{ "id": 11708933, "name": "BENEFICIAL NORTH CAROLINA, INC., Petitioner/Appellant v. STATE OF NORTH CAROLINA ex. rel. THE NORTH CAROLINA STATE BANKING COMMISSION, Respondent/Appellee v. GLORIA DELOATCH, Respondent/Intervenor/Appellee", "name_abbreviation": "Beneficial North Carolina, Inc. v. State ex rel. North Carolina State Banking Commission", "decision_date": "1997-05-06", "docket_number": "No. COA96-566", "first_page": "117", "last_page": "129", "citations": [ { "type": "official", "cite": "126 N.C. App. 117" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "57 ALR Fed. 765", "category": "reporters:federal", "reporter": "A.L.R. Fed.", "opinion_index": -1 }, { "cite": "79 ALR2d 1126", "category": "reporters:specialty", "reporter": "A.L.R. 2d", "opinion_index": -1 }, { "cite": "269 S.E.2d 547", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1980, "opinion_index": -1 }, { "cite": "300 N.C. 381", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8562647 ], "year": 1980, "opinion_index": -1, "case_paths": [ "/nc/300/0381-01" ] }, { "cite": "30 ALR Fed. 714", "category": "reporters:federal", "reporter": "A.L.R. Fed.", "opinion_index": -1 }, { "cite": "329 S.E.2d 389", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1985, "opinion_index": 0 }, { "cite": "313 N.C. 506", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4724648, 4719920, 4726261, 4722874, 4721598 ], "year": 1985, "opinion_index": 0, "case_paths": [ "/nc/313/0506-04", "/nc/313/0506-03", "/nc/313/0506-05", "/nc/313/0506-01", "/nc/313/0506-02" ] }, { "cite": "321 S.E.2d 502", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1984, "pin_cites": [ { "page": "506" } ], "opinion_index": 0 }, { "cite": "71 N.C. App. 48", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8523740 ], "year": 1984, "pin_cites": [ { "page": "52" } ], "opinion_index": 0, "case_paths": [ "/nc-app/71/0048-01" ] }, { "cite": "346 S.E.2d 139", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1986, "opinion_index": 0 }, { "cite": "317 N.C. 334", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4780326, 4777709, 4778478, 4779983, 4776954 ], "year": 1986, "opinion_index": 0, "case_paths": [ "/nc/317/0334-03", "/nc/317/0334-02", "/nc/317/0334-05", "/nc/317/0334-01", "/nc/317/0334-04" ] }, { "cite": "341 S.E.2d 588", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1986, "pin_cites": [ { "page": "598" } ], "opinion_index": 0 }, { "cite": "80 N.C. App. 1", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8521697 ], "year": 1986, "pin_cites": [ { "page": "18" } ], "opinion_index": 0, "case_paths": [ "/nc-app/80/0001-01" ] }, { "cite": "221 S.E.2d 307", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1976, "pin_cites": [ { "page": "311" } ], "opinion_index": 0 }, { "cite": "289 N.C. 95", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8566779 ], "year": 1976, "pin_cites": [ { "page": "101" } ], "opinion_index": 0, "case_paths": [ "/nc/289/0095-01" ] }, { "cite": "345 S.E.2d 423", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1986, "pin_cites": [ { "page": "425-26", "parenthetical": "quoting In re Moore, 289 N.C. 95, 101, 221 S.E.2d 307, 311 (1976)" } ], "opinion_index": 0 }, { "cite": "82 N.C. App. 107", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8358342 ], "year": 1986, "pin_cites": [ { "page": "111", "parenthetical": "quoting In re Moore, 289 N.C. 95, 101, 221 S.E.2d 307, 311 (1976)" } ], "opinion_index": 0, "case_paths": [ "/nc-app/82/0107-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 58-33-120", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "year": 1994, "opinion_index": 0 }, { "cite": "N.C. Gen. Stat. \u00a7 58-33-25", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "year": 1996, "opinion_index": 0 }, { "cite": "53 N.C.L. Rev. 833", "category": "journals:journal", "reporter": "N.C. L. Rev.", "year": 1975, "pin_cites": [ { "page": "899" } ], "opinion_index": 0 }, { "cite": "256 S.E.2d 808", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1979, "opinion_index": 0 }, { "cite": "297 N.C. 455", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8571493, 8571377, 8571411, 8571448, 8571353 ], "year": 1979, "opinion_index": 0, "case_paths": [ "/nc/297/0455-05", "/nc/297/0455-02", "/nc/297/0455-03", "/nc/297/0455-04", "/nc/297/0455-01" ] }, { "cite": "253 S.E.2d 44", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1979, "pin_cites": [ { "page": "46" } ], "opinion_index": 0 }, { "cite": "40 N.C. App. 376", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8550604 ], "year": 1979, "pin_cites": [ { "page": "379" } ], "opinion_index": 0, "case_paths": [ "/nc-app/40/0376-01" ] }, { "cite": "293 S.E.2d 171", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1982, "pin_cites": [ { "page": "176" } ], "opinion_index": 0 }, { "cite": "306 N.C. 231", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8568091 ], "year": 1982, "pin_cites": [ { "page": "238" } ], "opinion_index": 0, "case_paths": [ "/nc/306/0231-01" ] }, { "cite": "435 S.E.2d 359", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1993, "pin_cites": [ { "page": "363" } ], "opinion_index": 0 }, { "cite": "112 N.C. App. 161", "category": "reporters:state", "reporter": "N.C. 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Stat.", "year": 1994, "opinion_index": 0 }, { "cite": "269 S.E.2d 547", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 7, "year": 1980, "pin_cites": [ { "page": "568" }, { "page": "568" }, { "page": "568" }, { "page": "568" }, { "page": "568" }, { "page": "568" } ], "opinion_index": 0 }, { "cite": "300 N.C. 381", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8562647 ], "weight": 3, "year": 1980, "pin_cites": [ { "page": "411" }, { "page": "411-12" } ], "opinion_index": 0, "case_paths": [ "/nc/300/0381-01" ] } ], "analysis": { "cardinality": 998, "char_count": 27721, "ocr_confidence": 0.744, "pagerank": { "raw": 1.475176379803346e-07, "percentile": 0.6600384810079661 }, "sha256": "436f1eed77e48a9be2f769c3633bc4aa1ed8e3beba5ee1a4079f45399b842a43", "simhash": "1:89e7c72eb7a7fc18", "word_count": 4327 }, "last_updated": "2023-07-14T19:11:14.463583+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges JOHN and SMITH concur." ], "parties": [ "BENEFICIAL NORTH CAROLINA, INC., Petitioner/Appellant v. STATE OF NORTH CAROLINA ex. rel. THE NORTH CAROLINA STATE BANKING COMMISSION, Respondent/Appellee v. GLORIA DELOATCH, Respondent/Intervenor/Appellee" ], "opinions": [ { "text": "McGEE, Judge.\nThis appeal arises from an application by Beneficial North Carolina, Inc. (BNCI) under the North Carolina Consumer Finance Act (CFA), N.C. Gen. Stat. section 53-164 et seq., to sell a form of noncredit disability insurance known as Liberator Income Protector Plan (LIPP) in conjunction with its consumer loan business.\nOn 3 March 1993, BNCI applied to the Commissioner of Banks for North Carolina (Commissioner) for other business authority under N.C. Gen. Stat. section 53-172 of the CFA to sell LIPP on the same premises where BNCI conducts its loan business. The Commissioner denied BNCTs application, and BNCI petitioned the North Carolina State Banking Commission (Commission) for review. After review, the Commission remanded the matter to the Commissioner for an evi-dentiary hearing. On 23 December 1993, the Commissioner allowed Gloria Deloatch to intervene on behalf of herself and a class of low income consumers.\nAt the evidentiary hearing, BNCI presented the following evidence regarding its proposed sale of LIPP in conjunction with its consumer loan business. At the time of its application, BNCI was already selling credit insurance with its loans as permitted by N.C. Gen. Stat. section 53-189. The LIPP product BNCI proposed to sell is non-credit income replacement disability insurance. Unlike credit insurance, LIPP benefits do not pay off the balance of the loan but are paid directly to the claimant. As with its credit insurance, BNCI would give its customers the option to finance the full premium for LIPP coverage in advance as part of the loan principal. LIPP is underwritten by Old Republic Life Insurance Company (Old Republic), and the policy form has been approved by the North Carolina Department of Insurance.\nPurchase of LIPP by BNCI\u2019s loan customers would be voluntary, and more specifically, would not be a condition for loan approval. Purchasers would be given a thirty day right of cancellation for full refund of the premium and a pro rata refund for cancellation after thirty days. The refund would be paid directly to the purchaser, would not be applied automatically to reduce the indebtedness, and BNCI would not re-amortize the loan. LIPP purchasers would be required to sign a request and authorization form containing disclosures regarding their cancellation rights, payment and financing options, and the voluntary nature of the coverage. Although its office managers and assistant branch managers would become licensed insurance agents in order to sell LIPP, other employees, not licensed as insurance agents, would be involved in general solicitation activity for LIPP. BNCI\u2019s witnesses testified that, in their opinion, the sale of LIPP by BNCI would not be contrary to the best interests of the borrowing public.