2014 WY 56
Wyo.2014Background
- CalCon Mutual Mortgage Corp. (CalCon) was examined by the Wyoming Department of Audit, Division of Banking and found to have charged application fees and yield spread premiums in six brokered transactions that exceeded fees previously disclosed to borrowers.
- In representative transactions, CalCon issued an initial good faith estimate (GFE) without the fee, then provided a revised GFE days before closing that disclosed the higher fee but gave no written explanation for the increase.
- The Division concluded CalCon violated Wyo. Stat. §§ 40-23-114(d) and 40-23-117(a)(iv) and sought reimbursement of the undisclosed or incorrectly disclosed fees under the Commissioner’s authority.
- CalCon requested a contested case hearing before the Office of Administrative Hearings (OAH); the hearing examiner and the Commissioner found CalCon violated the statute and ordered reimbursement.
- The district court affirmed the Commissioner’s order on judicial review; CalCon appealed to the Wyoming Supreme Court, which affirmed.
Issues
| Issue | Plaintiff's Argument (CalCon) | Defendant's Argument (Division/Commissioner) | Held |
|---|---|---|---|
| Whether § 40-23-114(d) requires a written explanation when a revised GFE discloses a higher fee | CalCon: No; once a revised GFE listing the higher fee is provided at least three business days before closing, no separate written explanation is required. | Division: Yes; statute requires a new GFE plus a clear written explanation of the increase and the reason for charging a fee exceeding what was previously disclosed. | Held: The court adopted the Division’s reading — a broker must provide a new GFE and a clear written explanation of the increase and reason for it; the “most recent good faith estimate” means the last GFE previously provided to the borrower. |
| Whether the Commissioner’s decision was arbitrary or capricious because no administrative rule defines “most recent good faith estimate” | CalCon: The agency’s failure to define the term renders enforcement arbitrary. | Division: The statute’s plain language is clear; no rulemaking is required to enforce it. | Held: Not arbitrary or capricious; the statute is clear and enforceable without a promulgated rule. |
Key Cases Cited
- State ex rel. Dep’t of Family Servs. v. Kisling, 305 P.3d 1157 (Wyo. 2013) (standard of review for administrative appeals)
- Chevron U.S.A., Inc. v. Dep’t of Revenue, 154 P.3d 331 (Wyo. 2007) (statutory interpretation principles and use of plain language)
- State ex rel. Wyo. Workers’ Safety & Comp. Div. v. Singer, 248 P.3d 1155 (Wyo. 2011) (read statutes in pari materia and avoid rendering provisions superfluous)
- Thomson v. Wyoming In-Stream Flow Comm., 651 P.2d 778 (Wyo. 1982) (agency may enforce clear statutory direction without rulemaking)
- Diamond B Servs., Inc. v. Rohde, 120 P.3d 1031 (Wyo. 2005) (courts review agency legal conclusions de novo)
- Schuetz v. Banc One Mortg. Corp., 292 F.3d 1004 (9th Cir. 2002) (definition and explanation of yield spread premiums)