B&S Marketing Enterprises, LLC v. Consumer Protection Division

KRAUSER, Judge. The appellants are B&S Marketing Enterprises, LLC, and S&B Marketing Enterprises, LLC and the two men, who operate and control these two entities, Louis R. Seo, Jr. and Frank A. Brown, Jr. 1 Using the trade names “Kash-2-U leasing” and “Cash-2-U leasing,” B&S and S&B Enterprises provide “quick cash” to Maryland consumers through a contractual contrivance appellants call a “sale-leaseback” but which might more aptly be described, under the circumstances in which it was typically presented and enforced, as a “sale-leaseback-repurchase” agreement. It is the last stage of this transaction—the “repurchase”— which, according to the Consumer Protection Division of the ¹³⁷ Office of the Attorney General (“Division”), transformed what might have passed as a “sale-leaseback” into an unambiguous “loan.” What were dubbed “rental payments” by appellants were deemed “interest payments” by the Division. And those payments were paid, according to the Division, at the exorbitant annual interest rate of 730%.

In due course, the Division brought charges against the appellants, alleging that they had made unlicensed and usurious “loans” in violation of Maryland’s Consumer Loan Law, Md.Code (2000 Repl.VoL, 2003 Supp.), §§ 12-301 to-317 of the Commercial Law Article (“CL”), and had, by misrepresenting these “loans” as “sale-leasebacks”, engaged in “unfair or deceptive trade practices” in violation of the Maryland Consumer Protection Act, CL §§ 13-101 to 501. This matter was then referred to an administrative law judge for a hearing (“ALJ”). At the conclusion of that hearing, the ALJ found that the “sale-leaseback” was not a “loan,” that appellants, individual and corporate, had in any event engaged in unfair and deceptive sales practices in violation of the Consumer Protection Act, and that Seo and Brown were personally liable for those practices. She therefore recommended that all charges pertaining to the Consumer Loan Law be dismissed but that appellants be ordered to cease and desist from violating the Consumer Protection Act and to pay restitution to “consumers for renewal and repurchase transactions, during the period of February 1994 through February 1996.” Her recommendation stopped short, however, of requesting the imposition of civil penalties.

Although it adopted most of the ALJ’s recommendations and all of her factual findings that were based upon her determination of witness credibility, 2 the Division reached a different conclusion as to whether the “sale-leaseback” was a loan and as to whether civil penalties should be imposed. In ¹³⁸ its Final Decision, the Division declared that appellant had “enterfed] into loans in the form of a pretended sale-leaseback ... without complying with the Consumer Loan Law.” The Division’s ensuing Final Order required that appellants make certain disclosures, “cease and desist from violation of the Consumer Protection Act, take affirmative action in the form of restitution, and pay civil monetary penalties.” Challenging the conclusions reached by the Division, appellants filed a petition for judicial review in the Circuit Court for Baltimore City. That was followed by the Division’s issuance of an Amended Final Order. In that order, the Division, as it did in its original order, required appellants to “cease and desist from the violation of the Consumer Protection Act,” “take affirmation action in the form of restitution,” and pay “civil monetary penalties” as well.

Affirming the Division’s decision, the circuit court remanded-“the case to the agency to issue an order that makes explicit that simply changing forms will not make the pretend leaseback valid.” From that order, appellants noted this appeal, presenting the following issues for our review: 3 I. Did the Division apply the correct legal standard to appellant’s sale-leaseback transactions?

II

Did the Division err in finding that the disclosures made by appellants in connection with the sale-leaseback transactions were insufficient?

III

Did the circuit court exceed its authority in remanding the matter to the Division for revision of the Amended Final Order?

