Gilmore v. Pawn King, Inc ( 2014 )

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GILMORE v. PAWN KING, INC.—DISSENT
ESPINOSA, J., dissenting. The certified questions
from the United States District Court for the District
of Connecticut1 present us with a choice among three
alternatives. The first alternative is to conclude that,
consistent with our prior statutory interpretation, a rate
limiting statute within the pawnbroking statutory
scheme, General Statutes § 21-44,2 regulates the rates
that pawnbrokers may charge in repurchase transac-
tions. The second choice is to conclude that the general
usury statute, General Statutes § 37-4,3 which expressly
exempts pawnbrokers from its scope, nonetheless regu-
lates pawnbrokers and restricts the rates that they may
charge in repurchase transactions. Finally, we could
conclude that there are no limits on the rates that pawn-
brokers may charge for repurchase transactions, a prop-
osition that we rejected in the same decision in which
we concluded that pawnbrokers are indeed governed
by the pawnbroking statutes when they loan money to
clients, even when the pawnbrokers designate the loan
by another name. See Rhodes v. Hartford, 201 Conn.
89, 513 A.2d 124 (1986).
Like the District Court, I conclude that the reasonable
interpretation of the sparse legislative record accompa-
nying the 1997 amendment to § 21-44; Public Acts 1997,
No. 97-164, § 5 (P.A. 97-164); is that it fails to reveal a
clear intent to overrule Rhodes, and, therefore, this
court’s interpretation of General Statutes (Rev. to 1985)
§ 21-44 in Rhodes controls. By contrast, contrary to
our prior interpretation of the pawnbroking statutes in
Rhodes and in the absence of any clear evidence of
legislative intent to overrule that decision, the majority
concludes today that the rate restrictions of § 21-44 do
not apply to a pawnbroker’s loan of money upon the
deposit of personal property, so long as the pawnbroker
has designated that loan by the name ‘‘repurchase trans-
action’’ rather than ‘‘pawnbroking loan.’’ Instead, in
direct contradiction to the express exclusion of pawn-
brokers from the rate restrictions set forth in § 37-4,
the majority concludes that, if pawnbrokers assign the
label ‘‘repurchase transaction’’ to a transaction involv-
ing the loan of money on the deposit of personal prop-
erty, § 37-4 does, in fact, apply to pawnbrokers. For two
reasons, I cannot agree with the majority’s conclusions.
First, the majority’s conclusion that § 21-44 does not
apply to repurchase transactions runs counter to our
case law, in which we consistently have required
unequivocal evidence of legislative intent before con-
cluding that the legislature overruled one of our deci-
sions interpreting a statute. The majority accomplishes
this result without ever expressly addressing the ques-
tion of whether the legislature intended to overrule
Rhodes through its enactment of P.A. 97-164, thereby
injecting uncertainty into the precedential force and
effect of this court’s interpretive decisions. Second,
even if I agreed with the majority’s unspoken holding
that Rhodes has been legislatively overruled, I could not
agree with its conclusion that § 37-4 governs repurchase
transactions, which: (1) is inconsistent with the plain
language of the statute exempting pawnbrokers from
the rates set forth therein; (2) relies on a series of
unsupported assumptions regarding the legislative
intent underlying P.A. 97-164; and (3) fails to give proper
effect to this court’s prior interpretation of the relevant
statutory language in § 37-4. Rather than follow the
convoluted path taken by the majority to its interpreta-
tion of § 37-4, I would hold that, if the legislature over-
ruled Rhodes, a proposition with which I disagree, the
only logical conclusion remaining would be that the
legislature intended to allow pawnbrokers to charge
any rate, without limit, to the loan of money on the
deposit of personal property, so long as pawnbrokers
use the label ‘‘repurchase transactions.’’ As I have
already stated, I would conclude that Rhodes continues
to control, and that a pawnbroker’s repurchase transac-
tions are governed by § 21-44 of the pawnbroking stat-
utes. Accordingly, I respectfully dissent.
I
REPURCHASE TRANSACTIONS ARE GOVERNED
BY THE PAWNBROKING STATUTES
The majority acknowledges that in Rhodes v. Hart-
ford, supra, 201 Conn. 89, this court interpreted General
Statutes (Rev. to 1985) § 21-44 to govern repurchase
transactions, but the majority then lays the foundation
for its subsequent analysis by characterizing the ratio-
nale of Rhodes very narrowly. Without directly stating
so, the majority infers that the legislature overruled
Rhodes by deleting the phrase ‘‘directly or indirectly’’
from § 21-44; P.A. 97-164; despite the equivocal nature
of the substantive changes to § 21-44 made by the 1997
amendment, the eleven year gap between the publica-
tion of Rhodes and the 1997 amendment to § 21-44, the
lack of any statement of legislative intent to overrule
this court’s decision in Rhodes, and the fact that P.A.
97-164 had a purpose wholly unrelated to the financing
arrangements of pawnbroking transactions. In so doing,
the majority fails to give proper weight to a long line
of decisions of this court, in which only clear evidence
in the legislative record has been held sufficient to
support a conclusion that the legislature intended to
overrule this court’s interpretative decision. The major-
ity also fails to give proper effect to the most fundamen-
tal principle underlying Rhodes: that repurchase
transactions are pawnbroking loans by another name.
In part I of this dissent, I begin with Rhodes, in which
this court rested its conclusion on broader principles
than acknowledged by the majority. I then detail several
decisions that illustrate our consistent reliance only on
clear evidence of legislative intent to support a conclu-
sion that the legislature intended to overrule one of our
decisions interpreting a statute. Applying that standard,
I evaluate the legislative record, concluding that such
clear evidence of legislative intent is lacking therein.
The issue of whether § 21-44 regulates the rates that
pawnbrokers may charge in repurchase transactions
presents a question of statutory interpretation, over
which we exercise plenary review, guided by well estab-
lished principles regarding legislative intent. See Kasica
v. Columbia, 309 Conn. 85, 93, 70 A.3d 1 (2013)
(explaining plain meaning rule under General Statutes
§ 1-2z and setting forth process for ascertaining legisla-
tive intent). Notwithstanding the passage of § 1-2z, in
our construction of statutes, this court’s starting point,
when we already have interpreted the statute in ques-
tion, is our prior construction of that statute. See id.,
93–94 (in interpreting statutory text, we are bound by
our prior constructions of statute); Hummel v. Marten
Transport, Ltd., 282 Conn. 477, 500–501, 923 A.2d 657(2007) (§ 1-2z did not overrule this court’s prior inter-
pretations of statutes). This approach is consistent both
with the principle of stare decisis and the principle that
our prior decisions interpreting a statute are not treated
as extratextual sources for purposes of construing that
statute and may be consulted as part of our reading of
the statutory text. See, e.g., Kasica v. Columbia, supra,
94 (relying on prior construction of statute during plain
language portion of § 1-2z analysis); In re Elvin G., 310
Conn. 485, 500–501, 78 A.3d 797 (2013) (same).
Therefore, because this court already has construed
General Statutes (Rev. to 1985) § 21-44 in Rhodes v.
