Court Opinion

ID: 9505535
Source: CourtListenerOpinion
Date Created: 2023-08-06 20:06:11.490026+00
Date Added: 2024-06-11T09:04:34.224143
License: Public Domain

SHEPARD, Chief Justice,
dissenting.
I read subsection 508(7) to mean what it says, in straightforward terms: "With respect to a supervised loan not made pursuant to a revolving loan account, the lender may contract for and receive a minimum loan finance charge of not more than thirty dollars ($30)." 1
I think subsection 508(2) limiting annual interest and subsection 508(7) permitting a minimum finance charge were adopted by the legislature on the premise that the two would work together like this: a lender can charge no more than 36% per year, but if the loan period is so short or the loan so small that this rate might produce just a few dollars, a minimum of $33 may be charged. This harmonizes both provisions by treating subsection 508(7) as an exception to subsection 508(2), and it makes $38 a true "minimum loan finance charge" using the common meaning of the words.
The majority concludes that subsection 508(7) comes into play only in the event of loan prepayments, because it is referenced in § 210 ("Rebate Upon Prepayment"). Although subsection 508(7) does perform this additional function, I still find its primary purpose in its plain language. If the legislature had intended to permit a minimum loan finance charge but limit it to prepayment situations, surely the logical approach would have been to state the minimum charge, in dollars, in the prepayment section and eliminate subsection 508(7) entirely, or at least to clarify this limitation in subsection 508(7).
This is not to say that the legislature contemplated allowing lenders to collect $33 every two weeks on what is for all practical purposes one continuing loan. *581Lawmakers probably recognized that they could not anticipate all possible schemes and adopted a general provision aimed at preventing such possibilities Ind.Code § 24-4.5-3-509, "Use of Multiple Agreements," prohibits lenders from permitting borrowers to "become obligated in any way under more than one loan agreement with the lender ... with intent to obtain a higher rate of loan finance charge than would otherwise be permitted by the provisions on loan finance charge[s] for supervised loans...." This provision effectively prohibits sequential fee-charging practices.
It has been awhile since we last encountered a statute in such serious need of revision. Our federal cousins might take comfort in knowing that, like them, we found the task of parsing its various provisions very difficult (but had nowhere else to send out for help).

. This $30 amount is periodically adjusted to reflect inflation, as the majority explains, and is currently set at $33.