Independent Finance Institute v. Clark, 89,504.

• Decision Date: 11 May 1999
• Docket Number: No. 89,504.,89,504.
• Parties: INDEPENDENT FINANCE INSTITUTE, et al. Plaintiffs/Appellees, v. Earl CLARK, Acting Administrator, Oklahoma Department of Consumer Credit, and the Oklahoma Department of Consumer Credit, Defendants/Appellants.
• Court: Oklahoma Supreme Court

990 P.2d 845

1999 OK 43

INDEPENDENT FINANCE INSTITUTE, et al. Plaintiffs/Appellees, v. Earl CLARK, Acting Administrator, Oklahoma Department of Consumer Credit, and the Oklahoma Department of Consumer Credit, Defendants/Appellants.

No. 89,504.

Supreme Court of Oklahoma.

May 11, 1999.

As Amended on Denial of Rehearing November 4, 1999.

John B. Gelders, Richard A. Grimes, Harold D. Stratton, Jr., James A. McCaffrey, Melvin R. McVay, Jr., Sandy L. Schovanec, Phillips McFall McCaffrey, Oklahoma City, Oklahoma, For Plaintiffs/Appellees,

W.A. Drew Edmondson, Attorney General of Oklahoma, Walter W. Jenny, Jr., Assistant Attorney General Oklahoma City, Oklahoma, For Defendants/Appellants.

¶ 1 KAUGER, J

¶ 2 In 1969, the Oklahoma Legislature enacted the Oklahoma Consumer Credit Code, (the Code) 14A O.S.1991 §§ 1-101 et seq. This first impression question concerns the regulation and refinancing of supervised loans and supervised lenders under the Code. Supervised loans are consumer loans in which the rate of the loan finance charge exceeds ten percent per year.¹ Supervised lenders are persons who make supervised loans.²

¶ 3 Title 14A O.S.1991 § 3-508A³ of the Code covers large supervised loans and allows lenders to contract for a loan finance charge when making a loan. Section 3-508B⁴ of the Code deals with small supervised loans which are limited to no more than $640.00. Section 3-508B permits lenders to collect an acquisition charge and an installment account handling charge when making a loan under this section in lieu of the lower loan finance charges which are available to large lenders under § 3-508A.

¶ 4 Title 14A O.S.1991 § 3-205 of the Code, which governs refinancing of consumer loans, provides that refinancing charges for supervised loans are limited pursuant to "the provision on loan finance charge for supervised loans (Section 3-508)."⁵ Although Oklahoma's version of the Uniform Code contains a § 3-508A and a § 3-508B, it has no § 3-508. Because the statute as enacted referred to a non-existent § 3-508,⁶ apparently in an attempt to clear up confusion, the publisher of the 1969 Session Laws added a footnote to the statute indicating that the reference to § 3-508 "[s]hould read Section 3-508A" when it published the statute. Accordingly, the dispositive issue presented⁷ is whether lenders who refinance supervised loans are restricted by the finance charges set forth in 14A O.S.1991 § 3-508A or § 3-508B.⁸ We hold that because of the strictures of 14A O.S.1991 § 3-205,⁹ lenders who refinance supervised loans, whether initially made under either § 3-508A or § 3-508B, are limited to assessing loan finance charges permitted by § 3-508A.

FACTS

¶ 5 Since the Oklahoma Consumer Credit Code's adoption in 1969, the Oklahoma Department of Consumer Credit, (the Department) had allowed supervised lenders to refinance supervised loans and charge fees assessed under either § 3-508A¹⁰ or § 3-508B,¹¹ depending on which statute the loan was initially made.

¶ 6 On August 1, 1996, the appellant, the Administrator of the Department, requested a formal opinion from the Attorney General asking for a determination of whether it had been properly enforcing § 3-205 insofar as the refinancing of supervised loans was concerned. On February 20, 1997, in response to the inquiry,¹² the Attorney General issued Opinion No. 96-84, finding that lenders who issue loans under § 3-508B may not impose the same finance charges allowed under § 3-508B when refinancing loans. The opinion held that pursuant to 14A O.S.1991 § 3-205, lenders are limited to assessing charges permitted under § 3-508A when refinancing a § 3-508B loan.¹³ After the Attorney General's opinion, the Administrator notified lenders that enforcement of the opinion would not begin until March 3, 1997.

¶ 7 After receiving the Administrator's letter, the Independent Finance Institute and twenty-seven lenders, filed an action in the district court of Oklahoma County on February 27, 1997. The cause was brought pursuant to the declaratory judgment provision of the Oklahoma Administrative Procedures Act, 75 O.S.1991 § 306.¹⁴ The lenders argued that the Department's twenty-seven year interpretation of the statute controlled, and that they should be allowed to continue to refinance loans and charge fees assessed under § 3-508B rather than being confined to the limits of § 3-508A. They sought a permanent injunction and a temporary restraining order to restrain the Department from implementing the Attorney General's opinion. The next day, the district court issued a temporary restraining order, prohibiting the Department from implementing or acting upon the Attorney General opinion.

