Commissioner of Financial Regulation v. Brown, Brown & Brown, P.C., et al.
No. 102, September Term 2015



Commercial Law – Maryland Credit Services Business Act – Credit Services Business
– Extension of Credit. The Maryland Credit Services Businesses Act applies to any
person who, among other things, offers to obtain an extension of credit for a consumer in
return for the payment of money. Because an “extension of credit” encompasses a deferral
of debt incurred for household purposes, the statute applies to those who offer, in return
for the payment of money, to negotiate a loan modification for a homeowner facing
foreclosure – unless one of the exemptions in the statute applies. Maryland Code,
Commercial Law Article, §14-1901 et seq.

Commercial Law – Maryland Credit Services Business Act – Attorney Exemption.
An attorney who conducts activities that are otherwise within the definition of a “credit
services business” under the Maryland Credit Services Businesses Act is exempt from the
provisions of that Act if the attorney (1) is a member of the Maryland Bar; (2) carries out
those activities within the scope of the practice of law; and (3) does not engage in a credit
services business “on a regular and continuing basis.” This exemption did not apply to a
Virginia law firm and its managing partner, who was not a licensed Maryland attorney,
when they engaged in a credit services business “on a regular and continuing basis” over a
nine-month period – in particular, consulting with several hundred Maryland homeowners
who faced foreclosure about the possibility of assisting them in renegotiating their
mortgage loans and entering into agreements with 57 of those homeowners under which
the homeowner paid money to the firm in return for the firm’s undertaking to assist in
obtaining a modification of the homeowner’s loan. Maryland Code, Commercial Law
Article, §14-1901(e)(3)(vi).
Circuit Court for Baltimore City
Case No. 24-C-13-002529
Argument: June 2, 2016
                                         IN THE COURT OF APPEALS
                                              OF MARYLAND

                                               Docket No. 102

                                             September Term 2015


                                              COMMISSIONER OF
                                           FINANCIAL REGULATION

                                                      V.

                                     BROWN, BROWN, & BROWN, P.C., ET AL.

                                   _____________________________________

                                             Barbera, C.J.
                                             Greene
                                             Adkins
                                             McDonald
                                             Watts
                                             Hotten
                                             Battaglia, Lynne A.
                                             (Retired, Specially
                                               Assigned),

                                                   JJ.

                                   ______________________________________

                                           Opinion by McDonald, J.

                                   ______________________________________

                                             Filed: August 19, 2016
      Maryland law places various restrictions on those who purport to assist consumers

in obtaining credit – restrictions that include certain licensing, bonding, and disclosure

requirements. These requirements are set forth in the Maryland Credit Services Businesses

Act (“MCSBA”), codified at Maryland Code, Commercial Law Article (“CL”), §14-1901

et seq. Under the rubric “credit services business,” the MCSBA applies to those who offer,

in return for the payment of money, to assist a homeowner in default on a mortgage loan

to fend off foreclosure by obtaining a modification of that loan from the lender. In an

accommodation to other regulatory regimes, the statute exempts from its requirements

certain entities and professions that are regulated by other bodies.        Among those

exemptions is one for Maryland lawyers acting within the scope of their legal practice, so

long as they do not engage in activities that constitute a “credit services business” on a

“regular and continuing basis.”

      In this case, Respondent Brown, Brown & Brown, P.C. (“BB&B”), a small Virginia

law firm, consulted with hundreds of Maryland homeowners facing foreclosure, and

entered into more than 50 agreements with homeowners over a nine-month period in 2008

and 2009. The firm’s managing partner, Respondent Christopher E. Brown, oversaw this

aspect of the firm’s business and signed many of the agreements. Under these agreements,

in return for an advance payment of money by the homeowner, BB&B promised to attempt

to renegotiate the mortgage loan so that the homeowner could avoid foreclosure. BB&B

ultimately did not obtain loan modifications for any of those homeowners.
       After receiving a complaint about BB&B from a family that had entered into such

an agreement, Petitioner Commissioner of Financial Regulation (“Commissioner”), who

has primary responsibility for enforcing the MCSBA, initiated the administrative

proceedings that resulted in this case. Following an evidentiary hearing, an administrative

law judge (“ALJ”) of the Office of Administrative Hearings concluded that Mr. Brown and

his firm had violated the MCSBA in several respects and recommended that the

Commissioner issue a permanent cease and desist order, impose a substantial civil

monetary penalty, and direct BB&B and Mr. Brown to pay treble damages to the Maryland

homeowners with whom they had agreements. The Commissioner accepted the ALJ’s

recommendations and issued an order imposing that relief.