IV

Did the Division exceed its authority in ordering “individual awards of restitution without any showing of reliance?” V. Did the Division err in not giving deference to the ALJ’s finding that Seo and Brown acted in good faith and in imposing personal liability on them? . ¹³⁹ For the reasons that follow, we shall affirm the judgment of the circuit court. The Sale-Leaseback Using radio and television advertisements, appellants targeted employed persons between the ages of 25 and 39, “in the $20,000-or-so income bracket,” needing “cash rather quickly,” for their sale-leaseback program. The advertisements declared that anyone needing emergency cash could “get up to $200 today” by calling “752-C-A-S H.” To qualify for the money, the potential customer was informed that he or she must have “an active checking account,” “own electronics or appliances,” and “have been on [his or her] job for one year.” The text of one radio advertisement stated: MONEY PROBLEMS GETTING YOU DOWN? ? ? NO MONEY TO PAY THE ELECTRIC BILL? ? ?—NO PROBLEM NO MONEY TO PAY THE TELEPHONE BILL? ? ?— NO PROBLEM NO MONEY TO COVER THE CHECK YOU JUST WROTE? ? ?—NO PROBLEM THESE AND ANY OTHER EMERGENCIES CAN BE SOLVED WITH A SIMPLE PHONE CALL TO KASH-2U LEASING.

CALL 752-2274, THAT’S 752-C-A-S H AND GET UP TO $200.00 TODAY. WITH KASH-2-U LEASING EMERGENCY MONEY PROBLEMS ARE A THING OF THE PAST. GET MONEY FOR BACK TO SCHOOL ITEMS, FALL SALES AND LATE VACATIONS BY CALLING KASH-2-U LEASING AT 752-2274, THAT’S 752-C-A-S-H. IF YOU HAVE AN ACTIVE CHECKING ACCOUNT, OWN ELECTRONICS OR APPLIANCES AND HAVE BEEN ON YOUR JOB FOR ONE YEAR, KASH-2-U CAN PROBABLY QUALIFY YOU FOR THEIR SALE/LEASEBACK PROGRAM RIGHT OVER THE PHONE. THERE’S NO CREDIT CHECK AND NO RED TAPE AND YOU CAN HAVE THE $200.00 IN YOUR POCKET TODAY—YES, I SAID TODAY.

THAT NUMBER AGAIN FOR FAST, FAST ¹⁴⁰ CASH TODAY. CALL KASH-2-U LEASING AT 752-2274, THAT’S 752-C-A-S-H. CALL CASH FOR CASH. Another radio advertisement declared: IT’S THAT TIME AGAIN! OUT WITH THE OLD YEAR AND IN WITH THE NEW!

AND ALL THE MANAGEMENT AND EMPLOYEES OF CASH-2-U LEASING WOULD LIKE TO TAKE THIS OPPORTUNITY TO SINCERELY THANK ALL OF OUR WASHINGTON CUSTOMERS FOR A GOOD AND REWARDING 1994. AND REMEMBER, MONEY EMERGENCIES NEED NOT RUIN YOUR HOLIDAY CELEBRATION. CALL CASH-2-U LEASING NORTH AT (301)949-2274, THAT’S 949-C-A-S-H OR SOUTH AT (301)702-2274, THAT’S 702-C-A-S-H AND GET UP TO $200.00 TODAY. NO CREDIT CHECK AND NO RED TAPE.

JUST HAVE AN ACTIVE CHECKING ACCOUNT, BE ON YOUR JOB ONE YEAR, ANSWER YES TO A COUPLE OF QUESTIONS AND COME PICK UP $200.00 TODAY. FAST, FAST CASH! THAT’S THE CASH-2-U WAY. LET CASH-2-U GET YOU IN THE PARTY MOOD.

MAKE 1994 A YEAR TO REMEMBER AND START 1995 ON A HAPPY NOTE. CALL CASH-2-U NORTH AT 949-2274, THAT’S 949-C-A-S-H OR SOUTH AT 702-2274, THAT’S 702-C-A-S-H AND LET U.S. HELP YOU HAVE A HAPPY, HAPPY NEW YEAR. Indeed, according to the Division, “[advertising run by [appellants] shortly before the hearing stated that they [were] ‘not a loan company, pawn, or check cashing service’ but still did not offer an explanation as to what the consumer transaction would be.” (Footnote omitted). When a consumer responded to one of these ads by telephoning appellants, he was told that he could obtain up to $200 if he brought with him to one of appellants’ two stores his checkbook, bank statement, photo identification, pay stub, phone bill, and serial numbers for two household items to qualify- for the “sale-leaseback” program.

