Cesary v. SECOND NAT. BANK OF NORTH MIAMI

Rule of Law:

A statute that creates exceptions to a general usury law by classifying different types of lenders and allowing them to charge different interest rates is a constitutional general law, not a prohibited special law, provided the classification is reasonable and based on real differences inherent to the subject matter.

Facts:

• On March 29, 1972, Ann Cesary borrowed $8,800.44 from The Second National Bank of North Miami.
• The loan was documented by a promissory note that specified an annual interest rate of 11 percent.
• At the time of the loan, Florida's general usury statute limited interest on such loans to a maximum of 10 percent per annum.
• The Second National Bank of North Miami was operating under a federal law that permitted it to charge the maximum interest rate allowed by Florida law for any state-chartered lender.
• Other Florida statutes created exceptions to the general usury law, allowing specific classes of lenders, such as Morris Plan banks and industrial savings banks, to charge interest rates higher than 10 percent.

Procedural Posture:

• Ann Cesary filed a class-action lawsuit against The Second National Bank of North Miami in the United States District Court for the Southern District of Florida, alleging the bank charged a usurious interest rate.
• The Bank moved for summary judgment, arguing the loan was permitted under statutory exceptions to the general usury law.
• The U.S. District Court granted summary judgment in favor of the Bank, finding the challenged Florida statutes constitutional.
• Cesary, as appellant, appealed the decision to the United States Court of Appeals for the Fifth Circuit.
• The U.S. Court of Appeals certified two questions regarding the constitutionality of the Florida statutes to the Supreme Court of Florida for resolution.