Jim Rosica
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.