Upon arrival, the consumer submitted these documents, filled out an application, and “sold” one or two appliances to appellants for $100 each. Appellants then leased the ¹⁴¹ appliances back to the consumer for fifteen day terms at $30 per appliance. Typically, the lease ended when all rent was paid up-to-date and the appliances were repurchased. Appellants paid the same price for each appliance, $100, regardless of the nature, condition, or actual value of the item.

At no time did appellants see, appraise, inspect, or even verify the existence or ownership of an appliance, beyond requesting its serial number from the consumer. Many items purchased by appellants had a market value that was far less than the $100 purchase price. In short, the amount of the purchase price was not related to the fair market value of the specific item being purchased. The sales portion of this two-part transaction was oral until June 1995, when appellants added a “Bill of Sale” form, containing a description of the property, serial numbers, and sometimes model numbers. 4 After the sale of the appliance to appellants, the consumer signed a “Lease Agreement for Personal Property,” requiring the customer to pay appellants as rent the sum of $30 per item at 15 day intervals.

Just as the purchase price was unrelated to the fair market value of the item being purchased by appellants, the amount of the rent was not related to the actual fair market rental value of the item being rented. The lease agreement further provided for the repurchase of the rental property “at the end of the initial lease term or at the end of any renewal for a cash price equal to the fair market value of the rental property,” provided that all other fees were paid. Although the lease granted the consumer the right to terminate the agreement “at any time following the expiration of the initial lease term or any renewal” by returning the property and paying all accrued charges, the green option sheet given to customers at the time they signed ¹⁴² . the lease, which was in larger print than the lease agreement, set forth only three termination options. None of the options stated that the lease agreement could be terminated by surrendering the rental property.

The options sheet was used by appellants from February 1994 through at least March 1996. It presented the options in the following words and format: Options For The Sales-Leaseback Program Options For The Sales-Leaseback Program AT THE END OF YOUR FIRST 15 DAY CYCLE YOU HAVE 3 OPTIONS AVAILABLE TO YOU. THE OPTIONS ARE AS FOLLOWS: OPTION # 1 — CASH OÚT [5] — YOU ARE NOW OUT OF THE PROGRAM. $ 60.00 RENT $200.00 PURCHASE PRICE $ 10.00 TAX $270.00 OPTION # 2 — BUYDOWN—YOU ARE BUYING YOUR ITEMS BACK 1 AT A TIME. $ 60.00 RENT $100.00 PURCHASE PRICE $ 5.00 TAX $165.00 YOU HAVE NOW PURCHASED 1 ITEM OUT OF THE PROGRAM AND NOW HAVE AN ADDITIONAL 15 DAYS TO PURCHASE ITEM 2 BACK. $ 30.00 RENT $100.00 PURCHASE PRICE $ 5.00 TAX $135.00 OPTION # 3 — RENTAL PAYMENT — WHEN USING OPTION # 3 THE RENT DOES NOT APPLY TO THE PURCHASE PRICE. ALL THAT OPTION # 3 DOES IS GRANT YOU AN ADDITIONAL 15 DAYS TIME IN WHICH TO PURCHASE YOUR ITEMS BACK. $ 60.00 RENT As noted, no mention was made in the green options sheet of the right of the customer to terminate the lease by surren ¹⁴³ deling the property.

Nor was that option discussed with potential customers. In fact, employees of appellants were instructed by appellants’ training manual to stress that the customer was obligated to repurchase the rental property to terminate the transaction. 6 In March 1996, however, appellants replaced the green options sheet with a “yellow multi-part options sheet,” adding the missing fourth option. That option read: OPTION #4—RETURN OF MERCHANDISE—WHEN USING OPTION #4 YOU PAY THE $60.00 RENTAL AND RETURN THE RENTAL MERCHANDISE. ONCE YOU HAVE MADE THE RENTAL PAYMENT AND RETURNED THE RENTAL MERCHANDISE YOU HAVE NO FURTHER OBLIGATION TO US.

