United States Org. for Bankruptcy Alt. v. Dept. of Banking

Appellee United States Organizations for Bankruptcy Alternatives, Inc. (USOBA) and Appellant Department of Banking challenged different aspects of the Commonwealth Court's decision that the Pennsylvania Debt Management Services Act (Act 117) was unconstitutional in part. At the request of the Supreme Court, the parties addressed whether the lower court's disposition was a final order appealable pursuant to the Rules of Appellate Procedure. The General Assembly adopted Act 117 in October 2008 to regulate, in relevant part, providers of debt settlement services (“DSS”). A DSS provider negotiates with creditors on behalf of a consumer “for the purpose of the creditor forgiving part or all of the principal of the debt incurred or credit extended to that consumer.” Pursuant to Section 3(b) of Act 117, DSS providers are prohibited from operating in Pennsylvania without a license from the Banking Department, and are required to comply with the Department’s regulations. Other sections of Act 117 list licensing fees, describe the initial licensing, license renewal, revocation, and reinstatement processes, and create penalties for violations of the statute. USOBA claimed that Act 117 violates the non-delegation, equal protection, and due process provisions of the Pennsylvania and U.S. Constitutions, and requested a declaratory judgment, injunctive relief, and compensation for attorneys’ fees and costs. The Department denied the allegations, and filed an Application for Summary Relief, claiming that the contentions in the complaint were insufficient as a matter of law to state a claim. Following a hearing, the Commonwealth Court denied the Department’s application in an unpublished opinion. Upon review of the Act, the applicable legal authority and the trial record, the Supreme Court concluded that the Commonwealth Court's order was not appealable and quashed the parties' appeals. View "United States Org. for Bankruptcy Alt. v. Dept. of Banking" on Justia Law