¶ 8 On March 7, 1997, the Oklahoma Small Loan Association and three additional lenders intervened and joined in the lawsuit. The trial court entered a declaratory judgment on April 30, 1997, and it issued a permanent injunction finding that the Code permits lenders to contract and receive finance charges permitted under 14A O.S.1991 § 3-508B when refinancing, consolidating, or making advances under loans originally made under § 3-508B.¹⁵ On May 30, 1997, the Administrator, on behalf of the Department sought review of the trial court's declaratory judgment.

¶ 9 BECAUSE OF THE STRICTURES OF 14A O.S.1991 § 3-205, LENDERS WHO REFINANCE SUPERVISED LOANS, WHETHER INITIALLY MADE UNDER EITHER § 3-508A OR § 3-508B, ARE LIMITED TO ASSESSING LOAN FINANCE CHARGES PERMITTED BY 14A O.S.1991 § 3-508A. HOWEVER, THE LEGISLATURE AMENDED §§ 3-205 AND 3-508B IN MAY OF 1997. THE AMENDED VERSION OF § 3-205, WHICH BECAME EFFECTIVE ON AUGUST 29, 1997, SPECIFICALLY REFERS TO § 3-508A AND EXCLUDES § 3-508B, WHILE § 3-508B NOW INCLUDES ITS OWN REFINANCING PROVISIONS, AND PROVIDES FOR REBATES OF CHARGES UPON REFINANCING.

¶ 10 Section 3-508A¹⁶ of the Oklahoma Consumer Credit Code, allows lenders to contract for a loan finance charge when making a loan under this section. Section 3-508B¹⁷ permits lenders to collect an acquisition charge and an installment account handling charge when making a loan under this section in lieu of the lower loan finance charges which are available to large lenders under § 3-508A. Sections 3-205, 3-206, and 3-208 of the Code govern refinancing, consolidation, or other advances of supervised loans, respectively.¹⁸ This controversy centers around supervised loan refinancing.¹⁹

¶ 11 Section 3-205 provides in pertinent part:

"With respect to a consumer loan, refinancing, or consolidation, the lender may by agreement with the debtor refinance the unpaid balance and may contract for and receive a loan finance charge based on the principal resulting from the refinancing at a rate not exceeding that permitted by the provisions on loan finance charge for consumer loans (Section 3-201) or the provisions on loan finance charge for supervised loans (Section 3-508),1 whichever is appropriate.

. . .

1 Should read "(Section 3-508A)"" (Emphasis supplied.)

¶ 12 It is undisputed that Oklahoma's version of the Uniform Code does not contain a § 3-508, and that the publisher of the 1969 Session Laws added a footnote to the statute indicating that the reference to § 3-508 "[s]hould read Section 3-508A."²⁰ In contravention of its long-standing policy, the Department asserts that the Attorney General's opinion is correct and that when refinancing a small supervised consumer loan made under the provisions of § 3-508B, lenders are limited to assessing the loan finance charges permitted by § 3-508A. The lenders argue that the Department's twenty-seven year interpretation of the statute is controlling and that lenders are allowed to refinance loans and charge fees assessed under § 3-508B, rather than being confined to the limits of § 3-508A.²¹

¶ 13 We disagree with the lender's contention. Generally, construction of an ambiguous or uncertain statute by an administrative agency charged with its administration, although not controlling, is entitled to the highest respect from the courts — especially when construction is definitely settled and uniformly applied for a number of years. We do not intend to ignore, abrogate or diminish this rule of construction. However, the construction given must have been reasonable and not clearly wrong.²² This case does not belong in the line of cases which hold that long-standing enforcement by an administrative agency is entitled to great weight. Here, the Department has conceded that the Attorney General's opinion set forth the correct interpretation of Oklahoma law. Although this reason standing alone might not be sufficient to reach this result, there are other factors which require that we reach the same conclusion as that of the Attorney General.

¶ 14 The determination of legislative intent controls statutory interpretation.²³ The intent is ascertained from the whole act in light of its general purpose and objective.²⁴ In construing statutes, relevant provisions must be considered together whenever possible to give full force and effect to each.²⁵ To ascertain legislative intent we look to the language of the pertinent statutes.²⁶ Doubt as to the meaning of a statute may be resolved by reference to its enacted history.²⁷

¶ 15 When the Oklahoma Code was first adopted in 1969, it was based primarily on the Uniform Consumer Credit Code. However, Oklahoma's version contained more than two hundred legislative amendments, customizing it for Oklahoma.²⁸ One such amendment was Oklahoma's creation of §§ 3-508A and 3-508B. Although, the Uniform Code's § 3-508 is nearly identical to Oklahoma's § 3-508A,²⁹ the Uniform Code has no provision similar to Oklahoma's § 3-508B. Nevertheless, when the Legislature adopted § 3-205 of the Code, which governs refinancing of consumer and supervised loans, the statute made reference to a non-existent § 3-508. Section § 3-205 provides that refinancing charges for supervised loans are limited pursuant to "the provision on loan finance charge for...