\nIntervenor Gloria Deloatch presented the testimony of Carlene McNulty, a legal aid attorney qualified as an expert in counseling clients with CEA loans. McNulty testified that her clients are usually desperate to borrow money, tend to sign whatever document is placed in front of them, and are often unaware that they have purchased insurance along with their loans. She testified that in most cases the loan documents are prepared in advance by the finance company with the insurance premiums already factored into the loan terms. She also testified that clients do not usually differentiate between credit and non-credit insurance sold with their loans. In McNulty\u2019s opinion, BNCI\u2019s proposed sale of LIPP in conjunction with its consumer loan business would be contrary to the best interests of the borrowing public.\nOn 11 August 1994, the Commissioner issued an order containing findings of fact and conclusions of law and denying BNCI\u2019s application. In this order, the Commissioner conditionally offered to approve BNCI\u2019s application if BNCI would institute specified disclosure procedures as to both LIPP and credit insurance sales and would certify that all loan officers involved in the sale of LIPP in conjunction with CFA loans were fully licensed insurance agents. BNCI appealed to the Commission which adopted and affirmed the Commissioner\u2019s order on 28 October 1994. BNCI then petitioned for judicial review in Wake County Superior Court. In a memorandum of decision filed 15 December 1995 and judgment entered 25 January 1996, Judge Henry V. Barnette, Jr. affirmed the Commission\u2019s decision. BNCI appeals.\nBefore addressing BNCI\u2019s contentions, we summarize the statutory context of this appeal. Under the CFA, licensed consumer finance lenders are permitted to charge higher rates of interest than conventional lenders. See N.C. Gen. Stat. \u00a7 53-166 (1994); N.C. Gen. Stat. \u00a7 173 (1994); N.C. Gen. Stat. \u00a7 53-176 (1994). In return for the authority to charge higher interest rates under the CFA, consumer finance lenders are subject to licensing and regulation by the Commissioner. See G.S. \u00a7 53-166. Under the CFA, licensed lenders are allowed to sell various forms of credit insurance along with their loans. See N.C. Gen. Stat. \u00a7 53-189 (1994). However, they are not permitted to solicit or transact any \u201cother business\u201d in the same business location where they make their loans unless the Commissioner authorizes the other business as provided in N.C. Gen. Stat. section 53-172. It is the Commissioner\u2019s refusal, as upheld by the Commission and by the superior court, to authorize such other business as requested by BNCI, that is at issue in this appeal.\nBNCI contends the superior court should have reversed the Commission\u2019s decision on the ground that BNCI\u2019s substantial rights have been prejudiced for all of the reasons set forth in N.C. Gen. Stat. section 150B-51(b) of the N.C. Administrative Procedure Act (NCAPA). We first summarize the applicable standard and grounds for review and then address the reasons for reversal asserted by BNCI.\nI.\nThe proper standard of review for the superior court of a final agency decision \u201cdepends upon the particular issues presented on appeal.\u201d Act-Up Triangle v. Commission for Health Services, 345 N.C. 699, 483 S.E.2d 388 (1997); Amanini v. N.C. Dept. of Human Resources, 114 N.C. App. 668, 674, 443 S.E.2d 114, 118 (1994). N.C. Gen. Stat. section 150B-51(b) provides:\n[T]he court reviewing a final decision may affirm the decision of the agency or remand the case for further proceedings. It may also reverse or modify the agency\u2019s decision if the substantial rights of the petitioners may have been prejudiced because the agency\u2019s findings, inferences, conclusions, or decisions are:\n(1) In violation of constitutional provisions;\n(2) In excess of the statutory authority or jurisdiction of the agency;\n(3) Made upon unlawful procedure;\n(4) Affected by other error of law;\n(5) Unsupported by substantial evidence admissible under G.S. 150B-29(a), 150B-30, or 150B-31 in view of the entire record as submitted; or\n(6) Arbitrary or capricious.