Opinion ID: 794241
Heading Depth: 2
Heading Rank: 1

Heading: Cessation of Payday Loans and Servicing Agreements

Text: 18 The State's suggestion of mootness represents that as a result of the regulatory actions or activities of the FDIC, the Appellant banks have ceased making the type of payday loans at issue in this appeal and have withdrawn from the servicing agreements or agency relationships with the Appellant non-bank parties also at issue here. 19 Appellants do not contest the State's factual representations, and indeed, their written responses appear to concede them. For example, BankWest's response to the suggestion of mootness acknowledges that 20 the FDIC ... advised BankWest that it should exit the payday lending business unless it could immediately present to the FDIC a plan as to how it intended to satisfy the FDIC's stated concerns .... At this time, BankWest has elected not to pursue such a plan with the FDIC, and is effectively out of the classic payday lending business in Georgia .... 21 BankWest Response to Suggestion of Mootness at 7. Similarly, CSB's response states that [b]ecause of regulatory pressure from the FDIC unrelated to the merits of this case, the Bank is in the process of discontinuing its Payday Loan program . . . . CSB Response to Suggestion of Mootness at 2. 22 Likewise, County Bank's response states that 23 [i]n 2005, the FDIC issued its Guidelines on Payday Lending which became effective in July, 2005. As a result of these new federal rules that limited the number and duration of payday loans, County Bank made a determination that it was no longer profitable for County Bank to be involved with this type of lending. As of December 14, 2005, County Bank ceased offering payday loans and, as of December 31, 2005, County Bank ended its relationships with all of its loan servicers. 24 County Bank and Express Check Response to Suggestion of Mootness at 3-4. In the same vein, FBD's response states that [t]he State's suggestion of mootness with respect to ... [FBD] ... is based on a press release issued by FBD ... to the effect that the Bank has been forced by the [FDIC] to discontinue making `payday loans.' FBD Response to Suggestion of Mootness at 1. FBD does not contest that it issued the press release, which the State provided to this Court, or that it has stopped making the type of payday loans at issue here. 25 As we have already noted, this appeal involves a specific type of short-term loan program in Georgia, termed payday lending, that was conducted through a particular set of loan and servicing agreements. The amounts, terms, duration, and conditions of the short-term loans at issue and the extensive provisions of the servicing agreements formed the factual foundation of the preliminary injunction ruling in the district court and framed the issues on appeal. See BankWest, 324 F.Supp.2d at 1339-40; BankWest, 411 F.3d at 1292-96; BankWest, 411 F.3d at 1312-14 (Carnes, J., dissenting). 26 Given the recent developments and significant change in factual circumstances, including the complete collapse of the factual underpinning of the preliminary injunction ruling, we agree with the State that the present appeal from the preliminary injunction ruling no longer presents a justiciable controversy within the meaning of Article III of the Constitution. We now discuss the case-or-controversy constraint on our jurisdiction and then explain why we must dismiss this appeal as moot.