       Respondents sought judicial review. The Circuit Court reversed the agency decision

on the ground that the agreements with the Maryland homeowners were for legal services

rather than credit services and that the MCSBA did not apply to BB&B and Mr. Brown.

The Court of Special Appeals affirmed in an unreported opinion. We granted certiorari.

       We hold that the agency decision accurately construed the MCSBA and was

supported by substantial evidence. There is substantial evidence in the administrative

record that BB&B and Mr. Brown represented that, in return for the payment of money,

they would undertake to obtain a loan modification for the homeowners with whom they

had agreements. Those activities fell within the definition of “credit services business”

under the statute, unless BB&B and Mr. Brown qualified for an exemption.

       There is also substantial evidence in the record to support the conclusion that BB&B

and Mr. Brown did not qualify for the attorney exemption in the MCSBA. While BB&B


                                            2
employed at least one Maryland attorney during the relevant period, Mr. Brown and

another non-Maryland attorney at the firm executed many of the agreements. More

importantly, the evidence revealed that the firm engaged in these activities on a “regular

and continuing basis” during the relevant period of time and therefore did not qualify for

the exemption.

                                              I

                                       Background

A.     Statutory Framework

       Credit Services Business

       The MCSBA defines a “credit services business” as “any person who, with respect

to the extension of credit by others, sells, provides, or performs, or represents that such

person can or will sell, provide, or perform” any of certain enumerated services “in return

for the payment of money or other valuable consideration.” CL §14-1901(e)(1) (emphasis

added).1 The term “person” is defined to include not only individuals, but also various

types of entities, as well as “any other legal or commercial entity.” CL §14-1901(g). The

enumerated services that qualify a person as a “credit services business” are:           “(i)

Improving a consumer's credit record, history, or rating or establishing a new credit file or

record; (ii) Obtaining an extension of credit for a consumer; or (iii) Providing advice or




       1
         A credit services business also “includes a person who sells or attempts to sell
written materials containing information that the person represents will enable a consumer
to establish a new credit file or record.” CL §14-1901(e)(2).


                                             3
assistance to a consumer with regard to either [of the first two services].” CL §14-

1901(e)(1) (emphasis added). An “extension of credit” is defined as “the right to defer

payment of debt, or to incur debt and defer its payment, offered or granted primarily for

personal, family, or household purposes.” CL §14-1901(f).

       Thus, an individual or entity that, in return for the payment of money, offers to assist

a consumer in obtaining an extension of credit – such as the deferral of a debt that was

incurred for household purposes – falls within the general definition of “credit services

business.”

       Attorney Exemption

       Notwithstanding the breadth of the general definition of “credit services business”

in the statute, there are 10 categories of individuals and entities excluded from that

definition. CL §14-1901(e)(3). Each of those categories relates to individuals or entities

whose activities are regulated by other authorities. Pertinent to this case, one such category

encompasses “[a]n individual admitted to the Bar of the Court of Appeals of Maryland

when the individual renders services within the course and scope of practice by the

individual as a lawyer and does not engage in the credit services business on a regular and

continuing basis.” CL §14-1901(e)(3)(vi). We will refer to this provision as the “attorney

exemption.”2 A person who claims the benefit of an exemption, such as the attorney

exemption, has the burden of establishing entitlement to the exemption. CL §14-1907(d).



       2
        Other exemptions relate to banks, other lenders authorized by State or federal law,
nonprofit organizations, licensed real estate brokers, licensed mortgage lenders, securities
broker-dealers, consumer reporting agencies, and certified public accountants, among

                                              4
      Regulation of Credit Services Businesses

      The MCSBA applies to any contract with a Maryland resident involving credit

services. CL §14-1903(a). It regulates the activities of a credit services business in a

number of ways. Among other things, a credit services business may not “[c]harge or

receive any money or other valuable consideration prior to full and complete performance

of the services that [it] has agreed to perform for or on behalf of the consumer,” must be

licensed by the Commissioner, must provide the consumer with certain specified

information before “either the execution of a contract or agreement between a consumer

and a credit services business or the receipt by the credit services business of any money

or other valuable consideration,” must use contracts meeting certain requirements, and

must obtain a surety bond. CL §§14-1902(6), 14-1903, 14-1904, 14-1906, and 14-1908.

A contract for credit services that fails to comply with the MCSBA is void and

unenforceable. CL §14-1907(b).

