Opinion ID: 1784672
Heading Depth: 2
Heading Rank: 1

Heading: The Statutory Ambiguity

Text: The issue in this case is whether the term check cashing in the Money Transmitters' Code  chapter 560, Florida Statutes (1997)  encompasses deferred presentment transactions. In a normal check-cashing transaction, the customer presents the check-cashing company with a check (sometimes a paycheck received that day), and in exchange receives cash. The majority finds nothing wrong with such transactions. Deferred presentment transactions are check-cashing transactions with a twist: like normal transactions, the customer receives cash in exchange for a check, but instead of having authority to cash the check immediately, the company, for a fee, agrees not to present the check to the bank for a specified period of time. [5] Some deferred presentment transactions present yet another wrinkle: the customer enters into a so-called rollover transaction. These come in three main types: (1) the customer pays an additional fee in cash, and the check casher agrees to defer presentment for an even longer period; (2) the customer pays an additional fee and replaces the first check with a new one, presentment of which is also deferred; or (3) the customer redeems the earlier check with cash and then promptly writes a new check for deferred presentment, in exchange for which the cash  minus an additional fee  is returned. As scholars have noted, all of these rollovers achieve the same result: a continuous flow of interest-only payments at very short intervals that never reduces the principal. Lynn Drysdale & Kathleen E. Keest, The Two-Tiered Consumer Financial Services Marketplace: The Fringe Banking System and its Challenge to Current Thinking About the Role of Usury Laws in Today's Society, 51 S.C. L.Rev. 589, 601 (2000). [6] Before 2001, when the Legislature passed the Deferred Presentment Act specifically addressing deferred presentment transactions, see ch. 2001-119, § 13, Laws of Fla., the Money Transmitters' Code did not mention them. It merely discussed check cashing in general, which it defined as providing currency for payment instruments, except for travelers checks and foreign-drawn payment instruments. § 560.302(1), Fla. Stat. (1997). Thus, if deferred presentment transactions qualified as check cashing, they were subject to the Code's fee structure. See id. §§ 560.301-.310. If not, then they were effectively loans subject to Florida's longstanding usury laws. See id. § 687.02(1) (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.). [7] The majority concludes from the plain language of the Code that all deferred presentment transactions  whether completed or rolled over  fall outside the definition of check cashing. Majority op. at 1209-10, 1211. According to the majority, they are simply disguised loans that must comply with the usury laws. Id. at 1211. I beg to differ. I do not agree that all deferred payment transactions are the same. To the contrary, as I explain below, the agency charged with implementing the Code has reasonably interpreted it as including pure deferred presentment transactions but excluding rollovers. I would defer to the agency's interpretation.