Case Name: McKENZIE CHECK ADVANCE OF FLORIDA, LLC., etc., et al., Petitioners, v. Wendy BETTS, etc., Respondent
Court: Florida Supreme Court
Jurisdiction: Florida
Decision Date: 2006-04-27
Citations: 928 So. 2d 1204
Docket Number: No. SC04-1825
Parties: McKENZIE CHECK ADVANCE OF FLORIDA, LLC., etc., et al., Petitioners, v. Wendy BETTS, etc., Respondent.
Judges: WELLS, LEWIS, QUINCE, and BELL, JJ., concur.
Reporter: Southern Reporter, Second Series
Volume: 928
Pages: 1204–1218

Head Matter:
McKENZIE CHECK ADVANCE OF FLORIDA, LLC., etc., et al., Petitioners, v. Wendy BETTS, etc., Respondent.
No. SC04-1825.
Supreme Court of Florida.
April 27, 2006.
Virginia B. Townes of Akerman, Senter-fitt, Orlando, FL, and Mitchell Berger of Berger Singerman, Fort Lauderdale, FL, for Petitioner.
Christopher C. Casper of James Hoyer, Newcomer and Smiljanich, P.A., Tampa, FL, E. Clayton Yates of Yates and Manci ni, LLC, Fort Pierce, FL, and Richard A. Fisher, Cleveland, TN, for Respondent.
Warren H. Husband and James R. Daughton, Jr. of Meetz, Hauser, Husband and Daughton, P.A., on behalf of the Community Financial Services Association of America and the Financial Service Centers of Florida, Inc.; and Lynn Drysdale of Jacksonville Area Legal Aid, Inc., Jacksonville, FL, and Deborah Zuckerman of AARP Foundation, Washington, D.C., on behalf of AARP, National Association of Consumer Advocates and National Consumer Law Center, for Amici Curiae.

Opinion:
ANSTEAD, J.
We have for review the decision in Betts v. McKenzie Check Advance of Florida, LLC, 879 So.2d 667 (Fla. 4th DCA 2004), which certified conflict with the decision in Betts v. Ace Cash Express, Inc., 827 So.2d 294 (Fla. 5th DCA 2002). We have jurisdiction. See art. V, § 3(b)(4), Fla. Const. The issue before this Court is whether chapter 560, Florida Statutes (Supp.1994), which is titled the "Money Transmitters' Code" (herein referred to as "the Code"), authorized certain financial transactions referred to as deferred presentment transactions. We approve the holding of the Fourth District in McKenzie that the Legislature did not approve or authorize such transactions when it created the Code in 1994 and that these transactions are, in effect, loans subject to Florida's usury laws. We disapprove of the Fifth District's contrary holding in Ace Cash.
FACTS AND PROCEDURAL HISTORY
The factual transactions that gave rise to the present dispute are summarized in the Fourth District's opinion:
Betts's business relationship with NCA [National Cash Advance] began in August 1997 when she gave NCA two checks, each in the amount of $115. In return, she received $200 in cash and NCA's promise to defer presentment of the checks for a specified time. Approximately one week later, Betts redeemed the checks for cash. Less than one week later, Betts gave NCA three more checks, each for $115, in exchange for $300 and the same promise by NCA. Approximately two weeks later, Betts replaced the checks with three new checks, which she ultimately replaced with cash two weeks thereafter. A number of similar transactions subsequently took place, with Betts continuing to replace one check with another check, each time paying a fee, until December 1997 when she redeemed all checks with cash.
McKenzie, 879 So.2d at 668-69 (Fla. 4th DCA 2004) (footnote omitted). A similar, although not identical, set of circumstances was presented in Ace Cash, 827 So.2d at 294. Following a trial court decision against Betts based on the Fifth District's earlier decision in Ace Cash, the Fourth District reversed and held that the deferred payment transactions between Betts and NCA were essentially loan transactions and were not authorized with the Legislature's enactment of the Money Transmitters' Code in 1994. McKenzie, 879 So.2d at 674-75. The Fourth District decided that the short-term loan agreements entered into between Betts and NCA contrasted sharply with the check cashing transactions authorized by the Code:
There is no question that what takes place is something more than simple check cashing. In a deferred presentment transaction, the customer is advanced money in exchange for a check which the lender agrees not to immediately cash. In exchange for agreeing to defer presentment of the check, the lender exacts a fee. As Betts argues in this case, one might wonder why anyone would utilize the services of a "check casher" and pay for what he or she could otherwise obtain for free at a bank. Clearly, it is because the customer does not have the funds readily available to honor the check. Thus, there can be no question that what takes place is essentially an advance of money or a short-term loan.
