Court Opinion

ID: 8623555
Source: CourtListenerOpinion
Date Created: 2022-11-24 11:41:31.692606+00
Date Added: 2024-06-11T16:55:35.162331
License: Public Domain

CANBY, Circuit Judge,
dissenting:
With all due respect to the majority’s view, I dissent. Montana’s Deferred Deposit Loan Act was enacted in 1999 to “protect consumers who enter into short-term, high-rate loans____” Montana Code Ann. § 31-1-702. One of the protections provided by the Act is that covered lenders may not charge more than $30 as a bad check penalty. Id. § 31-1-722(3). Thus, after Montclair defaulted, E-Z Money Check Cashing, Inc., the lender, could have pursued him for no more than the original $200 principal, plus the $45 interest and a $30 bad check charge, for a total of $275.
Instead of pursuing Montclair directly, however, E-Z Money assigned the account to a collection agency, L.O.I., Inc. L.O.I. sought and obtained a default judgment for $775, representing the $275 owed to EZ Money plus an additional $500 bad check charge purportedly owed to L.O.I.
This result totally frustrates the remedial purposes of the bad check charge limitation in Montana’s Deferred Deposit Loan Act. The protection of a maximum $30 bad check charge provided by the Act becomes wholly illusory, and Montclair becomes subject to a charge more than sixteen times as large.
The majority holds that this anomalous result follows from the fact that collection agencies are exempted from the Deferred Deposit Loan Act, which otherwise would cover them as “persons who facilitate, enable, or act as a conduit for persons making deferred deposit loans.” Id. § 31—1— 704(1). But that exemption does not require such a broad reading that one of the purposes of the Deferred Deposit Loan Act is wholly frustrated. “Where statutes relate to the same general subject they should be so construed together, where there is no inconsistency between them, so as to give effect to both where possible.” City of Billings v. Smith, 158 Mont. 197, 490 P.2d 221, 230 (1971); see also Montana Automobile Ass’n v. Greely, 193 Mont. 378, 632 P.2d 300, 306 (1981) (“If possible, subsections of a statute should be construed in a manner that will give effect to them all.”).
The exemption in issue is provided for “a collection agency doing business in this state that has entered into an agreement with a deferred deposit lender for the collection of claims owed or due or asserted to be owed or due the deferred deposit lender.” Id. § 31—1—704(2) (b) (emphasis added). It is perfectly reasonable to read this exemption as confined to collection agencies that limit their collection to the amounts owed to the deferred deposit lender.
No such limitation was observed in this case. E-Z Money was forbidden by the Act to collect more than the prescribed fees, including the maximum $30 bad check charge. Indeed, E-Z Money was bound by an express prohibition against collecting or attempting to collect the $500 bad check charge permitted by Montana Code Ann. § 27-1-717(3), the statute under which L.O.I. was awarded $500 as a bad check charge. See Montana Code Ann. § 31-1-722(3). And there was only *539one bad cheek in this case—the original check for $245 written by Montclair and delivered and made payable to E-Z Money. In my view, when L.O.I. sought the additional $500 penalty, it was no longer acting under an agreement to collect “claims owed or due or asserted to be owed or due the deferred deposit lender” as required by the terms of the exemption conferred by § 31—1—704(2)(b). It therefore lost its exemption and violated § 31-1-722(3).
This reasonable construction of the § 31-l-704(2)(b) exemption gives effect to the $30 limitation of bad check charges set forth in § 31-1-722(3). It also gives ample effect to the exemption. It is true that, under this interpretation of § 31-1-704(2)(b), the collection agency’s exemption does not free it from the limitation of charges imposed on the lender, because the exemption will be lost if the collection agency seeks to collect more than the lender could! But benefits of the exemption remain for those agencies that confine their collection to the amounts owed to the lender. The Deferred Deposit Loan Act imposes a complete regulatory regime, with requirements of licensing and license fees, § 31-1-705, exposure to examination and payment of examiner’s fees, § 31-1-711, annual reports, § 31-1-714, and a number of other burdens. Because the Deferred Deposit Loan Act applies not only to lenders but “to persons who facilitate, enable, or act as a conduit for persons making deferred deposit loans,” § 31-1-704(1), a collection agency may become subject to a number of these requirements in the absence of an applicable exemption. Moreover, the public complaint provision applies not only to licensed lenders but to “an unlicensed person who violates any provision” of the Act, § 31-1-713. The Act also provides civil remedies against licensees and “unlicensed persons to whom [the Act] applies,” § 31-1-724. The collection agency that confines its collection to the amounts owed the licensed lender is exempt from all of these requirements.
I would therefore give effect to both the $30 bad check charge limitation of the Deferred Deposit Loan Act and to the exemption for collection agencies by limiting the exemption to agencies that collect or attempt to collect only the amounts due the deferred loan lender. The contrary interpretation adopted here today produces, in my view, a result that is both unduly harsh and inconsistent with the benevolent purposes of the Act. I accordingly dissent.