Title: Independent Finance Institute v. Clark
Citation: 1999 OK 43, 70OBJ1560, 990 P.2d 845
Docket Number: 
State: Oklahoma
Issuer: Oklahoma Supreme Court
Date: May 11, 1999

Independent Finance Institute v. Clark Annotate this Case Independent Finance Institute v. Clark 1999 OK 43 990 P.2d 845 70 OBJ 1560 Case Number: 89504 Decided: 05/11/1999 Mandate Issued: 12/10/1999 Supreme Court of Oklahoma 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. [990 P.2d 847] Honorable Bryan D. Dixon, Trial Judge ¶0 The Oklahoma Department of Consumer Credit requested an opinion from the Attorney General regarding the refinancing of supervised loans initially made pursuant to 14A O.S. 1991 §3-508B. The Attorney General issued an opinion finding that lenders who issue loans under §3-508B may not impose the same finance charges allowed under §3-508B when refinancing loans. Rather, pursuant to 14A O.S. 1991 §3-205, lenders are limited to assessing charges permitted under 14A O.S. 1991 §3-508A when refinancing a §3-508B loan. After the Department notified lenders that it would begin enforcing the Attorney General's opinion, the lenders filed a declaratory judgment action in district court. The trial court, the Honorable Bryan D. Dixon, issued a permanent injunction, finding that lenders may receive charges permitted by §3-508B when refinancing loans originally made under that section. Subsequently, the Department appealed. We hold that 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 §3-208A and excludes §3-208B, while §3-508B now includes its own refinancing provisions, and provides for rebates of charges upon refinancing. TRIAL COURT REVERSED. PERMANENT INJUNCTION DISSOLVED. 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) ¶3 Title ¶4 Title 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 §3-508A ¶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, ¶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, ¶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 ¶9 ¶10 Section 3-508A ¶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 Should read "(Section 3-508A)" ¶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 [990 P.2d 851] "[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 §3-508 A. 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 [990 P.2d 851] 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 supervised loans (Section 3-508)."30 Accordingly, it is unclear from this reference to the non-existent §3-508, whether, when a supervised lender refinances a consumer loan, it may only impose a loan finance charge in accordance with §3-508A, or whether it can collect the more costly acquisition charges and installment account handling charges allowed under §3-508B. ¶16 A subsequent amendment to an act can be used to ascertain the meaning of a prior statute.31 Where the meaning of a prior statute is subject to serious doubt and has not been judicially determined, the presumption arises that a subsequent amendment was meant to clarify, as opposed to change the prior statute.32 In 1997, the Legislature addressed the oversight created by §3-205's reference to the non-existent §3-508, and in May of 1997, amended §§3-205, and 3-508B. The new version of §3-205,33 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. It expressly limits the acquisition charges and installment account handling charges when a loan is refinanced.34 Although not dispositive, these housekeeping amendments support the Department's position. ¶17 Oklahoma's Code, unlike the Uniform Code, creates a dichotomy between large supervised loans and small supervised loans.35 Because the size of a small supervised loan is so small, supervised lenders are allowed to charge acquisition charges and installment account handling charges in lieu of the lower [990 P.2d 853] loan finance charge.36 When a loan is prepaid, the lenders are allowed to keep the acquisition charge under Oklahoma's version of the Code, and only a portion of the installment account handling charge must be refunded.37 ¶18 If the reference in §3-205 were, as the lenders argue, read to allow small supervised lenders to refinance loans under the provisions of §3-508B, they would recover acquisition fees and installment account handling charges each time the loans are refinanced. The purpose of the Code is to protect consumers and encourage the development of fair and economically sound consumer credit practices.38 Had the Legislature intended such a lucrative result on the part of small loan lenders at the expense of consumers,39 it could have specifically provided so within the confines of §3-508B, but it did not. ¶19 Rather, the Legislature provided small supervised lenders the benefit of acquisition charges and installment account handling charges when initiating a loan, without requiring a refund of the acquisition charges.40 It appears that the trade off for this benefit is that when the small supervised loans are refinanced, they are limited to assessing only the loan finance charges under §3-508A. The Legislature had the opportunity to change the statute before the recodification in 1971, but failed to do so.41 The Legislature failed to amend §3-205 of the Code from 1969 until 1997.42 Apparently, when the Legislature became aware of the statutory inconsistency it amended §3-205 to specifically refer to §3-508A and to exclude §3-508B,43 expressly limiting the acquisition charges and installment account handling charges when a loan is refinanced. ¶20 Obviously, the Legislature originally intended, as the publisher of the 1969 Session Laws indicated by a footnote to the statute that the reference to §3-508 "[s]hould read Section 3-508A." It is undisputed that the publisher inserted the footnote to §3-205 to clarify any ambiguity in the Code. The Department asserts that the footnote became part of the statute by the Legislature's codification process. The Lenders insist that the footnote never became part of the statute. Generally, a [ 990 P.2d 854 ] publisher's correction becomes part of the statue if, as here, the publisher did not change the substantive meaning of the statute as it was originally intended by the Legislature.44 Accordingly, when refinancing a small supervised consumer loan made under the prior provisions of §3-508B, lenders are limited to assessing the loan finance charges permitted by §3-508A. However, the Legislature, in May of 1997, amended §§3-205 and 3-508B. The new version of §3-205 specifically refers to §3-208A and excludes §3-208B, while §3-508B now includes its own refinancing provisions, and provides for rebates of charges upon refinancing. ¶21 However, we also realize that the Department's interpretation was relied upon by the industry for twenty-seven years, and that only six months lapsed from the time the Attorney General issued an opinion until the new legislative amendments became effective. Consequently, our pronouncement should be given effect in the immediate cause and to all cases already in the appellate pipeline.45 CONCLUSION ¶22 The purpose of the Code is to protect consumers and encourage the development of fair and economically sound consumer credit practices.46 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 amended version of §3-205, which became effective on August 29, 1997, specifically refers to §3-208A and excludes §3-208B, while §3-508B now includes its own refinancing provisions, and provides for rebates of charges upon refinancing. ¶23 TRIAL COURT REVERSED. PERMANENT INJUNCTION DISSOLVED. Summers, C.J., Hodges, Wilson, Kauger, Watt, JJ., concur. Hargrave, V.C.J., Lavender, Simms, Opala, JJ., dissent. FOOT