Court Opinion

ID: 9634153
Source: CourtListenerOpinion
Date Created: 2023-08-22 12:50:27.079948+00
Date Added: 2024-06-11T09:43:30.372970
License: Public Domain

ORDER DENYING PETITION FOR REHEARING
MEHRTENS, District Judge.
Mary Ann Stefanski petitions this Court for a rehearing on defendants’ motion to dismiss plaintiffs’ complaint and to set aside this Court’s order of March 30, 1971. In support of her motion, she argues that this Court erred in both its findings of fact and findings of law regarding the Insurance Premium Service Agreement executed between herself and the defendants which this Court determined to be a loan rather than a credit sale and thus, based on the disclosures made in the agreement, was not violative of the Truth-in-Lending Act, 15 U.S.C.A. § 1601 et seq. and Regulation Z, 12 C.F.R. 226 of the Federal Reserve Board. Defendants in a reply memorandum in opposition to the petition for re-hearing, argues that this Court was correct in its rulings, with the exception of joint liability of the two defendants as provided for in Regulation Z § 226.6(d).
This Court finds nothing in plaintiffs’ petition which justifies or commands the granting of the petition. Plaintiffs’ naked assertion that the “purchase of an insurance policy is the purchase of a service” is unsupported by any legal authority. . This Court, in its prior order, found the agreement to be a loan of money to be used in the purchase of automobile insurance. Plaintiffs would argue that what was agreed to was not a loan of money but a purchase of a service, that service being the insurance policy. As suggested in the prior order, plaintiffs are attempting to trigger the provisions of Regulation Z § 226.8(c) (1), which requires certain disclosures regarding agreements in which “property or service (s are] purchased’’. This Court found a loan of money as a finding of fact. It thus followed that the Court *142found also a loan of money as a finding of law as it related to Regulation Z § 226.8(c) and (d). Plaintiffs have failed to demonstrate to this Court that its findings were in error.
 This Court is aware of a letter from Frederic Solomon, Director, Federal Reserve Board, dated January 5, 1970, in which it was stated:
“ * * * an insurance agent is ‘selling’ insurance * * * consumer credit for premium financing * * * is making [of] a credit sale under § 226.2(n) [P510] and disclosures under § 226.8(b) [|[3566] and (c) [([3567] would be required * *
CCH Consumer Credit Guide, P0,257 While such correspondence releases by the Federal Reserve Board are persuasive to this Court, they are not binding authority as to questions of interpretations of federal law. This Court does not agree with that interpretation because (1) it cannot determine whether the agreement interpreted in that letter was identical, or even similar, to the agreement executed and sued upon in this matter and (2) the letter does not provide any information as to state law which may or may not affect the factual determination of the status of the agreement. The agreement here contained provisions as required by Florida Statutes § 627.0990 et seq., F.S.A. That statute calls the agreement a promissory note. This Court interprets promissory note as a form of agreement used in perfecting a loan. Plaintiff cites no authority to the contrary.
Plaintiffs further argue that this_. agreement constituted consumer credit, as defined in Regulation Z § 226.-2(k). This Court agrees with plaintiffs. This agreement constituted an extension of consumer credit. That does not make the agreement a credit sale which thus requires certain disclosures admittedly not present in this agreement. Plaintiffs fail to closely read Regulation Z, wherein § 226.2(k) it states:
“Consumer credit means credit offered or extended to a natural person, in which the money, property, or service which is the subject of the transaction is primarily for personal, family, * * * purposes * * * ” (emphasis added)
From this reading, this Court concludes that Regulation Z 226.8(c) disclosures are to be used in credit sales of property or service, while Regulation Z 226.8(d) disclosures are to be used in loans of money. This seems to be the clear intent of Congress, 15 U.S.C.A. §§ 1638 and 1639, and the intent of the Federal Reserve Board, 12 C.F.R. § 226.8(c) and (d).
Finally, plaintiffs argue that if this agreement is in fact a loan, then the loan is usurious under Florida Statutes. This argument presents no question to this Court, which refuses to determine the validity of this agreement in light of a state usury law. Therefore, it is Ordered and adjudged that plaintiffs’ petition for re-hearing on defendants’ motion to dismiss and to set aside the order of dismissal is denied.