\nG.S. \u00a7 150B-51(b) (1995).\nJudicial review of whether an agency decision was based on an error of law requires a de novo review. Walker v. N.C. Dept. of Human Resources, 100 N.C. App. 498, 502, 397 S.E.2d 350, 354 (1990), disc. review denied, 328 N.C. 98, 402 S.E.2d 430 (1991). When the petitioner questions \u201c(1) whether the agency\u2019s decision was supported by the evidence or (2) whether the decision was arbitrary or capricious,\u201d the \u201cwhole record\u201d test must be applied. In re Appeal by McCrary, 112 N.C. App. 161, 165, 435 S.E.2d 359, 363 (1993). The \u201cwhole record\u201d test \u201crequires the reviewing court to examine all competent evidence (the \u2018whole record\u2019) in order to determine whether the agency decision is supported by \u2018substantial evidence.\u2019 \u201d Amanini, 114 N.C. App. at 674, 443 S.E.2d at 118. Substantial evidence is \u201cmore than a scintilla\u201d and is \u201csuch relevant evidence as a reasonable mind might accept as adequate to support a conclusion.\u201d Lackey v. Dept. of Human Resources, 306 N.C. 231, 238, 293 S.E.2d 171, 176 (1982).\nThe standard of review for an appellate court when reviewing a superior court order affirming or reversing a decision of an administrative agency requires the appellate court to examine \u201cthe trial court\u2019s order for error of law\u201d just as in any other civil case. Act-Up Triangle, 345 N.C. at 706, 483 S.E.2d at 392 (quoting Amanini, 114 N.C. App. at 675, 443 S.E.2d at 118-19). \u201cThe process has been described as a twofold task: (1) determining whether the trial court exercised the appropriate scope of review and, if appropriate, (2) deciding whether the court did so properly.\u201d Id. (quoting Amanini, 114 N.C. App. At 675, 443 S.E.2d at 118-19).\nThe trial court in this case properly employed the correct standard of review of the Commission\u2019s order and the order of the trial court stated it had considered the entire record in affirming the Commission\u2019s decision. Upon review of the issues raised by BNCI, we hold the trial court did not err in affirming the decision of the Commission.\nII.\nBNCI first asserts its substantial rights were prejudiced by the Commission\u2019s failure to engage in rule-making regarding other business authority under G.S. section 53-172 of the CEA. BNCI contends this failure to make rules requires reversal under G.S. section 150B-51(b). The State contends BNCI\u2019s contention is outside the narrow scope of judicial review provided for this adjudicatory proceeding in G.S. section 150B-51.\nWe agree with the State that this first issue is outside the scope of judicial review for this particular proceeding. \u201c[T]he settled law in this State provides that when the legislature has established an effective administrative remedy, it is exclusive.\u201d Porter v. Dept. of Insurance, 40 N.C. App. 376, 379, 253 S.E.2d 44, 46, disc. review denied, 297 N.C. 455, 256 S.E.2d 808 (1979). N.C. Gen. Stat. section 150B-20 of the NCAPA provides a mechanism for BNCI to petition the Commission to adopt a rule and then to obtain judicial review of the denial of a rule-making petition. See N.C. Gen. Stat. \u00a7 150B-20 (Cum. Supp. 1996); Act-Up Triangle v. Commission for Health Services, 345 N.C. 699, 483 S.E.2d 388 (1997). There is also a Commission rule which permits \u201cany person\u201d to submit a petition \u201crequesting the adoption, amendment, or repeal of a rule.\u201d N.C. Admin. Code tit. 4, r. 3B.0101 (February 1976).\nJudicial review in this case arises from an adjudicatory decision and not from a denial of a petition for rule-making. Thus, we are limited to review of the Commission\u2019s adjudicatory decision. This is not the proper context for BNCI to challenge the Commission\u2019s decision not to engage in rule-making regarding other business authority under G.S. section 53-172.\nBNCI next contends the findings of fact and conclusions of law in the Commission\u2019s decision establish that the Commission improperly applied unpromulgated rules in denying its application.\nWe first examine whether the Commission engaged in rule-making in issuing its decision on petitioner\u2019s application. The definition section of the NCAPA defines a rule, in pertinent part, as:\nany agency regulation, standard, or statement of general applicability that implements or interprets an enactment of the General Assembly or Congress or a regulation adopted by a federal agency or that describes the procedure or practice requirements of an agency .... The term does not include the following: . . . [inter alia] e. Statements of agency policy made in the context of another proceeding.