Original jurisdiction in case of Beneficial Consumer Discount Company, a Pennsylvania corporation v. William E. Whitesell, Secretary of Banking, Commonwealth of Pennsylvania, and Signal Consumer Discount Company, a Pennsylvania corporation, Intervenor.
Paul A. Manion, with him George H. Valentine, and Reed, Smith, Shaw & McClay, and, of counsel, Christopher Zettlemoyer, for petitioner.
Bonnie Jean McRobbie, Assistant Attorney General, with her John E. Nanorta, Assistant Attorney General, and Edward G. Biester, Jr., Attorney General, for respondent.
John J. McLean, Jr., with him James R. Sweeny, Melvin L. Moser, Jr., and Buchanan, Ingersoll, Rodewald, Kyle & Buerger, for intervenor.
President Judge Bowman and Judges Crumlish, Jr., Wilkinson, Jr., Mencer, Rogers, Blatt and MacPhail. Judges DiSalle and Craig did not participate. Opinion by Judge Blatt. Judge Mencer dissents.
[ 45 Pa. Commw. Page 158]
The Beneficial Consumer Discount Company (petitioner) initiated this action within our original jurisdiction, seeking review of certain regulations promulgated by the Secretary of Banking (Secretary), under Section 12 of the Consumer Discount Company Act,*fn1 (Act), 7 P.S. § 6212. The Signal Consumer Discount Company was later granted permission to intervene as a party-respondent. The parties have cross-filed motions for summary judgment with supporting affidavits, and, there being no material factual dispute, we shall proceed to resolve the legal issues presented. Essentially, we must determine whether or not the Secretary's regulations contravene the provisions of the Act.
Section 14A of the Act, 7 P.S. § 6214A, provides as follows:
A licensee shall not permit any person to become obligated to such licensee as a consumer on one or more loan contracts for an aggregate amount in excess of five thousand dollars ($5,000), exclusive of charges authorized by this
[ 45 Pa. Commw. Page 159]
act. . . . This limitation shall not impair the authority of a licensee to lend money, credit, goods or things in action, or to purchase contracts in amounts in excess of five thousand dollars ($5,000) and charge, contract for, receive or collect interest or discount at the legal rate established by the General Usury Statute of the Commonwealth.
In 1978, pursuant to his authority to issue regulations under Section 12 of the Act, 7 P.S. § 6212,*fn2 the Secretary promulgated the following regulation interpreting the above-quoted Section 14A of the Act:
(p) When a loan in excess of $5,000 is granted to one consumer or when an aggregate number of loans are granted to one consumer by a licensee or licensees under the same management or control the total of which exceed $5,000, the interest rate on the amount in excess of $5,000 shall be limited to the legal rate established by the Act of January 30, 1974 (P.L. 13, No. 6) (41 P.S. § 202), which rate is 6% per annum, simple interest. This means that a licensee may grant a single loan in excess of ...