Hartford, supra, 201 Conn. 89, to apply to repurchase
transactions, prior to the enactment of P.A. 97-164, the
question of statutory construction in the present case
is a narrow one. That is, I begin with the question of
whether the legislature intended to overrule this court’s
decision in Rhodes when it amended General Statutes
(Rev. to 1997) § 21-44 in P.A. 97-164. Put simply, if the
legislature did not intend to overrule Rhodes by amend-
ing § 21-44 in 1997, then Rhodes controls. I observe
further that in light of the presumption that the legisla-
ture is aware of our decisions construing statutes; Blon-
ski v. Metropolitan District Commission, 309 Conn.
282, 304, 71 A.3d 465 (2013); the majority’s failure to
begin with the question of whether the legislature
intended in P.A. 97-164 to overrule Rhodes subverts the
goal of statutory construction, to discern the intent of
the legislature. Accordingly, I begin by reviewing this
court’s previous interpretation of General Statutes
(Rev. to 1985) § 21-44 in Rhodes.
We defined the issue presented in Rhodes as ‘‘whether
a pawnbroker who engages in a repurchase transaction
is, for purposes of [General Statutes (Rev. to 1985)]
§ 21-44, a pawnbroker who takes or receives, directly
or indirectly, interest in return for the use of money he
loans on the pledge of personal property.’’ Rhodes v.
Hartford, supra, 201 Conn. 94. At the time that we
decided Rhodes, General Statutes (Rev. to 1985) § 21-
44 provided: ‘‘No pawnbroker or loan broker or person
who loans money on the pledge of personal property
shall take or receive, directly or indirectly, for the use
of money loaned on personal property, any more than
the following rates: For the use of money amounting
to fifteen dollars or less, five per cent per month or
fraction thereof; for the use of money exceeding fifteen
dollars in amount and not exceeding fifty dollars in
amount, three per cent per month or fraction thereof;
for the use of money exceeding fifty dollars in amount,
two per cent per month or fraction thereof.’’ (Empha-
sis added.)
Our construction of General Statutes (Rev. to 1985)
§ 21-44 in Rhodes was guided by the remedial purpose
of the pawnbroking statutes, which were enacted ‘‘to
protect impecunious borrowers from extortionate
interest rates and oppressive financing terms that some
pawnbrokers might otherwise impose.’’ Rhodes v. Hart-
ford, supra, 201 Conn. 97. We specifically observed that,
at the time that the predecessors of General Statutes
(Rev. to 1985) §§ 21-44 and 21-454 were enacted,
repurchase transactions ‘‘were recognized as vehicles
used by unscrupulous pawnbrokers to extract usurious
interest rates from their customers.’’ Id.
Consistent with our recognition that one of the reme-
dial purposes of the pawnbroking statutes was to pre-
vent pawnbrokers from relying on repurchase
transactions to legitimize usurious lending practices,
our construction of General Statutes (Rev. to 1985) § 21-
44 in Rhodes was firmly grounded on the principle that
repurchase transactions differ from conventional pawn-
broking loans in name only. Id., 96. Moreover, our state-
ment in Rhodes that the two transactions are equivalent
must be understood in light of our express recognition
that pawnbrokers historically have relied on their ability
to choose among the two labels for pawnbroking trans-
actions, repurchase transactions and pawnbroking
loans, in order to circumvent restrictions on the interest
rates that they may charge. Id. That is, we recognized
in Rhodes that, when possible, pawnbrokers historically
had taken advantage of different legal rules that applied
to the purportedly different pawnbroking transac-
tions—pawnbroking loans and repurchase transac-
tions—and that pawnbrokers had relied on their ability
to evade pawnbroking laws by selecting the more
advantageous label for the transaction, despite the fact
that, in actuality, the two types of transactions are indis-
tinguishable. Id., 96–98; see also S. Levine, A Treatise
on the Law of Pawnbroking (1911), pp. 115–16.
The court in Rhodes turned to the language of General
Statutes (Rev. to 1985) § 21-44, therefore, with three
principles serving as its analytical foundation: the pawn-
broking statutes have the remedial purpose of pro-
tecting impecunious borrowers from usurious interest
rates; pawnbroking loans and repurchase transactions
are distinguishable in name only; and, when possible,
pawnbrokers have capitalized on that very limited dis-
tinction, and relied on any different legal treatment
accorded to the two transactions in order to evade
interest rate restrictions on pawnbroking transactions.
The court then deliberated the significance of the provi-
sion that General Statutes (Rev. to 1985) § 21-44 applied
to rates received by pawnbrokers either ‘‘directly or
indirectly, for the use of money loaned on personal
property . . . .’’ Rhodes v. Hartford, supra, 201 Conn.
94. We observed that, by expressly stating that the
restrictions imposed by General Statutes (Rev. to 1985)
§ 21-44 applied not only to direct, but also to indirect
interest rates, ‘‘the legislature indicated that it intended
the statutes to regulate not only those transactions that
take the classic form of a conventional pawnbroking
loan, but also financing arrangements that, in substance
if not in form, amount to the economic equivalents of
such a loan.’’ Id., 96. We explained: ‘‘The difference
between the repurchase price and the original sales
price of the item amounts to a fee that the customer
must pay for the use of the pawnbroker’s money.
Whether or not the parties to the transaction label it
as interest, this premium constitutes the type of indirect
interest envisaged by the drafters of §§ 21-44 and 21-
45.’’ (Emphasis added.) Id. Thus, this court’s analysis
rested firmly on the principle that the only distinction
between repurchase transactions and pawnbroking
loans was the label that the pawnbrokers applied to
the transaction. Indeed, we cited with approval the trial
court’s apt summary of the situation: ‘‘[O]ne should not
be able to avoid a tax on shoes by calling shoes slippers
. . . .’’ (Internal quotation marks omitted.) Id., 92.
Therefore, because the difference was one in label only,
we viewed repurchase transactions as charging the cli-
ent for the use of money loaned, and we interpreted
the concept of ‘‘indirect interest’’ to encompass the rate
charged in a repurchase transaction, notwithstanding
the fact that the transaction is labeled a ‘‘repurchase
transaction’’ rather than a ‘‘loan,’’ and the rate is desig-
nated as a ‘‘fee’’ imposed on the service rather than
‘‘interest’’ charged on the principal of the loan. We con-
cluded, therefore, that General Statutes (Rev. to 1985)
§ 21-44 regulated the rates charged by pawnbrokers
in repurchase transactions. Id., 103. The majority is
incorrect, therefore, in suggesting that the analysis in
Rhodes rested solely on the inclusion of the word ‘‘indi-
rectly’’ in General Statutes (Rev. to 1985) § 21-44. Cer-
tainly, we relied on the inclusion of that term as part
of our analysis, but the more important, fundamental
principle guiding our analysis was the recognition that
repurchase transactions and pawnbroking loans are dis-
tinct in name only.
Eleven years after this court’s decision in Rhodes v.
