DEO asks court to deny rehearing in small-business loan dispute
Florida's 1st District Court of Appeal

1stDCA

Florida’s Department of Economic Opportunity (DEO) is asking an appeals court to deny a small business lender’s request to reconsider an opinion against it involving a legislatively created, post-recession loan program.

The 1st District Court of Appeal had agreed with a lower court that the Black Business Investment Fund of Central Florida had overcharged lenders in the Economic Gardening Business Loan Pilot Program and should have returned the money.

The fund later filed a request for reconsideration. The department, which coordinated the loan program, filed its opposition last week.

The fund “wants this Court to believe it was unwittingly duped into charging a loan-servicing fee that was in excess of the statutorily-authorized rate (but the) dealing between the parties does not support that claim,” its filing said.

“Even after BBIF was told in no uncertain terms that it was charging an unauthorized loan servicing fee … (it) resumed its collection of loan-servicing fees twelve times higher than the statutorily and contract-authorized rate.”

The program in question, a low-interest loan program for the state’s small businesses, was created by lawmakers in 2009 as a response to the then-ongoing recession.

The program set aside “$8.5 million to provide low-interest loans to small businesses around the state,” the decision said. The investment fund was picked as a loan administrator.

The program allowed administrators to get a loan origination fee, payable at closing, of 1 percent of each loan and to take a yearly “servicing fee” of 0.625 percent of a loan’s outstanding principal balance, the ruling said.

But DEO soon told the fund that it had misunderstood the calculations and demanded it return fees and money not yet loaned. That’s because the fund incorrectly charged a monthly fee of 0.625 percent, rather than an annual fee of the same rate.

The investment fund didn’t comply and the agency sued on breach of contract and conversion claims. Conversion is broadly defined as a civil-law form of theft, or wrongly taking someone else’s property or money for one’s own use.

A lower court granted summary judgment, awarding $1.1 million in damages to DEO. A three-judge appellate panel agreed.

Jim Rosica

Jim Rosica is the Tallahassee-based Senior Editor for Florida Politics. He previously was the Tampa Tribune’s statehouse reporter. Before that, he covered three legislative sessions in Florida for The Associated Press. Jim graduated from law school in 2009 after spending nearly a decade covering courts for the Tallahassee Democrat, including reporting on the 2000 presidential recount. He can be reached at [email protected].



#FlaPol

Florida Politics is a statewide, new media platform covering campaigns, elections, government, policy, and lobbying in Florida. This platform and all of its content are owned by Extensive Enterprises Media.

Publisher: Peter Schorsch @PeterSchorschFL

Contributors & reporters: Phil Ammann, Drew Dixon, Roseanne Dunkelberger, A.G. Gancarski, William March, Ryan Nicol, Jacob Ogles, Cole Pepper, Jesse Scheckner, Drew Wilson, and Mike Wright.

Email: [email protected]
Twitter: @PeterSchorschFL
Phone: (727) 642-3162
Address: 204 37th Avenue North #182
St. Petersburg, Florida 33704