McKenzie, 879 So.2d at 672. The Fourth District certified that its holding was in conflict with the Fifth District's holding in Ace Cash, and this review follows.
BACKGROUND
As outlined in the Fourth District's opinion, the Florida Legislature enacted the Money Transmitters' Code in 1994. This Code sought to regulate the practices of the money transmitter industry, including check cashing. The Code's definition of "money transmitter" referred to "any person located in or doing business in this state who acts as a payment instrument seller, foreign currency exchanger, check casher, or funds transmitter." § 560.103(10), Fla. Stat (Supp.1994). The Code defined "check casher" as "a person who, for compensation, sells currency in exchange for payment instruments received, except travelers checks and foreign-drawn payment instruments." § 560.103(3). "Sell" was defined as "to sell, issue, provide, or deliver." § 560.103(19). A "payment instrument" meant "a check, draft, warrant, money order, travelers check or other instrument or payment of money, whether or not negotiable." § 560.103(14). Moreover, "cashing" was defined as "providing currency for payment instruments, except for travelers checks and foreign-drawn payment instruments." § 560.302(1). Finally, the Department of Banking and Finance was charged with interpreting and enforcing the Code. § 560.102(1), 560.105.
The following year, on February 24, 1995, the Florida Check Cashiers Association (FCCA), a group representing the Florida check cashing industry, solicited and received an informal opinion letter from the Department of Banking and Finance concerning certain deferred check cashing practices. The Department's letter stated that "Chapter 560, Florida Statutes, does not explicitly prohibit the concept of deferred deposits" so long as the service would be offered and managed in accordance with the provisions and fee caps of the Code.
Subsequently, on September 24, 1997, the Department adopted rules regulating check cashing transactions. These rules permitted a check casher to accept a postdated check, and capped the transaction fees for such transactions at ten percent and the verification fees at five dollars. Fla. Admin. Code R. 3C-560.801 (transferred to R.69V-560.801), 3C-560.803 (repealed 2001), and 3C-560.905 (transferred to R.69V-560.905).
On May 5, 1998, the Department sent a letter to Advance America, Cash Advance Centers of Florida, Inc., regarding cashing checks, fees associated with deferred deposit checks, and rollover transactions of deferred deposit checks. This letter stated that customers cashing checks must receive currency, not another check or other type of payment instrument. In referencing deferred presentment transaction practices, the letter described the limitations on fees that can be charged by check cashers and explicitly referenced Florida's Usury Law in section 687.02, Florida Statutes (1997), stating that "it is illegal to charge a higher rate of interest than 18 percent per annum simple interest. Any 'rollover,' 'extension' or 'renewal' of a deferred deposit check for an additional fee may constitute interest." In the final paragraph of the letter, the Department put Advance America on notice that the Department would fully enforce chapter 560 and that Advance America should "refrain from issuing payment instruments [for which it is] not properly licensed."
On May 1, 2000, the Florida Attorney General's Office issued an advisory legal opinion to the Comptroller of Florida in response to the question: "Are so-called 'payday loans' or like transactions subject to the state laws prohibiting usurious rates of interest?" Op. Att'y Gen. Fla. 00-26 (2000). The opinion stated:
"Payday loans" or like transactions are subject to the state laws prohibiting usurious rates of interest. A company registered under Chapter 560, Florida Statutes, may cash personal checks for the fees prescribed in that chapter without violating the usury laws only if such transactions are concluded and are not extended, renewed or continued in any manner with the imposition of additional fees.
Thus, to the extent that a transaction comports with the provisions of this act [chapter 560], it would not violate the usury provisions in Chapter 687, Florida Statutes. In the absence of statutory authorization for these types of transactions, cashing a check or exchanging currency for a fee outside the scope of Chapter 560, Florida Statutes, would constitute a loan, subject to the usury provisions of Chapter 687, Florida Statutes.
Op. Att'y Gen. Fla. 00-26 (2000).