Hartford, supra, 201 Conn. 89, the legislature enacted
P.A. 97-164, ‘‘An Act concerning the Regulation of Pawn-
brokers.’’ Section 5 of P.A. 97-164 amended General
Statutes (Rev. to 1997) § 21-44, and, among other
changes, deleted the phrase ‘‘directly or indirectly.’’ The
majority relies on the deletion of the words ‘‘directly
or indirectly’’ from § 21-44 to infer a legislative intent
to overrule Rhodes. I disagree that the omission of that
phrase, viewed in the context of the entire legislative
record, provides clear evidence that the legislature
intended that § 21-44 henceforth apply only to conven-
tional pawnbroker loans.
Although we have not expressly stated what evidence
is sufficient to allow us to conclude that a legislative
amendment was intended to overrule our prior decision
construing a statute, we consistently have required
clear evidence in the legislative record to support such
a conclusion. In most instances, we have relied on
express statements by legislators during floor debate
to conclude that the legislature intended to overrule
one of our decisions interpreting a statute. See, e.g.,
Hummel v. Marten Transport, Ltd., supra, 282 Conn.
503–504 (Borden, J., concurring) (observing that
express statements of legislators in legislative history
of § 1-2z clarified legislative intent to overrule in part
this court’s decision in State v. Courchesne, 262 Conn.
537, 816 A.2d 562 [2003]); In re Michael S., 258 Conn.
621, 628–29, 784 A.2d 317 (2001) (relying on testimony
before Judiciary Committee that No. 86-185 of 1986
Public Acts was intended to address ‘‘a recent
[S]upreme [C]ourt case in 1985 that says you can’t take
an appeal if the [S]uperior [C]ourt . . . moves a child
. . . from the juvenile docket to the regular docket’’ to
conclude that act was intended to overrule In re Juve-
nile Appeal [85–AB], 195 Conn. 303, 488 A.2d 778 [1985]
[internal quotation marks omitted]); Allard v. Liberty
Oil Equipment Co., 253 Conn. 787, 801–802, 756 A.2d
237 (2000) (relying on express statements by legislators
to conclude that legislative history made ‘‘clear’’ that
principal purpose of No. 99-69 of 1999 Public Acts was
to legislatively overrule in part this court’s decision in
Bhinder v. Sun Co., 246 Conn. 223, 717 A.2d 202 [1998]).
Moreover, in the absence of an express statement
of legislative intent, we have interpreted subsequent
legislation, to the extent possible, to be consistent with
our prior decisions, and have specifically declined to
draw inferences that were not directly supported by
the legislative record of legislation enacted in response
to one of our decisions. For example, in Gormbard v.
Zurich Ins. Co., 279 Conn. 808, 820–21 n.8, 904 A.2d
198 (2006), we concluded, on the basis of express state-
ments during the floor debate on No. 83-461 of the 1983
Public Acts, that the legislature intended to overrule
this court’s holding in Harvey v. Travelers Indemnity
Co., 188 Conn. 245, 248, 449 A.2d 157 (1982), in which
this court had interpreted General Statutes § 38-175c
to require as a matter of public policy that ‘‘an insurer
. . . provide uninsured motorist coverage for injuries
that an insured sustains while occupying an uninsured
vehicle that the insured, or a family member of the
insured, owns.’’ Gormbard v. Zurich Ins. Co., supra,820 n.8. We declined, however, to read the legislative
overruling of the Harvey decision more broadly, observ-
ing that ‘‘[t]here is nothing in the language of the 1983
amendment or in the relevant legislative history, how-
ever, to indicate that the legislature disagreed with our
determination in Harvey that, as a general matter, unin-
sured motorist benefits must be portable if they are to
fulfill the broad remedial purpose of the [uninsured
motorist] statute.’’ Id., 821 n.8; see also Kalams v. Giac-
chetto, 268 Conn. 244, 260–61 n.11, 842 A.2d 1100 (2004)
(declining to read legislature’s prompt, subsequent
amendment of General Statutes [Rev. to 1999] §§ 51-
241 and 51-243, which added presumption of unity of
interest for purposes of determining each party’s num-
ber of peremptory challenges, and imposed propor-
tional limits on number of peremptory challenges party
may be allowed; Public Acts 2001, No. 01-152, §§ 1, 2; as
evidence of legislative intent to pass contrary legislation
overruling Marshall v. Hartford Hospital, 65 Conn. App.
738, 783 A.2d 1085, cert. denied, 258 Conn. 938, 786
A.2d 425 [2001], where Appellate Court applied General
Statutes [Rev. to 1999] §§ 51-241 and 51-243 to conclude
that defendants who lacked unity of interest were enti-
tled to four peremptory challenges each). These deci-
sions illustrate that we draw an inference that the
legislature has intended to overrule one of our interpre-
tive decisions only when necessary, and only to the
extent necessary.
It makes sense in light of our role to apply this pre-
sumption—that in the absence of clear and unequivocal
evidence of legislative intent to overrule one of our
prior interpretive decisions, that decision continues to
control the meaning of the relevant statutory provision.
It is our province to say what the law means. Marbury
v. Madison, 5 U.S. (1 Cranch) 137, 177, 2 L. Ed. 60(1803) (‘‘[i]t is emphatically the province and duty of
the judicial department to say what the law is’’). Once
this court has spoken on the meaning of a statute, the
presumption is that if the legislature disagrees with our
interpretation, it will express its intent clearly and
unequivocally.
In the present case, the legislative record does not
provide clear evidence that the legislature intended to
overrule Rhodes when it amended § 21-44 in 1997. I
begin with the two most obvious reasons for my conclu-
sion: the amendment happened eleven years after
Rhodes was decided, and there is no mention whatso-
ever of Rhodes in the legislative record. The eleven
year gap between the release of this court’s decision
in Rhodes and the enactment of P.A. 97-164 is a long
time. As I have noted previously in this dissent, this
court presumes that the legislature is aware of our
interpretation of a statute. Blonski v. Metropolitan Dis-
trict Commission, supra, 309 Conn. 304. Therefore, in
inferring legislative intent on the basis of the legisla-
ture’s response, or lack thereof, to our interpretation
of a statute, we have placed great emphasis on the
passage of time between the release of a decision of
this court and any relevant legislative action or inaction.
For example, we have relied on the prompt, subsequent
passage of contrary legislation as evidence that a legisla-
tive amendment to a statute was passed directly in
response to one of our decisions. See, e.g., Federal
Deposit Ins. Corp. v. Hillcrest Associates, 233 Conn.
153, 167–68 n.7, 659 A.2d 138 (1995) (observing, with
respect to enactment of responsive legislation one year
following decision of this court, that ‘‘[a]lthough there
is no printed legislative history available for [the] statu-
tory amendment, its passage so promptly after the deci-
sion in Dime Savings Bank v. Pomeranz, [123 Conn.
581, 196 A. 634 (1938)], compels the inference that it
was enacted in response to that decision’’). By contrast,
one of the indicators of legislative acquiescence to our
interpretation of a statute is the passage of ‘‘an appro-
priate interval [of time] to permit legislative reconsider-
ation . . . without corrective legislative action . . . .’’