\nN.C. Gen. Stat. \u00a7 150B-2(8a) (Cum. Supp. 1996) (emphasis added). In Comr. of Insurance v. Rate Bureau, 300 N.C. 381, 269 S.E.2d 547 (1980), our Supreme Court distinguished between legislative rules and interpretative rules because interpretative rules are excluded from the rule-making requirements of the NCAPA whereas substantive legislative rules generally are not. Rate Bureau, 300 N.C. at 411, 269 S.E.2d at 568.\nUnder Rate Bureau, the relevant inquiry here is whether the Commission\u2019s decision shows it is based on unpromulgated legislative rules. See id. at 411-12, 269 S.E.2d at 568. Rate Bureau defines legislative rules as those that: (1) operate to \u201c \u2018fill the interstices of the statutes\u2019 \u201d, and (2) \u201c \u2018go beyond mere interpretation of statutory language or application of such language and within statutory limits set down additional substantive requirements.\u2019 \u201d Id. at 411, 269 S.E.2d at 568 (quoting Charles E. Daye, North Carolina\u2019s New Administrative Procedure Act: An Interpretive Analysis, 53 N.C.L. Rev. 833, 899 (1975)). In Rate Bureau, our Supreme Court also stated that agency imposition of sanctions for violation of a purported \u201clegislative rule\u201d was indicative of whether the rule imposed new substantive requirements. Id. at 412, 269 S.E.2d at 568.\nWe conclude the Commission\u2019s decision does not consist of legislative rules and that, therefore, the Commission did not apply unpromulgated rules in denying BNCI\u2019s application. BNCI contends the following findings in the Commission\u2019s decision constitute \u201cunpromulgated rules:\u201d (1) its findings regarding loss ratios on BNCI\u2019s credit insurance products; (2) its finding that LIPP purchasers who cancel coverage would not receive an automatic reduction of their indebtedness but would have to forward the refund to BNCI to pay off that portion of the debt; (3) its finding that BNCI had no plans to assist LIPP claimants in filing claims; (4) its finding that LIPP claimants will be required to provide multiple medical certifications of disability even when the cost of obtaining the certifications is a financial hardship for the claimant; (5) its finding that BNCI made no assurances that only fully licensed insurance agents would be involved in the sale of LIPP; (6) the Commission\u2019s conditional approval of LIPP if BNCI made certain disclosures to its customers in regard to both its credit and non-credit products.\nFirst, these specific findings are not regulations, standards, or statements of \u201cgeneral applicability\u201d under the G.S. section 150B-2(8a) definition of a rule in that they are specific to and descriptive of BNCI\u2019s proposed sale of LIPP. These findings highlight the Commission\u2019s concerns with BNCI\u2019s application to sell LIPP but are not couched as comprehensive principles to be applied to the proposed sale of similar products by other CFA licensees.\nIn addition, these findings do not fill the interstices of G.S. section 53-172, the relevant statutory provision. In general, G.S. section 53-172 prohibits a CFA licensee from conducting its CFA loan business \u201cwithin any office, suite, room, or place of business in which any other business is solicited or transacted.\u201d G.S. \u00a7 53-172(a) (1994) (emphasis added). This statute also provides that the Commissioner \u201cmay authorize\u201d such other business \u201cif the Commissioner determines that the other business would not be contrary to the best interests of the borrowing public.\u201d G.S. \u00a7 53-172(b) (1994) (emphasis added). However, the statutory use of the word \u201cmay\u201d indicates the Commissioner has the discretion to determine whether such other business should be permitted. The structure and language of the statute also indicate that such authorization operates as an exception to the general prohibition against conduct of such other business by CFA licensees in the same location as their CFA loan business.