But “repeat” customers were never told of this revision, and they comprised 80% of appellants’ monthly business. When a customer fell behind on his or her payments, appellants began collection activities by telephoning the customer. During such calls, appellants demanded payment, but, not surrender of the property. Collection calls were followed by a demand letter in which appellants advised the customer: “Failure to contact us will leave us no choice but to use all means necessary to collect this amount.” Like the collection calls, such letters never mentioned that the property could be returned.

If that produced no results, appellants deposited the security deposit check of the delinquent customer, deeming that check to be a “repurchase” of that customer’s property. If a check was dishonored, appellants sent the customer a “Notice of Returned Check.” That notice, among other things, advised the customer that passing a bad check was a crime and specified the criminal penalty for that crime, by setting out at length the relevant criminal statute. It concluded by inform ¹⁴⁴ ing the customer in large capitalized letters: “IF YOU FAIL TO HONOR YOUR CHECK WITHIN 10 DAYS AFTER RECEIVING THIS NOTICE, WE WILL BE FORCED TO CONSIDER APPROPRIATE LEGAL ACTION.” What appellants did not attempt to do, however, was repossess the property. The Division concluded that “[m]any customers found it difficult to come up with the $270 (purchase price for two items plus rent for two items plus tax for two items) needed to pay off their obligation to the [appellants]” and that “[s]uch customers continued paying the ‘rent’ until they could come up with the full ‘repurchase’ price.” Those customers, the Division observed, “often paid rent that was many times the value of the property that they were ‘renting.’ “ The Division cited as examples a customer who paid $1,153 in rent for one item, and others who paid $682, $600, and $503, respectively, in rent for two items. “The annual interest rate on such a loan,” the Division noted, was “730%.” Despite the lease agreement’s property surrender provision, the Division found that “[t]he vast majority of customers— approximately 99.5%—eventually paid back the money which they had received from [appellants].” Indeed, the Division found that appellants “designed their transaction to ensure that consumers ultimately repaid the cash advanced by the [appellants] rather than surrender the property listed in the transactional documents.” When defaulting customers did surrender the property to appellants, appellants “refused to do business with them in the future” and the surrendered items “were treated as being of zero or negligible residual value and abandoned,” the Division stated.

In fact, so inconsequential was this property considered by appellants that they did not list the thousands of items of rental property they purchased in the course of conducting their business on the Maryland personal property return forms they filed with the Department of Assessments and Taxation. From the inception of their business in 1994 through 1996, appellants, the Division found, had entered into sale-leaseback ¹⁴⁵ agreements with more than 11,000 customers. Many of those transactions were personally handled by Brown and Seo. By the date of the administrative hearing, appellants had entered into a total of 56,208 sale-leaseback transactions, but the “leased” property had been surrendered in only 84 instances. 7 Procedural History On August 8, 1996, the Division filed a Statement of Charges and Petition for Hearing with the Chief of the Consumer Protection Division.