Hummel v. Marten Transport, Ltd., supra, 282 Conn.
494–95. Although we have never identified a particular
length of time that we will consider sufficient to consti-
tute an ‘‘appropriate interval’’ to provide support for an
inference of legislative acquiescence, we have relied
on intervals significantly shorter than eleven years to
support that inference. See, e.g., Commission on
Human Rights & Opportunities v. Sullivan, 285 Conn.
208, 221, 939 A.2d 541 (2008) (eight years); Rivera v.
Commissioner of Correction, 254 Conn. 214, 252, 756
A.2d 1264 (2000) (six years). The passage of eleven
years between Rhodes and the enactment of P.A. 97-
164, accordingly, makes one question whether the legis-
lature was targeting Rhodes when it amended § 21-44
in 1997.
One would expect that, if the legislature did indeed
wait eleven years before overruling Rhodes, it would
have been aware of the need to make its intent even
more clear than in those cases in which it has reacted
quickly to overrule one of our interpretive decisions.
That expectation finds further support in the drastic and
controversial nature of a reversion to the pre-Rhodes
system, which allowed pawnbrokers to select which
laws govern their transactions simply by selecting the
more advantageous label. This is not the kind of change
that would have passed without even so much as a
nod. The legislative record, however, confirms what the
eleven year gap suggests. The legislature did not have
Rhodes in mind at all when it amended General Statutes
(Rev. to 1997) § 21-44 in P.A. 97-164. Neither the sub-
stantive changes to the statute nor the legislative record
provides anything even approaching clear evidence that
the legislature intended to overrule Rhodes.
The substance of the 1997 amendment to § 21-44,
for instance, at best yields equivocal evidence of the
legislature’s intent. The defendants point to the fact
that in 1997, P.A. 97-164 deleted from § 21-44 the key
statutory term on which this court in Rhodes relied
to conclude that the statute extended to repurchase
transactions—the term ‘‘indirectly.’’ In Rhodes, we
interpreted ‘‘indirectly’’ to refer to ‘‘indirect interest,’’
a term that we read to encompass the ‘‘fee’’ charged in
repurchase transactions. Rhodes v. Hartford, supra, 201
Conn. 96. I disagree with the majority that the fact that
the legislature deleted the entire phrase, rather than
deleting only the term ‘‘indirectly,’’ is insignificant. The
deletion of the term ‘‘directly,’’ prevents the change
from constituting clear and unequivocal evidence of
legislative intent to overrule Rhodes and makes it possi-
ble to construe the amendment in a manner consistent
with Rhodes, in which we relied only on the inclusion
of the term ‘‘indirectly’’ in General Statutes (Rev. to
1985) § 21-44 to conclude that the statute governed
repurchase transactions. In order to legislatively over-
rule Rhodes, therefore, the legislature needed only to
delete the term ‘‘indirectly’’ and leave the term
‘‘directly’’ in place. With that amendment, § 21-44 would
have provided that ‘‘[n]o pawnbroker . . . shall take
or receive, directly, for the use of money loaned on
personal property, any more than the following rates
. . . .’’ Such a change would have removed all doubt
regarding the legislature’s alleged intent to exclude
repurchase transactions from the purview of § 21-44.
The omission of both terms, by contrast, arguably leaves
the original meaning of the statutory language intact,
because under the current revision, § 21-44 applies to
rates received, without any limitation as to the manner
in which the rate is received, for the use of money
loaned on personal property.5
The purpose of P.A. 97-164 further undercuts the
majority’s conclusion. The Public Act was focused on
increasing the record keeping requirements on pawn-
brokers to aid law enforcement in the ‘‘control of [the]
flow of stolen goods.’’ Conn. Joint Standing Committee
Hearings, Judiciary, Pt. 4, 1997 Sess., p. 1233, testimony
of John M. Bailey, Chief State’s Attorney. The applicable
rate restrictions governing pawnbroking transactions
were not even remotely part of that agenda. The com-
plete lack of legislative focus on pawnbroking interest
rates is further supported by the absence of any testi-
mony offered to the Judiciary Committee or any
remarks made on the Senate and House floors that
indicated, either expressly or impliedly, that the legisla-
ture intended to make any change in the rate restrictions
governing pawnbroking transactions, and the lack of
any reference whatsoever in the legislative record to
the Rhodes decision. The absence of any remarks
addressing rate restriction changes to § 21-44 reinforces
the conclusion that the legislature’s intent in enacting
P.A. 97-164 in 1997 focused on the sole purpose of the
act, to aid law enforcement in the control of the flow
of stolen goods, and that this court’s holding in Rhodes
was simply not its concern. In summary, the majority’s
position, that the legislature intended to overrule
Rhodes by deleting the word ‘‘indirectly’’ from General
Statutes (Rev. to 1997) § 21-44, would require the
assumption that, eleven years after our decision in
Rhodes, the legislature intended to effect a major
change in the law, despite the lack of any acknowledg-
ment of its intent to do so, in a public act that was not
focused on regulating interest rates. It is unreasonable
to presume that the legislature would effect such a
major change in the law in such a circumspect and
stealthy manner.
The majority relies on changes made by P.A. 97-164
to three of the pawnbroking statutes to argue that the
legislative intent is clear. General Statutes (Rev. to 1997)
§§ 21-41 and 21-42 were amended to incorporate refer-
ences to repurchase transactions; P.A. 97-164, §§ 3, 4;
and General Statutes (Rev. to 1997) § 21-47 was
amended to add a reference to outright purchase trans-
actions; P.A. 97-164, § 7; transactions which the majority
inexplicably characterize as repurchase transactions. I
discount the majority’s mistaken reliance on the 1997
change to § 21-47 as irrelevant and do not address it.6
I disagree that the changes to §§ 21-41 and 21-42 in the
1997 amendment rise to the level of clarity that we
consistently have required to infer legislative intent to
overrule one of our decisions. Significantly, the refer-
ence to repurchase transactions in General Statutes
(Rev. to 2011) § 21-41 (a) was subsequently deleted by
No. 11-100, § 4, of the 2011 Public Acts (P.A. 11-100).
Applying the majority’s reasoning, we should conclude
that the deletion of the reference to repurchase transac-
tions from § 21-41 (a) means that the legislature signi-
fied an intent that § 21-41, which sets forth record
keeping and proof of identity requirements and provides
protection for minors, does not apply so long as a pawn-
broker labels the transaction a repurchase transaction.