In 2001, Betts filed an administrative challenge to Department rule 3C-560.803, Fla. Admin. Code, claiming that the rule, in seeming to authorize the acceptance of postdated checks by a check casher, was an invalid exercise of delegated legislative authority; furthermore, the rule improperly enlarged, modified, or contravened specific provisions of the Code it was meant to implement. After a hearing, an Administrative Law Judge (ALJ) upheld the rule, finding it did not enlarge, modify, or contravene the Code and it was a proper exercise of delegated legislative authority. Betts v. Dep't of Banking & Fin., No. 01-1445RX (Fla. DOAH order filed Sept. 7, 2001). However, the ALJ concluded that the Department's rule did not authorize deferred deposit transactions or the fees to be charged for such transactions. Id. The order stated that "[t]he Department has no rule, order, or declaratory statement authorizing deferred deposit transactions or repeated, consecutive deferred deposit transactions by a registered check casher." Id. at 11. Moreover, the order stated that "[t]he rule does not establish the fees nor does it authorize 'rollover transactions' or 'payday loans.' " Id. at 32.
In 2001, the Legislature amended the Code toexpressly permit deferred presentment transactions subject to certain limitations and to prohibit rollover transac tions. See Deferred Presentment Act, ch. 2001-119, § 18, Laws of Fla. (codified at § 560.401-408, Fla. Stat. (2001)). A "deferred presentment transaction" is defined in the amendment as "providing currency or a payment instrument in exchange for a person's check and agreeing to hold that person's check for a period of time prior to presentment, deposit, or redemption." § 560.402(6). In the amended version of the statute, the Legislature expressly authorized deferred presentment transactions subject to the lender's compliance with strict record-keeping, notice, and Truth-in-Lending disclosure requirements. See § 560.404. The statute limits the face amount of the check taken for deferred presentment to not more than $500 and caps the fee for such transactions at ten percent. § 560.404(5) — (6). The statute expressly prohibits the post-dating of checks and any rollover or extension of a deferred presentment agreement. § 560.404(12), (14), (18).
ANALYSIS
We must decide whether the Legislature intended to include the deferred presentment transactions challenged by Betts when it enacted the Code in 1994. Like the Fourth District in McKenzie and the dissent in Ace Cash, we conclude that it did not. When reading all of the statute's terms together, we conclude that the Legislature contemplated a check casher to be a person or entity who may be compensated to provide currency in exchange for a check. We further conclude that the Legislature did not authorize deferred presentment transactions such as those involved herein until the passage of the Deferred Presentment Act in 2001. Hence, the transactions involved herein are subject to Florida usury laws. Our conclusion is based upon a plain reading of the language of the original version of the Code enacted in 1994 and a similar reading of the 2001 version of the Code, as well as the terms of Florida's usury laws.
When construing the meaning of a statute, we must first look at its plain language. Montgomery v. State, 897 So.2d 1282, 1285 (Fla.2005). Furthermore, "[wjhen the language of the statute is clear and unambiguous and conveys a clear and definite meaning, there is no occasion for resorting to the rules of statutory interpretation and construction; the statute must be given its plain and obvious meaning." Id. (quoting Holly v. Auld, 450 So.2d 217, 219 (Fla.1984)).
Historically, transactions involving the lending of money for a fee or at a particular rate of interest have been governed by Florida's usury laws. See § 687.02(1), Fla. Stat. (1993) ("All contracts for the payment of interest upon any loan, advance of money, line of credit, or forbearance to enforce the collection of any debt, or upon any obligation whatever, at a higher rate of interest than the equivalent of 18 percent per annum simple interest are hereby declared usurious."). However, the Legislature from time to time has carved out exceptions to the usury laws. See, e.g., § 687.031, Fla. Stat. (1993) ("Sections 687.02 and 687.03 shall not be construed to repeal, modify or limit any or either of the special provisions of existing statutory law creating exceptions to the general law governing interest and usury and specifying the interest rates and charges which may be made pursuant to such exceptions . "). We find no exception to these laws in the enactment of the Money Transmitters' Code in 1994.