\nApplication of the statutory standard \u201cnot... contrary to the best interests of the borrowing public\u201d is likely to vary based on the peculiar characteristics of the other business applicant and the method by which the other business is to be promoted by the applicant. Nothing in the Commission\u2019s decision indicates that the concerns expressed in its findings are applicable to other applicants or give additional substantive meaning to fill the interstices of the \u201cnot. . . contrary to the best interests of the borrowing public\u201d standard. The concerns expressed are specific to BNCI\u2019s application and simply serve to support the Commission\u2019s conclusion that BNCI failed to establish that its proposed sale of LIPP in conjunction with its CFA loan business would not be contrary to the best interests of the borrowing public.\nIn Rate Bureau, the Court also examined whether the purported legislative rules at issue imposed additional substantive requirements. Rate Bureau, 300 N.C. at 411-12, 269 S.E.2d at 568. Here, we find the Commission\u2019s concerns regarding BNCl\u2019s loss ratios, its cancellation refund policy, its disinclination to assist claimants in filing claims, and its disability certification procedure do not impose additional substantive requirements. The Commission\u2019s willingness conditionally to approve BNCl\u2019s application despite these concerns suggests they were not, in themselves, essential to approval. That is, unlike the audited data requirement in Rate Bureau, these findings were not applied \u201cwith sanctions.\u201d See id. at 412, 269 S.E.2d at 568.\nThe Commission\u2019s concern regarding BNCI\u2019s plans to involve unlicensed employees in LIPP sales also does not impose an additional substantive requirement. Solicitation of insurance contracts by persons who are not licensed insurance agents is already prohibited under Chapter 58, Article 33 of the General Statutes. See N.C. Gen. Stat. \u00a7 58-33-25 (Cum. Supp. 1996); N.C. Gen. Stat. \u00a7 58-33-120 (1994). The Commission\u2019s findings and expressions of concern as to BNCI\u2019s compliance with these existing statutory requirements were simply factors the Commission assessed in determining whether BNCI\u2019s proposed manner of selling LIPP would be contrary to the best interests of the borrowing public.\nIn regard to the disclosure requirements for conditional approval, we conclude these also do not impose new substantive requirements. These conditional approval requirements simply represent an attempt by the Commission to offer a fair compromise that would permit BNCI to sell LIPP in conjunction with its loan business in a manner that would alleviate the Commission\u2019s concerns that consumers be made fully aware of the financial implications of purchasing LIPP in conjunction with their loans. In sum, the findings and conclusions made by the Commission were neither rules as defined in G.S. section 150B-2(8a) nor legislative rules under Rate Bureau. We hold the Commission did not apply unpromulgated rules in denying BNCI\u2019s application.\nBNCI next contends the Commission failed to follow statutory \u201cguidelines\u201d set out in subsections (c), (d), and (e) of G.S. section 53-172 in denying its application. We disagree with BNCI\u2019s interpretation of G.S. section 53-172.\nSubsection (c) of G.S. section 53-172 sets out requirements which the Commissioner \u201cmay\u201d impose on an authorized other business. See G.S. \u00a7 53-172(c). Subsections (d) and (e) of G.S. section 53-172 impose automatic requirements applicable to any licensee who obtains other business authorization from the Commissioner. See G.S. \u00a7 53-172(d)(e). These subsections, denominated by BNCI as \u201cguidelines\u201d for approval or disapproval of an other business application, are not set out in G.S. section 53-172 as guidelines for the Commissioner\u2019s determination of whether a proposed \u201cother business\u201d is \u201cnot . . . contrary to the best interests of the borrowing public.\u201d Rather, these provisions apply after the Commissioner authorizes the other business upon a finding that it is not contrary to the best interests of the borrowing public. That is, even when an \u201cother business\u201d is authorized, it still must comply with subsections (d) and (e) of G.S. section 53-172 and may be required to comply with subsection (c) of G.S. section 53-172. We hold the Commission did not err by denying BNCI\u2019s application despite its willingness to comply with subsections (c), (d), and (e) of G.S. section 53-172, and that the Commission\u2019s decision is consistent with G.S. section 53-172.