The majority also relies on a single relevant change
in P.A. 11-100, which added a reference to repurchase
transactions to General Statutes § 21-45. What the
majority overlooks is that although § 21-45 now men-
tions repurchase transactions, the language of the stat-
ute conflates repurchase transactions and pawnbroking
loans in a manner that supports the conclusion that the
legislature intended to subject the transactions to the
same rules. The full text of § 21-45 provides: ‘‘No pawn-
broker shall sell or dispose of any personal property left
with such pawnbroker in deposit or pledge for money
loaned or as a result of the purchase of such property on
condition of selling the same back again at a stipulated
price in less than sixty days from the date when the
same is left in deposit or pledge or purchased on condi-
tion of selling the same back again at a stipulated
price, except when such sale or disposition is to the
person who deposited, pledged or sold such property
or an authorized agent of such person. All such property
may be sold or disposed of at the place of business of
such pawnbroker or at public sale after such sixty-day
period. Upon the expiration of sixty days from the date
when such property is left with a pawnbroker, if the
person who deposited or pledged such property fails
to redeem any such property in accordance with the
terms of the transaction, such right of redemption or
repurchase on the part of the person who deposited or
pledged such property shall be extinguished and the
pawnbroker shall acquire the entire interest in the prop-
erty that was held by the person who deposited or
pledged such property prior to such deposit or pledge
without further notice to such person.’’ (Emphasis
added.)
The first sentence of § 21-45, which imposes a sixty
day waiting period before a pawnbroker may sell or
dispose of personal property left with the pawnbroker,
specifies two means by which property may be ‘‘left
with such pawnbroker’’: (1) in deposit or pledge for
money loaned; or (2) as a result of the purchase of such
property on condition of selling the same back again
at a stipulated price. In the first sentence of § 21-45,
depositing and pledging personal property are treated
as part of a pawnbroking loan transaction, and purchas-
ing personal property on condition of selling the same
back again at a stipulated price is treated as part of a
repurchase transaction. The final sentence of § 21-45,
however, makes no mention of property that the pawn-
broker has acquired by means of a purchase, and
expressly applies only to property that has been ‘‘depos-
ited or pledged.’’ One would expect, therefore, that the
final sentence of § 21-45 would apply only to pawnbro-
king loans, because items of property that are the sub-
ject of repurchase transactions are not ‘‘deposited or
pledged’’ but are ‘‘purchased on condition of selling
the same back again at a stipulated price.’’ The final
sentence of § 21-45, however, provides that after the
sixty day waiting period, the ‘‘right of redemption or
repurchase’’ is extinguished. (Emphasis added.) This
conflation of the two types of transactions—in the stat-
ute that the court in Rhodes specifically read together
with § 21-44—provides strong support for my reading of
the pawnbroking statutes, namely, that the legislature’s
intent in the pawnbroking statutes, consistent with this
court’s decision in Rhodes, is to treat repurchase trans-
actions and pawnbroking loans as interchangeable.7
If the legislature had intended to overrule Rhodes,
it could have made its intent clear by amending the
pawnbroking statutes to reject the fundamental princi-
ple articulated in Rhodes, that pawnbroking loans and
repurchase transactions should be treated as inter-
changeable.8 That is, the legislature could have defined
‘‘repurchase transactions’’ and ‘‘pawnbroking loans’’ as
separate and distinct transactions. When the legislature
enacted P.A. 11-100, however, which added a new defi-
nitional section, General Statutes § 21-39a, to the pawn-
broking statutory scheme, it did not add definitions for
pawnbroking loans or repurchase transactions. Instead,
P.A. 11-100, § 1, added a definition of pawnbroker as
‘‘a person who is engaged in the business of loaning
money on the deposit or pledge of wearing apparel,
jewelry, ornaments, household goods or other personal
property or purchasing such property on condition of
selling the same back again at a stipulated price . . . .’’
General Statutes § 21-39a (1). The business of pawnbro-
king, therefore, is defined to include both types of
transactions: conventional pawnbroking loans and
repurchase transactions.9
This broad definition supports a commonsense inter-
pretation of the statutory scheme, which is that it gov-
erns pawnbrokers regardless of which label they
append to their transactions. We recognized this in
Rhodes, when we offered this very practical insight into
our statutory construction of General Statutes (Rev. to
1985) § 21-44: ‘‘It would have been unreasonable for the
legislature to have required pawnbrokers who conduct
repurchase transactions to be licensed, without also
requiring their compliance with [the] other pawnbro-
king statutes.’’ Rhodes v. Hartford, supra, 201 Conn.
103. The court in Rhodes abided by a basic tenet of
statutory construction, that we do not abandon com-
mon sense when we undertake the task of interpreting
a statute. ‘‘[W]e will not undertake an examination of
[a statutory provision] with blinders on regarding what
the legislature intended [it] to mean. . . . In interpre-
ting a statute, common sense must be used . . . . The
law favors rational and sensible statutory construction.
. . . The unreasonableness of the result obtained by the
acceptance of one possible alternative interpretation of
an act is a reason for rejecting that interpretation in
favor of another which would provide a result that is
reasonable. . . . When two constructions are possible,
courts will adopt the one which makes the [statute]
effective and workable, and not one which leads to
difficult and possibly bizarre results. . . . We have long
followed the guideline that [t]he intent of the lawmakers
is the soul of the statute, and the search for this intent
we have held to be the guiding star of the court. It must
prevail over the literal sense and the precise letter of
the language of the statute. . . . When one construc-
tion leads to public mischief which another construc-
tion will avoid, the latter is to be favored unless the
terms of the statute absolutely forbid [it].’’ (Internal
quotation marks omitted.) Connelly v. Commissioner
of Correction, 258 Conn. 394, 407, 780 A.2d 903 (2001).
Common sense dictates that the pawnbroking stat-
utes govern pawnbroking transactions; Rhodes dictates
that they do and the legislative record does not provide
clear and unequivocal evidence that the legislature ever
has disagreed with that proposition. I therefore disagree
with part I of the majority opinion.
II
THE USURY STATUTE DOES NOT GOVERN
PAWNBROKERS
In order to conclude that § 37-4, the general usury
statute, applies to pawnbrokers, the majority not only
must ignore the statute’s express statement to the con-
trary, it must also infer that in 1997, when the legislature
amended the pawnbroking statutes in an amendment
that focused on stemming the flow of stolen goods; P.A.
97-164; it simultaneously, without a single stroke of
the pen, or even an oblique reference anywhere in the
legislative record, amended the general usury statute,
which is in a completely different statutory scheme, to
exclude pawnbrokers only when they are engaged in
certain transactions.
The third question certified by the District Court, to
be addressed only if we answered the first two questions
in the negative, requires us to determine whether
repurchase transactions constitute loans subject to the
interest rate limits imposed by § 37-4. ‘‘No person and
no firm or corporation or agent thereof, other than
a pawnbroker as provided in section 21-44, shall, as
guarantor or otherwise, directly or indirectly, loan
money to any person and, directly or indirectly, charge,
demand, accept or make any agreement to receive
therefore interest at a rate greater than twelve per cent
per annum.’’ General Statutes § 37-4. The majority
seizes on the phrase ‘‘as provided in section 21-44’’
in § 37-4 to claim that, when the legislature amended
General Statutes (Rev. to 1997) § 21-44 in P.A. 97-164
to exclude repurchase transactions, it simultaneously
changed the meaning of ‘‘a pawnbroker as provided in
section 21-44’’ to apply only to pawnbrokers engaged
in pawnbroking loans. The ceiling on interest rates is
lower in § 37-4 than the maximum allowable rate in
§ 21-44. When the majority’s analysis of the supposed
evolution of §§ 21-44 and 37-4 is viewed as a whole, it is
claiming that in 1997, the legislature decided to overrule
Rhodes, with the purpose of decreasing the maximum
amount that pawnbrokers may charge in repurchase
transactions, and that it accomplished this purpose by
bringing repurchase transactions within the scope of
§ 37-4. The arbitrariness of this supposed switch cannot
be understated. The majority provides no explanation
as to why the legislature would draw a distinction
between repurchase transactions and pawnbroking
loans, why the legislature would do so without any
evidence in the record that a single person or entity
ever sought such a change, or why the legislature would
accomplish this bizarre change without any acknowl-
edgment of its intent. In addition to all of these more
global problems, the majority’s conclusion is not recon-
cilable with the meaning of the phrase ‘‘a pawnbroker
as provided in section 21-44’’ when it is understood in
the context of the statutory scheme as a whole, and
the evolution of § 37-4 in particular.