When the Money Transmitters' Code was enacted in 1994, it defined a "money transmitter" as "any person located in or doing business in this state who acts as a payment instrument seller, foreign currency exchanger, check casher, or funds transmitter." § 560.103(10), Fla. Stat. (Supp.1994) (emphasis added). The Code defined "check casher" as "a person who, for compensation, sells currency in exchange for payment instruments received, except travelers checks and foreign-drawn payment instruments." § 560.103(3) (emphasis added). The term "sell" was defined as "to sell, issue, provide, or deliver." § 560.103(19). A "payment instrument" meant "a check, draft, warrant, money order, travelers check or other instrument or payment of money, whether or not negotiable." § 560.103(14) (emphasis added). Moreover, the term "cashing" was also defined) in the Code as "providing currency for payment instruments, except for travelers checks and for-eigmdrawn payment instruments." § 560.302(1). The Code's language explicitly provides, by the use of "in exchange for" and "for," that the check for cash transaction would be a contemporaneous one. See § 560.103(3), 560.302(1). For example, the statute contemplates that a person may have to pay a fee for an authorized entity to cash a check, and the entity would then give the person money in exchange for the check. Therefore, we conclude the check cashing transaction contemplated by the Code is a straightforward payment of money in exchange for a check and not an authorization to process loans outside Florida's usury laws.
As noted above, the Code was amended by the passage of the Deferred Presentment Act in 2001. See § 560.401-.408, Fla. Stat. (2001). In the Deferred Presentment Act, a "deferred presentment transaction" was defined as "providing currency or a payment instrument in exchange for a person's check and agreeing to hold that person's check for a period of time prior to presentment, deposit, or redemption." § 560.402(6). Moreover, "rollover" was defined as "the termination or extension of an existing deferred presentment agreement by the payment of any additional fee and the continued holding of the check, or the substitution of a new check drawn by the drawer pursuant to a new deferred presentment agreement." § 560.402(8). Additionally, "termination of an existing deferred presentment agreement" was defined as:
[T]he check that is the basis for an agreement is redeemed by the drawer by payment in full in cash, or is deposited and the deferred presentment provider has evidence that such check has cleared. A verification of sufficient funds in the drawer's account by the deferred presentment provider shall not be sufficient evidence to deem the existing deferred deposit transaction to be terminated.
§ 560.402(10).
Importantly, Part IV of chapter 560, as amended in 2001, imposes strict requirements for deferred presentment transactions. Most relevant to the instant case is section 560.404(14), which states, "No deferred presentment provider or its affiliate may accept or hold an undated check or a check dated on a date other than the date on which the deferred presentment provider .agreed to hold the check and signed the deferred presentment transaction agreement." Additionally, section 560.404(18) states:
No deferred presentment provider or its affiliate may engage in the rollover of any deferred presentment agreement. A deferred presentment provider shall not redeem, extend, or otherwise consolidate a deferred presentment agreement with the proceeds of another deferred presentment transaction made by the same or an affiliated deferred presentment provider.
Furthermore, section 560.404(19) provides:
A deferred presentment provider may not enter into a deferred presentment transaction with a person who has an outstanding deferred presentment transaction with that provider or with any other deferred presentment provider, or with a person whose previous deferred presentment transaction with that provider or with any other provider has been terminated for less than 24 hours.
Like the Fourth District in McKenzie and Judge Griffin's dissent in Ace Cash, we conclude that the Legislature did not intend for deferred presentment transactions to be covered under the Money Transmitters' Code until it expressly added the Deferred Presentment Act in 2001.
In fact, this reading of the plain language of the statute is well articulated in Judge Griffin's dissent in Ace Cash:
The fact that Chapter 560, which regulates check cashing operations, does not expressly prohibit rollovers and deferred presentments, does not mean that the usury laws are not violated by such devices. The legislature is to be forgiven for not having the foresight to prohibit or regulate the "uncashing" of a cashed check. Nor am I persuaded that the passage of the "Deferred Presentment Act" in October 2001 was intended by the legislature to confirm the prior legality of the practice. Indeed, it appears the legislation undertook to regulate and limit these schemes. Further, the statute appears to recognize that these transactions are, in fact, loans.
Ace Cash, 827 So.2d at 299 (Griffin, J., dissenting). We conclude that if the Legislature had intended to carve out such an important exception to the usury laws in 1994, it would have expressly done so, as it did with the 2001 amendment.
Sometimes it may be appropriate to consider a subsequent amendment to clarify original legislative intent of a statute if such amendment was enacted soon after a controversy regarding the statute's interpretation arose. Lowry v. Parole & Prob. Comm'n, 473 So.2d 1248, 1250 (Fla.1985). However, the Fourth District decided ' that it is inappropriate to use an amendment for this purpose when the amendment was enacted seven years after the original statute. McKenzie, 879 So.2d at 674; see also Parole Comm'n v. Cooper, 701 So.2d 543, 544-45 (Fla.1997) (concluding that ten years is too long to be an affirmation of prior legislative intent). We agree.