That statement named as respondents, B&S Marketing Enterprises, Inc., doing business as Kash-2-U Leasing, and later S&B Marketing Enterprises, Inc., doing business as Cash-2-U Leasing, and its two officers and stockholders, Louis R. Seo, Jr., and Frank A. Brown, Jr. In that statement, Division claimed that appellants, among other things, “provide small loans to consumers in the principal amount of $200, for which they charge an interest rate of 780% per annum,” 8 and that “[i]n order to avoid Maryland’s usury and consumer finance laws, which would require the maker of such loans to be licensed and to charge no more than 33% interest per annum, [appellants] have created a sham ‘sale-leaseback’ transaction.” The statement further averred that consumers “who have cash emergencies are induced to enter into these sham transactions in order to obtain short tern credit at usurious interest rates” and that appellants misrepresented and concealed “the true nature, terms and legality of these transactions.” The Division recommended that appellants be ordered “to cease and desist from violation of the Consumer Protection Act and of the Consumer Loan Law,” to pay restitution “of money received from consumers in connection with a violation ¹⁴⁶ of the Consumer Protection Act,” to “pay $1000 civil penalties per violation,” ánd “to pay for the costs of the investigation and th[e] proceeding.” The Chief of the Consumer Protection Division granted the Division’s petition for a hearing and referred the matter to the Office of Administrative Hearings for a public hearing. Following a public hearing, the presiding ALJ, in a written decision, found that appellants’ transaction was a sale-leaseback transaction, not a loan, but nonetheless concluded that appellants, in presenting the sale-leaseback program, engaged in unfair and deceptive trade practices in violation of the Consumer Protection Act. In reaching that conclusion, the ALJ noted, among other things, that, from February 4, 1994 through March 1996, appellants “used several option sheets which explained three options for repurchasing goods, but did not include an option for returning the goods.” The option sheet, the ALJ explained, though “not a transactional document,” misrepresented “the terms of the lease with respect to how a customer could close the transaction.” The ALJ further found that, based on the very low number of items returned by consumers, “many, if not most, consumers believed that they were obligated to purchase the leased goods.” She pointed out that, from July 1994 through September 1996, appellants “had 56,208 transactions of property, yet only 44 9 items were returned by their customers.” The ALJ recommended that the Consumer Protection Division issue an order requiring that appellants: “cease and desist from violation of the Consumer Protection Act,” pay “restitution of money received from consumers for renewal and repurchase transactions, during the period of February 1994 through February 1996, which violated the Consumer Protection Act,” and “pay for the costs of the investigation and this proceeding.” She did not, however, order appellants “to ¹⁴⁷ pay civil penalties for the above violations.” She further recommended that the “Consumer Protection Division dismiss the charges ... alleging violations of the Consumer Loan Law.” On November 19, 1997, the parties filed exceptions to the ALJ’s decision with the Division. After hearing argument on those exceptions, the Division issued a “Final Decision” on November 2, 2001. 10 In that decision, the Division found that appellants had “engaged in small loan transactions in the form of sale-leaseback and resale transactions” and were not licensed to do so under the Consumer Loan Law.

It further found that the “effective annual rate of interest in a typical transaction-in which the customer paid ‘rent’ equaling 30% of the principal every 15 days-was approximately 730%.” That rate, it stated, exceeded the limits set forth in Consumer Loan Law. It also found that appellants had not provided the consumer disclosures required by that law. With respect to “unfair or deceptive trade practices,” the Division found that appellants had “presented [their] transaction as a sale-leaseback in form, but in practice [had] engaged in loan transactions,” and that they had “led consumers to believe that [appellants] could lawfully enter into a species of loan transactions with a rate of interest far in excess of that permitted by law.” “Even if the transaction were construed as a sale-leaseback,” the Division opined, appellants “misled consumers by omission at critical junctures as to whether the transaction could be terminated other than by repayment of the funds advanced.” With respect to the green option sheet’s omission of the option to surrender the property, the Division concluded that [t]he omission of the option to surrender property in the versions of the options sheet used during most of the period at issue and [appellants] emphasis on “repurchase” options ¹⁴⁸ in that document and in other practices demonstrates their intent to mislead consumers as to the formal terms of the lease form. This was apparently done so that consumers would repay the money received rather than present [appellants] with property that [appellants] would otherwise abandon.

(Citation omitted). The Division further stated that because “Seo and Brown individually participated in the unfair and deceptive practices, they are personally liable for any penalties assessed or restitution which may be ordered.” It assessed a civil penalty “in the amount of $100 per transaction—or a total $591,400.” That penalty was based on 5,914 transactions that occurred during the period from September 1995 to February 1996. On November 2, 2001, the Division issued a “Final Order.” That order required appellants to “cease and desist from violation of the Consumer Protection Act, take affirmative action in the form of restitution, and pay civil monetary penalties, as well as the costs of this proceeding.” It further ordered appellants to “cease and desist from lending money to consumers until” they obtained a “license from the Commissioner of Financial Regulation under the Maryland Consumer Loan Law,” revised their “communications with consumers to explicitly represent the transaction as a loan,” and ceased “charging a higher rate of interest than allowed by the Maryland Consumer Loan Law.” Paragraph '3 of the Final Order stated: 3. Relief Relating to Sale-Leaseback Program.