The majority’s error is apparent when one consults
the plain language of § 37-4, which does not exclude a
particular class or classes of transactions from its rate
limits, but instead excludes a particular class of per-
sons—pawnbrokers. The majority then compounds that
error by misconstruing the nature of the analytical prob-
lem presented by the statutory language. Instead of
seeking to explain why the phrase ‘‘other than a pawn-
broker as provided in section 21-44’’ in § 37-4 should
be understood to exclude particular transactions rather
than a class of persons, the majority appears to believe
that the question of statutory construction is much eas-
ier—it seems to think that if it can demonstrate that
§ 37-4 is intended to apply to loans that involve the
‘‘indirect’’ charging of interest, then it has demonstrated
that the legislature intended to subject repurchase
transactions to § 37-4. After setting forth the statutory
text of § 37-4, the majority, rather than examining that
text and then reviewing the language of related statutes,
proceeds directly to case law setting forth the well
established principle that usury statutes apply to usuri-
ous loans regardless of the name by which the lender
designates the loan. I am in complete agreement with
that uncontroversial proposition, which could have
been supported simply by referring to the plain language
of § 37-4, which provides that, for the persons and enti-
ties that are subject to it, the rate limit applies to direct
and indirect loans, and to rates that constitute the direct
and indirect charging of interest. The majority then
changes the inquiry, focusing on the meaning of the
phrase ‘‘directly or indirectly,’’ in § 37-4, a phrase that
this court already has interpreted in Rhodes, rather than
the meaning of the phrase ‘‘other than a pawnbroker
as provided in section 21-44.’’ By doing so, the majority
misconstrues the nature of the question of statutory
construction presented in this certified question, and,
as I explain herein, for the second time in this appeal,
fails to give proper effect to one of this court’s prior
interpretations of a statute.
The scope of § 37-4 is defined by the classes of indi-
viduals to which the statute applies, namely, persons,
firms and corporations or agents thereof—and one class
of individuals to which it does not apply, pawnbrokers,
who are governed by § 21-44. In other words, § 37-4 does
not exclude particular transactions from its purview; it
excludes an entire category of lenders from its applica-
tion. That does not mean that there are no particular
transactions excluded from the rate limit in § 37-4. To
identify those transactions, I turn to the extensive list
set forth in General Statutes § 37-9.10 Section 37-9 identi-
fies seven different categories of transactions, most of
which also contain several subcategories, to which § 37-
4 does not apply. Reading the two statutes together
clarifies that § 37-4 identifies the classes of individuals
that are subject to its rate limits, while § 37-9 identifies,
for those classes that are subject to § 37-4, which trans-
actions are nonetheless exempt from the rate limit.
Significantly, a pawnbroking loan is not listed in § 37-
9 as one of the transactions that is excluded from the
limit set forth in § 37-4, reinforcing the conclusion that
pawnbrokers as an entire class are excluded from § 37-
4. The extensiveness of the list of excluded transactions
set forth in § 37-9 is significant in light of the principle
of statutory construction that ‘‘[u]nless there is evi-
dence to the contrary, statutory itemization indicates
that the legislature intended the list to be exclusive.’’
(Internal quotation marks omitted.) Bridgeport Hospi-
tal v. Commission on Human Rights & Opportunities,
232 Conn. 91, 101, 653 A.2d 782 (1995).
The legislative history of the exception in § 37-4 dem-
onstrates that, rather than functioning as a limit on the
class of persons to which the exception applies, namely,
pawnbrokers, the phrase, ‘‘as provided in section 21-
44’’ provides a cross-reference to the applicable rate
limit for pawnbrokers. The cross-reference initially
appeared when the usury statute was originally enacted
in 1907. Public Acts 1907, c. 238. At that time, the pawn-
broking statutory scheme had not yet been delineated
into separate statutes; see Public Acts 1905, c. 235; so
the usury statute cross-referenced the entire chapter
of the Public Act that set forth the laws governing the
business of pawnbroking, excluding pawnbrokers from
the application of the usury statute. As soon as the
pawnbroking statutory scheme was set forth in separate
statutory sections in 1918, however, the cross-reference
to the pawnbroking statutes in the usury statute’s exclu-
sion of pawnbrokers was made more specific, expressly
referencing the statutory provision that set forth the
rate limits governing pawnbrokers. See General Stat-
utes (1918 Rev.) § 4798 (‘‘[n]o person and no firm or
corporation or agent thereof, other than a pawnbroker
as provided in section 3011, shall, as guarantor or other-
wise, directly or indirectly, loan money to any person
and, directly or indirectly, charge, demand, accept or
make any agreement to receive, therefor, interest at a
rate greater than twelve per centum per annum’’); Gen-
eral Statutes (1918 Rev.) § 3011 (‘‘[p]awnbrokers and
loan brokers, and all persons who loan money on the
pledge of personal property, are prohibited from taking
or receiving directly or indirectly, for the use of money
loaned on personal property, any more than the follow-
ing rates’’). The most reasonable interpretation of the
change in cross-reference is that the legislature took
the opportunity to make the cross-reference to the
pawnbroking statutes more precise when the different
pawnbroking provisions were designated by distinct
statutory sections. The most logical choice for a more
precise cross-reference, since the usury statute pro-
vided that the rate limits set forth therein did not apply
to pawnbrokers, was to reference the rate-limiting stat-
ute that did apply to pawnbrokers. That is exactly what
the legislature did in 1918. The same cross-reference is
in the statutory text today, and refers to § 21-44 for the
rate limits governing pawnbrokers.
Our case law confirms that § 37-4 delineates pawn-
brokers as a class of individuals not subject to its rate
limit. Specifically, we already have construed the prede-
cessor to § 37-4 to exclude pawnbrokers as a class from
the rate limits set forth therein. In State v. Hurlburt,
82 Conn. 232, 233, 72 A. 1079 (1909), the defendants
appealed from the judgment of conviction for violating
the predecessor to § 37-4 (then chapter 238 of the 1907
Public Acts)11 on the basis that the statute violated their
right to equal protection under both the state and fed-
eral constitutions, by restricting the interest rates that
some classes of persons could charge, while exempting
other classes of persons from the rate limits. This court
rejected the claim, concluding that there were reason-
able bases for the distinctions drawn by the legislature,
but the court did not reject the premise on which the
claim rested, that the general usury statute excluded
pawnbrokers as an entire class from its effect. Instead,
this court endorsed that interpretation of the statute.
