Consumer Lender Definition

The Consumer Lenders Act defines commercial loans and commercial lenders as follows:

5. "Consumer lender" means a person that advertises to make or procure, solicits or holds itself out to make or procure, or makes or procures consumer lender loans to consumers in this state.

7. "Consumer loan" means the direct closed end loan of money in an amount of ten thousand dollars or less that is subject to a finance charge. for the purpose of determining whether a consumer loan is ten thousand dollars or less only the principal amount of the loan shall be considered and not any finance charges or other fees allowed pursuant to § 6-635.

A.R.S. § 6-601 (1999).

"Unless exempt under section 6-602 , a person shall not engage in the business of a consumer lender without first being licensed as a consumer lender by the superintendent." A.R.S. § 6-603(A) (1999). Only licensed consumer lenders may charge up to 36% in finance charges on the first $ 500 of the loan and up to 24% on any amount of the loan exceeding $ 500. See A.R.S. § 6-632(A)(2)(a) (1999). This statute applies "to any person who seeks to avoid its application by any device, subterfuge or pretense." A.R.S. § 6-603(B) (1999).

A statute is unconstitutionally vague when "it does not give persons of ordinary intelligence a reasonable opportunity to learn what it prohibits and does not provide explicit standards for those who will apply it." State v. Takacs, 169 Ariz. 392, 394, 819 P.2d 978, 980 (App. 1991).

"However, due process does not require that a statute be drafted with absolute precision." Id. at 395, 819 P.2d at 981. Nor will a statute violate due process merely "because it is susceptible to more than one interpretation." Id.

In analyzing a vagueness challenge, courts will look to judicial decisions, to settled common law meanings of the words used, and to the technical meanings of those words.

See, e.g., Village of Hoffman Estates v. Flipside, Hoffman Estates, Inc., 455 U.S. 489, 499-501, 71 L. Ed. 2d 362, 102 S. Ct. 1186 (1982). Judicial gloss can supply meaning to a statute that otherwise lacks it. United States v. Lanier, 520 U.S. 259, 266, 137 L. Ed. 2d 432, 117 S. Ct. 1219 (1997).

The key is whether the statutes, either standing alone or as construed, made it reasonably clear at the relevant time that a party's conduct was prohibited. See id. at 267.

Applying the void for vagueness principles, we find that the argument lacks merit. Usury case law--including Merryweather and Seargeant--gave appellees fair warning that their conduct was proscribed and made arbitrary prosecution impossible.

Furthermore, the terms "device," "subterfuge," and "pretense" have commonly understood legal meanings and are not vague. See State v. Phillips, 178 Ariz. 368, 370-71, 873 P.2d 706, 708-09 (App. 1994) (holding that because the terms of a statute prohibiting driving under the influence adequately provided people of ordinary intelligence with an opportunity to know what type of conduct is prohibited, they meet the constitutional standard).