Alternatively, if Respondents wish to continue their operations as a sale-leaseback program involving consumer property, Respondents shall cease and desist offering a sale-leaseback program unless and until they are in compliance with the following provisions: Those ■ “following provisions” required in part that appellants make “clear and conspicuous” disclosures, as well as provide customers with a disclosure statement, a new options sheet, and a disclosure form of “Comparative Cost of Sale-Lease ¹⁴⁹ back.” The “clear and conspicuous” disclosure requirement provided that appellants “shall truthfully and affirmatively disclose to consumers all material facts about the nature of the sale-leaseback transaction and the consumer’s options and obligations under the transaction.” The disclosure statement that was to be placed in appellants’ advertisements was to read “substantially as follows”: We will pay you $ [insert range of prices offered] to buy _ items of your personal property. You keep that property and pay us rent. You will owe us $ [insert rental amount and term] for the time that you keep that property. You have two options to get out of the sale-leaseback: (1) turn the property over to us and owe us nothing more or (2) buy back the property from us.

And finally, the disclosure statement was required to compare the cost of a sale-leaseback to a loan. It was to read: The Cost of a Sale Leaseback Compared to a Loan In this sale-leaseback, you, will receive $ _ to sell _items of property, and then pay $_rent every 15 days. The cost to you of renting this property for a year is 730% of the money you will receive. By comparison, if you got the same $_as a loan from a bank or finance company or credit card, the interest you would pay is limited by law to no more than 33% per year.

After the Final Order was issued, the Division filed a motion to modify it. In that motion, the Division expressed concern that appellants could “argue that compliance with paragraph 3 constitutes full compliance with applicable law, including the Consumer Loan Law.” The Division suggested that paragraph 3 be revised to read: 3. Relief Relating to Sale Leaseback Program. [Alternatively-] If Respondents wish to continue operations as a sale-leaseback program involving consumer property, in addition ¹⁵⁰ to complying with all laws that may be applicable, including but not limited to the Consumer Loan Law, Respondents shall cease and desist from offering a sale-lease back program unless and until they are in compliance with the following provisions: (Strikeout and underlining in original). The Division further proposed deletion of “730” as the percentage in the disclosure form, which compared the cost of a sale-leaseback to a loan, because the “percentage rate would depend upon the amounts in the first paragraph of the disclosure, which are to be filled in by [appellants] based on the actual amounts charged.” On November 29, 2001, prior to a ruling on the motion, appellants filed a petition for judicial review in the Circuit Court for Baltimore City.

A day later, on November 30, 2001, an “Amended Final Order” was issued, rejecting the Division’s proposed change of paragraph 3 and accepting its proposed change of the disclosure form, by removing “730” as the percentage. Following a hearing on appellants’ petition, the circuit court, in a written opinion, stated that the “transactions are loans and not sales arid leasebacks,” that “the [Division] did not err .in ordering restitution to all those who entered into the unlawful transaction with [appellants],” and that “finding Seo and Brown personally liable [was] not erroneous.” The circuit court also found that the amended final order was “not as clear as it should be” and consequently remanded “the ease to the agency to issue an order that makes explicit that simply changing forms will not make the pretend leasebacks valid.” Later, the circuit court issued an order affirming the final decision of the Division and remanding the case for an order consistent with the court’s written opinion. Standard of Review In reviewing a decision of an administrative agency, our role “is precisely the same as that of the circuit court.” Dep’t Of Health & Mental Hygiene v. Shrieves, 100 Md.App. 283, 303-04 , 641 A.2d 899 (1994). We review only the decision of the administrative agency itself.