Specifically, as to the exclusion of pawnbrokers as a
class from the interest rate limits of the general usury
statute, this court stated: ‘‘There was . . . reasonable
cause for the exception as to pawnbrokers. Their busi-
ness can only be carried on by those found by public
authority to be suitable persons to engage in it, and its
character is such as to make it not improper to allow
a charge of interest beyond the limit of [15 percent] a
year. Public Acts [1905, c. 235, p. 438].’’ State v. Hurl-
burt, supra, 234. Hurlburt makes clear that the prede-
cessor to § 37-4 distinguishes among classes of individu-
als, and that the exclusion in the predecessor to § 37-
4 applies to pawnbrokers as a class, not to one type
of transaction in which pawnbrokers might enter. The
court in Hurlburt grounded its holding on the principle
that there was a reasonable basis for allowing pawnbro-
kers, as a class, to charge a higher rate than other
lenders—in the present case, the rate that is set forth
in § 21-44. If the legislature disagreed with this court’s
interpretation of the predecessor to § 37-4 in Hurlburt,
it could have amended the usury statute to clarify its
intent, as surmised by the majority, that the exclusion
in the usury statute functions as one with an elastic
scope, expanding and contracting in harmony with § 21-
44. Instead, by remaining silent, the legislature acqui-
esced to our reading of the exclusion as one intended
to identify a class of individuals excepted from the
limits set forth in § 37-4.
My construction of §§ 21-44 and 37-4, which results
in the same interest rate limits applying to both pawn-
broking loans and repurchase transactions, is also con-
sistent with a basic principle of usury law, namely, that
it is the nature of the transaction, rather than the parties’
designation, that controls the governing rules. See 53A
Am. Jur. 2d 796, Moneylenders and Pawnbrokers § 2
(2006); see also Kjar v. Brimley, 27 Utah 2d 411, 416,
497 P.2d 23 (1972) (‘‘casting a loan transaction in the
form of a sale with an option to repurchase will not
insulate the transaction from usury laws’’). The majori-
ty’s statutory construction, by contrast, violates that
basic principle by effectively allowing pawnbrokers to
determine which rules govern their transactions by
selecting the designation that yields the most favorable
rate limits. That is, under the majority’s construction
of §§ 21-44 and 37-4, pawnbrokers who wish to charge
the higher interest rates allowed under § 21-44 may
simply label the transaction a pawnbroking loan.
In summary, I find the majority’s interpretation of
§ 37-4—that the phrase ‘‘other than a pawnbroker as
provided in section 21-44’’ refers only to pawnbroking
loans—unpersuasive. That interpretation must take as
its starting point that the phrase ‘‘as provided in section
21-44’’ was intended to limit the scope of the exception
in § 37-4, rather than function as a practical cross-refer-
ence to the applicable rate limit for pawnbrokers. As I
have explained, that assumption is not supported by
the plain language of the statute, particularly when it is
read together with § 37-9. The majority’s interpretation
further ignores our prior interpretation of the statute,
to which the legislature has acquiesced. State v. Moul-
ton, 310 Conn. 337, 361 n.22, 78 A.3d 55 (2013) (acknowl-
edging that ‘‘under the doctrine of legislative
acquiescence, legislative cognizance of the courts’ prior
interpretation of [a statute is] presumed, and the failure
of the legislature to enact corrective legislation consti-
tute[s] evidence of its agreement with that interpreta-
tion’’). The more reasonable reading of § 37-4 is that
it excludes pawnbrokers as a class of persons, who
continue to be governed by § 21-44, regardless of which
name they append to their transactions, as this court
held in Rhodes.
Accordingly, I dissent.
1
The three questions certified by the District Court are as follows: ‘‘1.
Does [General Statutes] § 21-44 restrict ‘rates of interest’ chargeable by a
pawnbroker, or does it more generally restrict the ‘rates’ chargeable for the
use of money obtained from a pawnbroker in connection with a
repurchase transaction?
‘‘2. Did the Connecticut legislature, in its 1997 amendment to . . . § 21-
44, exempt repurchase transactions and the attendant fees charged from
the limits on rates received by pawnbrokers?
‘‘3. If so, are repurchase transactions, as described by the court in Rhodes
v. [Hartford, 201 Conn. 89, 513 A.2d 124] (1986), considered loans subject
to the interest rate limits imposed by [General Statutes] § 37-4?’’
2
General Statutes § 21-44 provides: ‘‘No pawnbroker or person who loans
money on the deposit or pledge of personal property shall take or receive,
for the use of money loaned on personal property, any more than the
following rates: For the use of money amounting to fifteen dollars or less,
five per cent per month or fraction thereof; for the use of money exceeding
fifteen dollars in amount and not exceeding fifty dollars in amount, three
per cent per month or fraction thereof; for the use of money exceeding fifty
dollars in amount, two per cent per month or fraction thereof.’’
3
General Statutes § 37-4 provides: ‘‘No person and no firm or corporation
or agent thereof, other than a pawnbroker as provided in section 21-44,
shall, as guarantor or otherwise, directly or indirectly, loan money to any
person and, directly or indirectly, charge, demand, accept or make any
agreement to receive therefor interest at a rate greater than twelve per cent
per annum.’’
4
We read General Statutes (Rev. to 1985) § 21-44 together with General
Statutes (Rev. to 1985) § 21-45. General Statutes (Rev. to 1985) § 21-45
provides: ‘‘No such lender shall sell or dispose of any personal property left
with him in pledge for money loaned in less than six months from the day
when the same is left in pledge as aforesaid. All such property shall be sold
or disposed of, at public or private sale, only after advertisement in a daily
newspaper published in the town in which such lender carries on business,
at least once two days before the date of the sale or sales, which advertise-
ment shall state the numbers of the pledge tickets representing the property
offered for sale, and the date or dates when such tickets were issued.’’
5
It is possible that the legislature believed that, in light of the conclusion
in Rhodes that General Statutes (Rev. to 1985) § 21-44 applies to repurchase
transactions, the phrase ‘‘directly or indirectly’’ was no longer necessary. It
is also entirely possible that the legislature viewed the change as a clarifying
technical change. See, e.g., Historic District Commission v. Hall, 282 Conn.
672, 679 n.7, 923 A.2d 726 (2007) (noting legislative history discussing amend-
ment that ‘‘would clarify and make a broad range of substantive and technical
changes in the law governing the formation and operation of historic districts
created by municipalities’’ [internal quotation marks omitted]). The truth is
that the legislative record does not resolve the ambiguity. It is unnecessary,
however, to determine definitively what the legislature did intend, because
the only question presented is whether it is clear that the legislature intended
to overrule Rhodes by amending § 21-44 in 1997. The absence of clear evi-
dence of that intent requires us to construe the change in a manner consistent
with Rhodes. The existence of reasonable alternative readings of the amend-
ment is sufficient.
