November 12, 1993
Honorable William T. Graham Commissioner of Banks North Carolina State Banking Commission Dobbs Building 430 North Salisbury Street Raleigh, North Carolina
Re: Advisory Opinion – Consumer Finance Act; Authority of State Banking Commission to Set Maximum Interest Rates for Loans Made Pursuant to N.C.G.S. § 53-176; N.C.G.S. § 53-173.
Dear Commissioner Graham:
You request that this Office issue an opinion regarding the authority of the State Banking Commission to set the maximum interest rate for loans made by licensees pursuant to N.C.G.S. § 53-176 of the Consumer Finance Act (Art. 15, G.S. Chap. 53) (the Act).
For reasons which follow, we conclude that the State Banking Commission does not have any authority to redetermine and refix the maximum interest rate for loans made by licensees pursuant to N.C.G.S. § 53-176. The State Banking Commission does, however, have the authority to redetermine and refix the maxmum interest rate for loans made by licensees pursuant to N.C.G.S. § 53-173.
Licensees under the Act may elect to make loans either pursuant to N.C.G.S. § 53-173(a), which sets the maximum loan amount at $3,000.00 and the maximum interest rate at thirty-six percent (36%) per annum, or pursuant to N.C.G.S. § 53-176, which sets the maximum loan amount at $10,000.00 and the maximum interest rate, with regard to loans not exceeding $7,500.00, at thirty percent (30%) per annum on that part of the unpaid principal balance not exceeding $1,000.00 and eighteen percent (18%) per annum on all other loan amounts. Subsection (f) of
N.C.G.S. § 53-173 contains the following pertinent language:
Subject to the limitations contained in this Article [15] as to maximum rates, the [State Banking] Commission may from time to time, upon the basis of changed conditions or facts, redetermine and refix any such maximum rates of charge, but, before determining or redetermining any such maximum rates, the Commission shall give reasonable notice of its intention to consider doing so to all licensees and a reasonable opportunity to be heard and introduce evidence with respect thereto.
The language of N.C.G.S. § 53-176 which is pertinent to this opinion reads as follows:
The provisions of G.S. 53-173(b), (c) and (d) and G.S. 53-180(b), (c), (d), (e), (f), (g), (h) and (i) shall apply to loans made pursuant to this section.
The plain words of N.C.G.S. § 53-176 quoted above provide that only subsections (b), (c), and
(d) of N.C.G.S. § 53-173 shall apply to loans made pursuant to N.C.G.S. § 53-176. Subsection (f) is omitted from the list of applicable provisions. We conclude, therefore, that it is the intent of the Legislature that Subsection (f) of N.C.G.S. § 53-173 shall not apply to the maximum interest rate set for loans under N.C.G.S. § 53-176.
Where the language of a statute is clear and unambiguous, there is no room for construction, and the statute must be given its plain meaning. When construction is necessary, the primary rule of construction is to ascertain the intent of the Legislature and to carry out such intention to the fullest extent. The intent must be found from the language of the statute, its legislative history, and the circumstances surrounding its adoption which throw light upon the evil sought to be remedied. Burgess v. Your House of Raleigh, Inc., 326 N.C. 205 at 209, 388 S.E.2d 134 (1990); 12 N.C. Index 3d Statutes §5.5.
The North Carolina Supreme Court has said:
In matters of statutory construction, our primary task is to ensure that the purpose of the Legislature, the legislative intent, is accomplished. (Citation omitted.) Legislative purpose is first ascertained from the plain words of the statute. (Citation omitted.) Moreover, we are guided by the structure of the statute and certain canons of statutory construction. Electric Supply Co. v. Swain Electrical Co., 328 N.C. 651 at 656, 403 S.E.2d 291 (1991) (emphasis added).
The legislative history of N.C.G.S. § 53-176 also supports this conclusion. The Consumer Finance Act was first enacted in 1961 and appears in Session Laws 1961, Chap. 1053, Sec. 1. The language of N.C.G.S. § 53-173(e), subsequently codified as subsection (f), as originally enacted, read the same as the current subsection (f). The pertinent language of N.C.G.S. § 53176, however, read as follows:
In lieu of making loans in the amount, for the term and at the charges stated respectively in Sections 53-166, 53-173 and 53-180, a licensee may at any time elect to make loans in any amount including loans in excess of six hundred dollars ($600.00), for any term including more than 24 months, subject to all the other provisions of this Act, provided that the charges for the entire amount for each such loan made by such electing licensee…shall not exceed the same fees and interest set forth in G.S. 53-141. [Emphasis added.]
As originally enacted, therefore, all of the provisions of the Consumer Finance Act applied to loans made under N.C.G.S. § 53-176 except (i) the amount, (ii) the term, and (iii) the charges stated in N.C.G.S. §§ 53-166, 53-173, and 53-180. A subsequent amendment to N.C.G.S. § 53176, however, provided, inter alia:
The provisions of G.S. 53-171.1, G.S. 53-174 and G.S. 53-175(a) and (b) shall not apply to loans made pursuant to this section. The provisions of G.S. 53-173(b), (c) and (d) and G.S. 53-180(b), (c), (d), (e), (f), (g) and (h) shall apply to loans made pursuant to this section. Session Laws 1983, Chap. 126, Sec. 14.
The General Assembly, by this amendment, deleted the language of the original enactment providing that all of the provisions of the Consumer Finance Act, with certain specified exceptions, should apply to loans made under N.C.G.S. § 53-176 and set out, instead, the provisions of the Act that would apply. Subsection (f) of N.C.G.S. § 53-173 was not among those provisions that were made applicable. By later amendment appearing in Session Laws 1989, Chap. 17, Sec. 6, the above-quoted language was changed to its current form, which again does
not include N.C.G.S. § 53-173(f) among the applicable provisions.
It is the opinion of this Office, therefore, based upon the plain language of the statute and its
legislative history, that N.C.G.S. § 53-173(f) does not grant authority to the State Banking
Commission to refix the maximum interest rate set out in N.C.G.S. § 53-176.
If you have any questions or comments about this opinion, please feel free to contact us.
Andrew A. Vanore, Jr.
Chief Deputy Attorney General
John R. McArthur
Chief Counsel