\nBNCI further contends the Commission\u2019s decision violated its substantive due process rights because there is no reasonable relationship between the decision and the legislative intent expressed in G.S. section 53-172.\n\u201c[S]ubstantive due process denotes a standard of reasonableness and limits a state\u2019s exercise of its police power .... \u2018The traditional substantive due process test has been that a statute must have a rational relation to a valid state objective.\u2019 \u201d In re Petition of Kermit Smith, 82 N.C. App. 107, 111, 345 S.E.2d 423, 425-26 (1986) (quoting In re Moore, 289 N.C. 95, 101, 221 S.E.2d 307, 311 (1976)).\nWe first note the cases cited by BNCI apply this traditional substantive due process test to statutes and agency rules. However, BNCI does not challenge the validity of any statutes or rules. Rather, it contends the traditional substantive due process test should be applied to invalidate the Commission\u2019s adjudicatory decision. Without deciding whether this test applies to agency adjudicatory decisions, we conclude that, when this test is applied as requested by BNCI, the Commission\u2019s decision did not violate BNCI\u2019s substantive due process rights.\nThe Commission\u2019s decision, as supported by its findings and conclusions and by substantial record evidence, is rationally related to the G.S. section 53-172 goal of protecting the best interests of the borrowing public. The Commission\u2019s decision shows the Commission perceived that BNCI\u2019s proposed method of selling its LIPP insurance would likely result in the accumulation of unnecessary debt by its loan customers without presenting these persons a fair opportunity to make an informed choice regarding the purchase of LIPP. The concerns expressed in the decision focus directly on and are relevant to the best interests of the borrowing public. We find no substantive due process infirmities in the Commission\u2019s decision.\nWe note further that BNCI has not been deprived of a right to sell its LIPP insurance in conjunction with its CFA loan business. In G.S. section 53-172, the General Assembly has determined that there is no such right, and that, in fact, such other business is prohibited unless the Commissioner decides to authorize it. This does not mean that BNCI cannot sell LIPP at all. It simply may not do so in the same location where it conducts its CFA licensed loan business.\nIn its brief, BNCI also contends the Commission\u2019s decision violated its procedural due process rights. However, since BNCI has not presented any argument in support of this contention, it is deemed abandoned. See N.C.R. App. P. 28(b)(5) (1997); In re Appeal from Environmental Management Comm., 80 N.C. App. 1, 18, 341 S.E.2d 588, 598, disc. review denied, 317 N.C. 334, 346 S.E.2d 139 (1986).\nFinally, BNCI contends the Commission\u2019s decision was arbitrary and capricious. An arbitrary or capricious decision is one \u201cwithout any rational basis in the record.\u201d Abell v. Nash County Bd. of Education, 71 N.C. App. 48, 52, 321 S.E.2d 502, 506 (1984), disc. review denied, 313 N.C. 506, 329 S.E.2d 389 (1985). The Commission\u2019s decision contains detailed findings of fact and conclusions of law which rationally support its denial of BNCI\u2019s application. In addition, we find the Commission\u2019s decision supported by substantial evidence in the record. We hold the Commission\u2019s decision has a rational basis in the whole record and was not arbitrary or capricious.\nThe trial court did not err by upholding the Commission\u2019s decision.\nAffirmed.\nJudges JOHN and SMITH concur.", "type": "majority", "author": "McGEE, Judge." } ], "attorneys": [ "The Sanford Law Firm, by Kurt E. Lindquist II and Deanna L. Davis, for petitioner-appellant.", "Attorney General Michael F Easley, by Assistant Attorney General L. McNeil Chestnut and Assistant Attorney General Philip A. Lehman, for respondent-appellee.", "North Carolina Justice and Community Development Center, by Robert M. Schofield, for respondent-intervenor-appellee." ], "corrections": "", "head_matter": "BENEFICIAL NORTH CAROLINA, INC., Petitioner/Appellant v. STATE OF NORTH CAROLINA ex. rel. THE NORTH CAROLINA STATE BANKING COMMISSION, Respondent/Appellee v. GLORIA DELOATCH, Respondent/Intervenor/Appellee\nNo. COA96-566\n(Filed 6 May 1997)\n1. Administrative Law and Procedure \u00a7 67 (NCI4th)\u2014 agency decision \u2014 de novo review \u2014 whole record test\nIn an appeal arising from plaintiffs application to sell noncredit disability insurance in conjunction with its consumer loan business, the trial court did not err in affirming the Banking Commission\u2019s decision where the trial court conducted a de novo review of the Commission\u2019s order and the order of the trial court stated it had considered the entire record in affirming the Commission\u2019s decision.