Loan Broker Claims: Businesses, Not Just Persons, May Bring Them, At Least For Now
In Printing Services of Greensboro, Inc. v. American Capital Group, Inc., filed Tuesday, a divided panel held that businesses, not just people, may bring claims under the Loan Broker Act.
"Loan broker" was defined in N.C. Gen. Stat. § 66-106(a)(1) as any person, firm, or corporation who, in return for any consideration from any person, promises to (i) procure for such person, or assist such person in procuring, a loan from any third party; or (ii) consider whether or not it will make a loan to such person. And a loan broker is required to, e.g., provide disclosure statements and file various materials with the Secretary of State.
The Printing Servs. majority held while the definition of "loan broker" includes "any person, firm, or corporation" who engages in certain conduct with respect to "any person," the defendant was not precluded from being considered a loan broker because the party for whom the loan is intended, here Printing Services of Greensboro, is a corporation and not a person.
Judge Geer dissented. She noted that the General Assembly defined the entity engaging in loan brokerage as encompassing persons, firms, or corporations, but, eight words later, when discussing potential borrowers, mentioned only persons, and stated that the court may not add additional words to the clear statute.
We'll see whether this gets appealed up and whether businesses will maintain the right to bring loan broker claims.
"Loan broker" was defined in N.C. Gen. Stat. § 66-106(a)(1) as any person, firm, or corporation who, in return for any consideration from any person, promises to (i) procure for such person, or assist such person in procuring, a loan from any third party; or (ii) consider whether or not it will make a loan to such person. And a loan broker is required to, e.g., provide disclosure statements and file various materials with the Secretary of State.
The Printing Servs. majority held while the definition of "loan broker" includes "any person, firm, or corporation" who engages in certain conduct with respect to "any person," the defendant was not precluded from being considered a loan broker because the party for whom the loan is intended, here Printing Services of Greensboro, is a corporation and not a person.
Judge Geer dissented. She noted that the General Assembly defined the entity engaging in loan brokerage as encompassing persons, firms, or corporations, but, eight words later, when discussing potential borrowers, mentioned only persons, and stated that the court may not add additional words to the clear statute.
We'll see whether this gets appealed up and whether businesses will maintain the right to bring loan broker claims.
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