Cеrtiorari to review a decision of the Department of Commerce of the State of Minnesota granting to Industrial Credit Plan, Inc., a certificate of authority to transact business as an industrial loan
There seems to be no dispute as to the following facts: The territory within which applicant proposes to operate is composed of the Duluth, Minnesota, area and the immediate suburbs. There is only one other industrial loan and thrift company serving this entire area and population. The approximate population of the area is 120,000 people, with an estimаted 50,000 of these being employed. The business establishments consist of approximately 176 manufacturing concerns; over 586 retail establishments; about 230 wholesalers, jobbers, and distributors; and 50 service establishments.
Other types of lending institutions serving the Duluth population at the time of the hearing on this application consisted of 9 commercial banks, 28 credit associations of various kinds, 2 savings and loan associations, and 11 small loan cоmpanies. The various types of lending institutions each provide a different class of credit accommodation, running from the highest quality commercial bank loans at low rates of interest to loans of the “small loan” variety for which 36 percent interest per annum may be charged.
In addition to the above, the evidence consists largely of the opinion of Stanley A. Nelson, vice president of applicant, based, on an experience of 24 years in operating this type of financial institution in other localities. He stated that in his opinion an industrial loan and thrift company serves a segment of the population who сannot borrow funds on a balance-sheet basis from commercial banks but who are deserving of credit at a much lower cost than 36 percent per annum. He testified that a conservative estimate of thе number of borrowers in this credit class which his company would attract would be about one percent of the population or about 1,200 people. Placing the estimate upon an ultraconservativе basis, he stated that the company would have an ultimate loan portfolio of 600 borrowers. He estimated that, after the first six months, it would have 100 borrowers with a loan portfolio of approximately $75,000. He estimated that, after the first year of operation, they would have about 200 borrowers with $150,000 outstanding and, after the second year, about
Eespondents first contend that the order now under consideration may not be reviewed by certiorari and, further, that relator has no standing to obtain review of it. In view of the decision we arrive at on the merits, we need not now determine the technical questions raised as to the right to review.
The scope of our review in a matter of this kind is limited to a consideration of whether the Department of Commerce has kept within its jurisdiction; whether it has proceeded on an erroneous theory of law; whether its action is so arbitrary and unreasonable that it represents its will and not its judgment; or whether the decision of the department is without evidence to support it.
The requirements for issuance of a certificate to transact business as an industrial loan and thrift company under M. S. A. 53.03 are identical with those required under L. 1919, с. 86, § 3 (M. S. A. 45.07), considered in State ex rel. Dybdal v. State Securities Comm.
Insofar as these requirements are concerned, the challenge here is only to the sufficiency of the evidence to establish a reasonable public demand.
Thus, the issues presented for our consideration narrow down to the single question of whether the evidence sustains the department’s finding that there is a reasonable public demand for this new institution.
As we pointed out in State ex rel. Dybdal v. State Securities Comm.
“It is difficult to give to the words 'reasonable public demand’ a clearer meаning than they carry without definition. They do not necessarily imply a public outcry or agitation for additional banking facilities. They do not necessarily negative the existence of adequate banking accommоdations. They suppose upon the part of the community a desire of a character so substantial as to make the bank welcome and insure an amount of business sufficient to promise it success. The demаnd may come from the natural desire of the community and upon its own initiative, or it may be the result of propaganda. The requirement of paragraph 2 complements those of paragraph 4. Conceivably the commission might find the fact included within paragraph 2 and fail to find those included within paragraph 4, or vice versa, and in either case the application would be denied. Paragraph 2 intends that a bank shall come to a locality because of a desire for it and that it shall not be foisted upon the community when there is no reasonable wish for it there.”
In the field of marketing we think that it must be evident that, in determining whether there is a reasonable public demand for merchandise of a certain type, the potential market would be of paramount importance. In determining whether there was a potential market, such things as population, occupation and income of the citizenry, and existing competing establishments would largely constitute thе evidence upon which the final decision would rest. In the field of law we should not be completely unrealistic. Nor should we establish barriers so difficult to hurdle that it is impossible for the department to comply with the mandate of the statute. Where the evidence as a whole reasonably justifies the inferences the department has drawn in arriving at a decision, we should not interfere. We therefore are of the opinion thаt, in determining whether there is a reasonable public demand for an industrial loan and thrift company so as to justify issuance of a certificate to transact business as such by the Department of Commerce under the provisions of M. S. A. 53.03, the department may take into consideration the potential market, including such evidence as population of the area served, occupation and income of the inhabitants of the area, existing competing establishments, and other evidence of a similar nature. So viewed realistically, the evidence presented was sufficient to justify the inference that from the potential market there is a desire on the part of the people for the services offered by applicant and, therefore, that there is a reasonable public demand. In determining whether the necessary fаcts exist in a case of this kind, the department must be allowed considerable latitude.
Affirmed.
Notes
For a comprehensive discussion of the standing of a party to get review of an administrative order, see Davis, Administrative Law, cc. 16 and 17; Davis, Standing to Challenge Governmental Action, 39 Minn. L. Rev. 353.
State ex rel. Dybdal v. State Securities Comm.
State ex rel. Saari v. State Securities Comm.
See, 9 C. J. S., Banks and Banking, § 7; 36 Wd. & Phr. (Perm. ed.) p. 366.