Ahalt v. Montgomery ¹⁵¹ County, 113 Md.App. 14, 20 , 686 A.2d 683 (1996). We “do not evaluate the findings of fact and conclusions of law made by the circuit court.” Consumer Prot. Div. v. Luskin’s, Inc., 120 Md.App. 1, 22 , 706 A.2d 102 (1998), rev’d in part on other grounds, 353 Md. 335 , 726 A.2d 702 (1999). “Thus, whether the circuit court applied the wrong standard of review is of no consequence if our own review satisfies us that the [Board’s] decision was proper.” Giant Food, Inc. v. Dep’t of Labor, Licensing & Regulation, 124 Md.App. 357, 363 , 722 A.2d 398 (1999), rev’d on other grounds, 356 Md. 180 , 738 A.2d 856 (1999). To conduct a proper inquiry of an administrative agency’s decision, we “ ‘must be able to discern from the record the facts found, the law applied, and the relationship between the two.’ ” Sweeney v. Montgomery County, 107 Md.App. 187, 197 , 667 A.2d 922 (1995) (quoting Forman v. Motor Vehicle Admin., 332 Md. 201, 221 , 630 A.2d 753 (1993)).

In reviewing the decision of an agency, our role “is limited to determining if there is substantial evidence in the record as a whole to support the agency’s findings and conclusions, and to determine if the administrative decision is premised upon an erroneous conclusion of law.” United Parcel Serv., Inc. v. People’s Counsel, 336 Md. 569, 577 , 650 A.2d 226 (1994). Substantial evidence is “ ‘such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.’ ” Md. State Police v. Warwick Supply & Equip. Co., 330 Md. 474, 494 , 624 A.2d 1238 (1993) (quoting State Admin. Bd. of Election Laws v. Billhimer, 314 Md. 46, 58 , 548 A.2d 819 (1988)).

In making this determination, we must give “ ‘deference ... not only [to the agency’s] fact-findings, but to the drawing of inferences from the facts as well.’ ” Id. (quoting Billhimer, 314 Md. at 59 , 548 A.2d 819 ). We must also accord deference to the agency’s “ ‘application of law to those [factual findings], if reasonably supported by the administrative record, viewed as a whole.’ ” Berkshire Life Ins. Co. v. Md. Ins.

Admin., 142 Md.App. 628, 653 , 791 A.2d 942 (2002) (quoting Ins. Comm’r v. Engleman, 345 Md. 402, 411 , 692 A.2d 474 ¹⁵² (1997)). “ ‘When, however, the agency’s decision is predicated solely on an error of law, no deference is appropriate and the reviewing court may substitute its judgment for that of the agency.’ ” Warwick, 330 Md. at 494 , 624 A.2d 1238 (quoting Billhimer, 314 Md. at 59 , 548 A.2d 819 ). Thus, if the agency’s decision “ ‘is not predicated solely on an error of law, we will not overturn it if a reasoning mind could reasonably have reached the conclusion reached by the agency.’ ” Id. (quoting Billhimer, 314 Md. at 59 , 548 A.2d 819 ).

Discussion I. Appellants contend that the Division applied the wrong law and the wrong legal standard in concluding that their sale-leaseback transactions were really “loans,” not leases. It should have applied, according to appellants, the more “explicit” standards of the Maryland Uniform Commercial Code, Md.Code (1975, 2002 Repl.Vol., 2003 Supp.) §§ 1-101 to 10-112 of the Commercial Law Article (“UCC”), rather than the “pretended purchase” provision of the Consumer Loan Law, which appellants insist “lack[s] any explicit criteria for a ‘pretended purchase.’ ” Had it done so, appellants maintain, the Division would not have considered appellants’ intent or purpose, but only the legal terms of the lease agreements and that would have inexorably led to the conclusion that appellants were offering sale-leasebacks and not loans to consumers. But the issue before us is not which law—the UCC or the Consumer Loan Law—offers the most “explicit standards” for determining what is or is not a loan but rather which law prevails when the two conflict. To answer that question, we need look no further than the provisions of the UCC, which categorically declare that, in such instances, the Consumer Loan Law prevails.