6
The majority overlooks the fact that the pawnbroking statutes recognize
that pawnbrokers engage in outright sales. That is, in addition to referring
to purchasing property on condition of selling the same back again at a
stipulated price, the pawnbroking statutes also refer to outright purchase
transactions, which of course are the transactions most likely to be con-
nected to the flow of stolen goods.
7
The majority’s explanation for the conflation of the two terms is uncon-
vincing. The opinion surmises that it is the result of a ‘‘drafting error.’’ See
footnote 13 of the majority opinion.
8
The majority inverts the proper presumption that applies when inferring
legislative intent to overrule one of our interpretive decisions. Specifically,
the majority relies on the fact that the legislature has not amended § 21-44
to refer to repurchase transactions as support for its claim that the legislature
has therefore failed to make its intent not to overrule Rhodes clear.
9
The mere fact that the definition of pawnbroker in § 21-39a (1) incorpo-
rates the transaction names used by pawnbrokers does not, as claimed by
the majority, constitute a clear rejection of this court’s recognition in Rhodes
that the transactions are different in name only; Rhodes v. Hartford, supra,
201 Conn. 96; a principle on which the majority relies in its analysis of § 37-
4. Rather, the inclusion of both terms in the definition of the practice of
pawnbroking is consistent with the evolution of the pawnbroking statutes as
making more clear over time that repurchase transactions and pawnbroking
loans are covered equally by the pawnbroking statutes.
10
General Statutes § 37-9 provides: ‘‘The provisions of sections 37-4, 37-
5 and 37-6 shall not affect: (1) Any loan made prior to September 12, 1911;
(2) any loan made by (A) any bank, as defined in section 36a-2, or any out-
of-state bank, as defined in section 36a-2, that maintains in this state a
branch, as defined in section 36a-410, (B) any wholly-owned subsidiary of
such bank or out-of-state bank, except a loan for consumer purposes, or
(C) any Connecticut credit union, as defined in section 36a-2, or federal
credit union, as defined in section 36a-2; (3) any bona fide mortgage of real
property for a sum in excess of five thousand dollars; (4) (A) any loan,
carrying an annual interest rate of not more than the deposit index deter-
mined pursuant to subsection (c) of section 49-2a for the calendar year in
which the loan is made plus seventeen per cent, made to a foreign or
domestic corporation, statutory trust, limited liability company, general,
limited or limited liability partnership or association organized for a profit
or any individual, provided such corporation, trust, company, partnership,
association or individual is engaged primarily in commercial, manufacturing,
industrial or nonconsumer pursuits and provided further that the funds
received by such corporation, trust, company, partnership, association or
individual are utilized in such entity’s business or investment activities and
are not utilized for consumer purposes and provided further that the original
indebtedness to be repaid is in excess of ten thousand dollars but less than
or equal to two hundred fifty thousand dollars, or, in the case of one or
more advances of money of less than ten thousand dollars made pursuant
to a revolving loan agreement or similar agreement or a loan agreement
providing for the making of advances to the borrower from time to time
up to an aggregate maximum amount, the total principal amount of all loans
owing by the borrower to the lender at the time of any such advance is in
excess of ten thousand dollars but less than or equal to two hundred fifty
thousand dollars, or (B) any loan made to a foreign or domestic corporation,
statutory trust, limited liability company, general, limited or limited liability
partnership or association organized for a profit or any individual, provided
such corporation, trust, company, partnership, association or individual is
engaged primarily in commercial, manufacturing, industrial or nonconsumer
pursuits and provided further that the funds received by such corporation,
trust, company, partnership, association or individual are utilized in such
entity’s business or investment activities and are not utilized for consumer
purposes and provided further that the original indebtedness to be repaid
is in excess of two hundred fifty thousand dollars, or, in the case of one or
more advances of money of less than two hundred fifty thousand dollars
made pursuant to a revolving loan agreement or similar agreement or a loan
agreement providing for the making of advances to the borrower from time
to time up to an aggregate maximum amount, the total principal amount of
all loans owing by the borrower to the lender at the time of any such advance
is in excess of two hundred fifty thousand dollars; (5) any obligations,
including bonds, notes or other obligations, issued by (A) the state, (B) any
municipality, including any city, town, borough, district, whether consoli-
dated or not, or other public body corporate, or (C) any authority, instrumen-
tality, public agency or other political subdivision of the state or of a
municipality; (6) any loan made by (A) the state, (B) any municipality,
including any city, town, borough, district, whether consolidated or not, or
other public body corporate, or (C) any authority, instrumentality, public
agency or other political subdivision of the state or of a municipality; (7)
any loan made for the purpose of financing the purchase of a motor vehicle,
a recreational vehicle or a boat, carrying an interest rate of not more than
(A) eighteen per cent per annum on loans made on or after July 1, 1981,
and prior to October 1, 1985, and (B) on loans made on or after October
1, 1985, and prior to October 1, 1993, (i) sixteen per cent per annum for
new motor vehicles, recreational vehicles or boats, and (ii) eighteen per
cent per annum for used motor vehicles, recreational vehicles or boats,
payable in four or more monthly, quarterly or yearly installments which is
unsecured or in which a security interest is taken in such property; (8) any
loan by an institution of higher education made to an individual for the
purpose of enabling attendance at such institution and carrying an interest
rate of not more than the greater of (A) the maximum rate then permitted
by section 37-4, or (B) a rate which is not more than five per cent in excess
of the discount rate, including any surcharge, on ninety-day commercial
paper in effect from time to time at the federal reserve bank in the federal
reserve district where such institution is located; (9) any loan made to a
plan participant or beneficiary from an employee pension benefit plan as
defined in the Employee Retirement Income Security Act of 1974, Public
Law 93-406, as from time to time amended. The provisions of part III of
chapter 668 shall not apply to loans made pursuant to subdivision (7) of
this section. No provision of this section shall prevent any such bank, out-
of-state bank, Connecticut credit union or federal credit union or other
lender from recovering by an action at law the amount of the principal and
the interest stipulated or interest at the legal rate, if interest is not stipulated,
in any negotiable instrument which it has acquired for value and in good
faith without notice of illegality in the consideration. For the purpose of
this section: ‘Interest’ shall not be construed to include attorney’s fees,
including preparation of mortgage deed and note, security agreements, title
search, waivers and closing fees, survey charges or recording fees paid by
the mortgagor or borrower; ‘consumer purposes’ shall mean the utilization
of funds for personal, family or household purchases, acquisitions or uses.’’
11
Chapter 238, § 1, of the 1907 Public Acts provides: ‘‘No person, firm, or
corporation, or any agent thereof, other than a national bank or a bank or
trust company duly incorporated under the laws of this state or a pawnbroker
as provided in chapter 235 of the public acts of 1905, shall directly or
indirectly loan money to any person and directly or indirectly charge,
demand, accept, or make an agreement to receive therefor, interest at a
greater rate than fifteen per centum per annum. The provisions of this
section shall not apply to loans made to any national bank or any bank or
trust company duly incorporated under the laws of this state, or to any
bona fide mortgage of real or personal property.’’