court to locate beyond a doubt that is reasonable appellants had been bad of breaking OCGA В§ 16-17-2(a). Jackson v. Virginia, 443 U.S. 307, 99 S.Ct. 2781, 61 L.Ed.2d 560 (1979).
1. OCGA В§ 16-17-2(a) provides that it’s вЂњunlawful for just about any individual to take part in any continuing company, in whatever kind transacted, вЂ¤ which consists in entire or in element of making, providing, organizing, or acting as a representative into the generating of loans of $3,000.00 or less,вЂќ unless the loans are otherwise allowed or legal under one of several exceptions established in OCGA В§ 16-17-2(a)(1)-(4).
2. Appellant Glenn had been faced with 49 misdemeanor violations of OCGA В§ 16-17-2; appellant Dunlap had been faced with 46 such violations. Both had been faced with one RICO breach each based on the illegal loan that is payday. The trial court denied their constitutional challenges towards the Act and, following a work work work bench test, discovered appellants bad on all counts and sentenced them to fifteen years probation in the felony RICO count and 12 months probation (concurrent towards the RICO fee but consecutive every single other) for each illegal pay day loan count.
3. OCGA В§ 16-17-2(a)(3) exemptsa bank or thrift payday loans NH chartered beneath the regulations for the united states of america, a bank chartered beneath the legislation of some other state and insured by the Federal Deposit Insurance Corporation, or a charge card bank [when the enumerated entity] is maybe maybe not running in violation associated with federal and state legislation relevant to its charter.
4. Entities exempt under OCGA В§ 16-17-2(a)(3) may legitimately make payday advances in Georgia through a neighborhood agent supplied that the representative isn’t the вЂњde factoвЂќ lender, since established where вЂњthe entire circumstances associated with the transaction reveal that the purported representative holds, acquires, or keeps a prevalent financial desire for the profits created by the mortgage.вЂќ OCGA В§ b that is 16-17-2(4).
5. Thus, the Legislature authorized test courts in OCGA В§ 16-17-6 to examine deals вЂњin their entirety so that you can figure out if there is any contrivance, unit, or scheme utilized by the lending companyвЂќ in order to avoid OCGA В§ 16-17-2(a).
6. Although appellants additionally assert within their enumeration that the statute is overbroad, they just do not help this contention with any citation or argument of authority and therefore it really is abandoned. Supreme Court Rule 22.