See UCC §§ 2A-104(2), 9—201(c)(1) (providing that in case of a conflict between a consumer protection statute and either Title 2A, dealing with leases or Title 9, dealing with secured transactions, the consumer protection ¹⁵³ statute controls). And that law unquestionably permits the Division to look beneath the formal terms of an agreement and to consider the substance of that agreement in determining whether it constitutes a “loan.” Moreover, unlike appellants, we do not find the Consumer Loan Law is too vague to apply. Maryland’s Consumer Loan Law applies to loans having “an original amount or value which does not exceed $6,000.” CL § 12-303(a). Thus the “loans” made by appellants, which never exceeded $100 per appliance, were covered by this law.

The law further provides that “[a] person may not engage in the business of making loans under this subtitle unless the person is licensed under or is exempt from the licensing requirements of Title 11, Subtitle 2 of the Financial Institutions Article, the Maryland Consumer Loan Law-Licensing Provisions.” Id. § 12-302. There is no dispute that appellants did not have lending licenses. And finally, the law defines “lender” as “a person who makes a loan under this subtitle,” § 12-301(c), and “loan” as “any loan or advance of money or credit made under this subtitle,” § 12-301(e). We turn now to the provision that appellants maintain is too vague for application—the “pretended purchase provision.” That provision, CL § 12-308(3)(c), states: (c) Pretended purchase of 'property or of services considered loan.—This subtitle applies but is not limited to a lender who: (1) As security for a loan, use, or forebearance of money, goods, or things in action or for any loan, use, or sale of credit, whether or not the transaction is or purports to be made under this subtitle, makes a pretended purchase of property from any person and permits the owner or pledgor to retain possession of the property; or (2) By any device or pretense of charging for his services or otherwise, seeks to obtain any interest, charges, discount, or like consideration.

The language of CL 12-303(3)(c) is neither new nor novel. It first appeared in Maryland’s former Uniform Small Loan ¹⁵⁴ Law.1918 Md. Laws, Chap. 88. 11 The preamble to that law is worth re-stating here. It declared that there had “long been conducted in this State an extensive business, in the making of small loans ... to persons in need of funds to meet immediate necessities,” that the “conduct of such business has long been a cause of general complaint, and of much hardship and injustice to borrowers,” and that there was no effective provision “for the protection of such borrowers and for the punishment of usurious lenders.” Nor did the Division err in looking beneath the form of the transaction at issue, into its “true nature,” in determining whether it was a “loan”. See Andrews v. Poe, 30 Md. 485, 487 (1869).

In Andrews , the Court of Appeals explained: It matters not in what part of the transaction it may lurk, or what form it may take—whether it reads six per cent[,] upon its face, with an understanding to pay an extra four per cent., or whether it be a pretended sale and lease, or under whatever guise the lender—always fruitful in expedients—may attempt to evade the law[.] [C]ourts of justice, disregarding the shadow and looking to the substance, will ascertain what in truth was the contract between the parties. Id. at 487-88 . The propriety- of this approach has been repeatedly reaffirmed. See, e.g., Hoffman v. Key Fed. Sav. & ¹⁵⁵ Loan Ass’n, 286 Md. 28, 34 , 416 A.2d 1265 (1979); Brenner v. Plitt, 182 Md. 348, 356-57 , 34 A.2d 853 (1943).

In looking beneath the form of the transaction, to determine whether the sale-leaseback was in substance a disguised loan, the Division considered “all the circumstances of the transaction.” It analyzed appellants’ advertising, their oral and written presentation of the transaction to consumers, their customers’ understanding of the program, their "valuation and treatment of the property” they purportedly purchased, and their collection practices. With respect to appellants’ advertising, the Division found that appellants “targeted consumers who were in need of cash and who wished to avoid a credit check, presumably because they would have difficulty obtaining a loan.” Although those advertisements did not use the word “loan” and, on occasion, referred to a “sale leaseback plan,” they provided, the Division observed, “no details and emphasized that the customer would obtain $200 cash immediately without a credit check.” Indeed, Seo testified that the advertisements targeted those who were employed, between the ages of 25 and 39, and had a “take home” income of $1,000 per month. With respect to appellants’ training materials, the Division found that “[u]p to the time of the hearing[,] the materials used to train [appellants’] employees stressed only the option for a customer to repay the money received by ‘repurchasing’ the items