In this case, the Legislature enacted the 2001 version of the Code seven years after the 1994 version. As with the ten-year gap in Cooper, we conclude that seven years is too long to view the amendment as merely a clarification of legislative intent. It is telling that nowhere within the original version of the Code did the Legislature mention these types of transactions. Moreover, the usury laws, which existed at the time the Code was enacted, have a general application to "[a]ll contracts for the payment of interest upon any loan, advance of money, line of credit, or forbearance to enforce the collection of any debt." § 687.02, Fla. Stat. (1997). As a result, like the Fourth District and Judge Griffin, we conclude that the deferred deposit transactions involved herein are not "check cashing" transactions and are not governed by the Money Transmitters' Code enacted in 1994. Instead, these transactions are "contracts for the payment of interest upon any loan" and subject to Florida's usury laws.
Finally, we find it persuasive that courts in other states have held that deferred presentment transactions are loans. See, e.g., Hamilton v. York, 987 F.Supp. 953, 956 (E.D.Ky.1997) (deciding that the deferred-repayment transactions "were nothing more than interest bearing loans"); Austin v. Alabama Check Cashers Ass'n, Nos. 1011907 & 1011930, — So.2d -•, -, 2005 WL 3082884, at ⅜21 (Ala. Nov.18, 2005) (concluding that deferred presentment transactions were loans subject to the Alabama Small Loan Act); White v. Check Holders, Inc., 996 S.W.2d 496, 500 (Ky.1999) (holding that the legislature did not intend for deferred deposit businesses to come under the law when it passed Kentucky Revised Statutes section 368.100(2) to allow check cashing businesses to charge fees without implicating usury laws).
The facts of the instant case are strikingly similar to those in White. In 1992, the Kentucky General Assembly enacted Kentucky Revised Statutes chapter 368, allowing check cashing businesses to charge a fee for cashing checks without implicating Kentucky's usury laws. White, 996 S.W.2d at 497. The transactions in that case involved the use of an order instrument "payable on demand and drawn on a bank" to evidence the promise of a debt due at a later time. Id. In White, the court addressed the following issue:
When a check cashing company licensed under KRS 368 et seq. accepts and defers deposit on a check pursuant to an agreement with the maker of the check, is the service fee charged by the check cashing company a "service fee" and not "interest" under KRS 368.100(2), or is the fee "interest" which is subject to the usury laws and disclosure provisions in KRS Chapter 360?
Id. The Kentucky Supreme Court held that the General Assembly did not intend for section 368.100(2) to encompass short-term loans based upon deferred deposit transactions as well as check cashing from current funds. Id. at 499. The Court decided that deferred deposit businesses did not come under the Code. Id. Furthermore, the Court noted that if the 1992 Act had applied to deferred deposit transactions, there would have been no need for the General Assembly to have amend the statute in 1998 to include these types of transactions. Id.
CONCLUSION
In conclusion, we hold that the original version of the Code did not include deferred presentment transactions. Therefore, at the time the transactions between Betts and NCA took place, the legality of such transactions was governed by Florida's usury laws. Accordingly, we approve the Fourth District's essential holding in McKenzie on this issue, and disapprove the Fifth's District decision in Ace Cash. We decline to consider other issues raised by the parties.
It is so ordered.
WELLS, LEWIS, QUINCE, and BELL, JJ., concur.
CANTERO, J., concurs in part and dissents in part with an opinion.
PARIENTE, C.J., recused.
. We decline to address the issue of whether National Cash Advance (NCA) is entitled to the protection of the safe harbor provision, section 560.107, Florida Statutes (Supp. 1994).
. The Florida Check Cashiers Association is now known as Financial Service Centers of Florida, Inc.
. Florida Administrative Code Rule 3C-560.803 provided, "A check casher may accept a postdated check, subject to the fees established in Section 560.309(4), F.S." This rule only permitted postdated checks in check cashing transactions. Because there were no postdated checks in this case, we need not address the issue of whether the Department had the authority to promulgate this rule.
. At oral argument, McKenzie's counsel conceded that these transactions were "a species of loans" and "a form of a loan."