\nAm Jur 2d, Administrative Law \u00a7\u00a7 522, 540, 646.\n2. Administrative Law and Procedure \u00a7 65 (NCI4th)\u2014 agency decision \u2014 failure to engage in rule-making \u2014 issue not presented on appeal\nPetitioner\u2019s contention that its substantial rights were prejudiced by the Banking Commissions\u2019s failure to engage in rule-making regarding other business authority under N.C.G.S. \u00a7 53-172 of the Consumer Finance Act was outside the scope of judicial review for this particular proceeding where the judicial review arises from an adjudicatory decision and not from the denial of a rule-making petition.\nAm Jur 2d, Administrative Law \u00a7 575.\nSovereign immunity as precluding or limiting application of judicial review provisions of Administrative Procedure Act (5 USCS \u00a7\u00a7 701 et seq.). 30 ALR Fed. 714.\n3. Consumer and Borrower Protection \u00a7 14 (NCI4th)\u2014 noncredit insurance \u2014 Consumer Finance Act \u2014 unpromulgated rules not applied\nThe Banking Commission did not apply unpromulgated legislative rules in denying plaintiff consumer finance company\u2019s application to sell noncredit disability insurance as \u201cother business\u201d where the findings and conclusions made by the Commission were neither rules as defined in N.C.G.S. \u00a7 150B-2(8a) nor legislative rules under Comr. of Insurance v. Rate Bureau, 300 N.C. 381, 269 S.E.2d 547 (1980).\nAm Jur 2d, Administrative Law \u00a7\u00a7 178, 524; Markets and Marketing \u00a7 39.\nStare decisis doctrine as applicable to decisions of administrative agencies. 79 ALR2d 1126.\n4. Consumer and Borrower Protection \u00a7 14 (NCI4th)\u2014 Consumer Finance Act \u2014 other business \u2014 noncredit disability insurance \u2014 willingness to comply with statutes \u2014 denial of application\nThe Banking Commission did not err in denying plaintiff consumer finance company\u2019s application to sell noncredit disability insurance as \u201cother business\u201d despite plaintiff\u2019s willingness to comply with subsections (c), (d), and (e) of N.C.G.S. \u00a7 53-172 because those subsections apply only after the Commissioner authorizes other business upon a finding that it is not contrary to the best interests of the borrowing public.\nAm Jur 2d, Administrative Law \u00a7\u00a7 248, 391; Insurance \u00a7 32.\n5. Consumer and Borrower Protection \u00a7 14 (NCI4th)\u2014 Consumer Finance Act \u2014 noncredit disability insurance\u2014 denial of application \u2014 substantive due process \u2014 not arbitrary and capricious\nThe Banking Commission\u2019s denial of plaintiff consumer finance company\u2019s application to sell noncredit disability insurance as \u201cother business\u201d did not violate plaintiff\u2019s substantive due process rights since the Commission\u2019s decision was rationally related to the N.C.G.S. \u00a7 53-172 goal of protecting the best interests of the public, and plaintiff may sell such insurance in a location where it does not conduct its licensed loan business. Nor was the Commission\u2019s decision arbitrary and capricious because it has a rational basis in the whole record.\nAm Jur 2d, Administrative Law \u00a7\u00a7 248, 253; Insurance \u00a7 32.\nStatement of reasons under Administrative Procedure Act (5 USCS \u00a7 555(e)), for denial of written application, petition, or other request of interested person made in connection with agency proceeding. 57 ALR Fed. 765.\nAppeal by petitioner from judgment entered 25 January 1996 by Judge Henry V. Barnette, Jr. in Wake County Superior Court. Heard in the Court of Appeals 30 January 1997.\nThe Sanford Law Firm, by Kurt E. Lindquist II and Deanna L. Davis, for petitioner-appellant.\nAttorney General Michael F Easley, by Assistant Attorney General L. McNeil Chestnut and Assistant Attorney General Philip A. Lehman, for respondent-appellee.\nNorth Carolina Justice and Community Development Center, by Robert M. Schofield, for respondent-intervenor-appellee." }, "file_name": "0117-01", "first_page_order": 155, "last_page_order": 167 }