      The provisions of the MCSBA are primarily enforced by the Commissioner of

Financial Regulation, who may issue cease and desist orders and initiate administrative

enforcement proceedings. CL §§14-1911 through 14-1913.3 One who negligently fails to




others. CL §14-1901(e)(3). As with the attorney exemption, the exemption for CPAs is
lost if the individual engages in a credit services business “on a regular and continuing
basis.”
      3
        Violations of the MCSBA also may be enforced by the Consumer Protection
Division of the Office of the Attorney General as violations of the Consumer Protection
Act. CL §14-1914.


                                            5
comply with the statute is liable for any actual damages sustained by consumers, as well

as attorney’s fees and the costs of the proceeding. CL §14-1912(b). One who “willfully”

violates the MCSBA is liable for any actual damages suffered by the consumer, a monetary

award of treble damages of the total amount collected from the consumer, as ordered by

the Commissioner, and any punitive damages that a court awards, as well as costs and

attorney’s fees. CL §14-1912(a). The Commissioner also has authority, under the general

enforcement authority of that office, to impose a civil monetary penalty of up to $1,000 for

a first violation and up to $5,000 for each subsequent violation. Maryland Code, Financial

Institutions Article (“FI”), §2-115(b)(3).

B.     Facts

       The Firm

       The following facts were found by the ALJ who conducted the hearing and were

accepted by the Commissioner, or are undisputed. During the relevant period, BB&B was

a law firm located in Alexandria, Virginia, that employed no more than four attorneys at

any one time.4 Mr. Brown, an attorney licensed to practice law in Virginia and the District

of Columbia, served as the managing partner of BB&B and was its sole shareholder. Mr.

Brown was not licensed to practice law in Maryland.

       During the time period relevant to this case, BB&B employed a Maryland lawyer

to meet with Maryland clients and work on their matters.             Specifically, Bradley

Deutchman, a lawyer licensed in Maryland, worked for BB&B during 2008, but left in



       4
           We are advised, in Respondents’ Brief, that BB&B no longer exists.

                                             6
January 2009. After Mr. Deutchman left the firm, it employed Adam Polsky, who was also

licensed in Maryland, for three or four months at the beginning of 2009. If a Maryland

lawyer was not available to meet with a Maryland client of BB&B, Mr. Brown or Michael

Miller, a lawyer licensed in the District of Columbia, would meet with the Maryland client

instead.

       Referrals of Homeowners Facing Foreclosure

       During late 2008 and early 2009, Mortgage Analysis & Consulting LLC, a Virginia–

based business that advertised in Spanish-language media and that accepted fees from

homeowners to analyze their mortgage status, referred hundreds of Maryland homeowners

to BB&B.5 The ALJ found that Mortgage Analysis & Consulting was responsible for 90

per cent of the homeowners who consulted with the firm during that period. 6 Mr.

Deutchman estimated that the firm actually entered into agreements with less than a quarter

of those homeowners. Mr. Deutchman testified that, by the time he left the firm in early

2009, he spent the majority of his time dealing with the homeowners facing foreclosure.

Between June 2008 and March 2009, at least 57 Maryland homeowners, most of whom

were referred by Mortgage Analysis & Consulting, paid BB&B to help them with their

mortgage debts. Most of the Maryland homeowners who entered into these agreements




       5
       According to one of its principals, who testified at the administrative hearing,
Mortgage Analysis & Consulting went out of business in November 2009.
       6
        In their brief, BB&B and Mr. Brown indicate that the firm met with what they term
a “low estimate” of at least 400 Maryland homeowners referred by Mortgage Analysis &
Consulting.

                                            7
with BB&B were native Spanish-speakers and spoke little or no English. Most, if not all,

of the homeowners were seeking a modification of their mortgage loans.

      Agreements with Homeowners

      The agreements between BB&B and Maryland homeowners were entitled either

“Retainer Agreement” or “Fee Agreement.” Although the agreements varied in their

precise content and some contained parallel provisions in Spanish as well as English,

certain provisions were common to the vast majority of the agreements. Under the

agreements, homeowners paid BB&B amounts varying from $2,500 to $7,500 up front

before receiving any services. The amount paid, according to the agreement, was deemed

“earned upon receipt.” An introductory paragraph of the agreement, which appears in

several different iterations in the agreements, stated that BB&B would represent the

homeowners in negotiations with the homeowner’s lender, foreclosure defense, and

possible litigation concerning the homeowner’s property. The nature of the work, in

relation to the amount paid, was elaborated in a paragraph entitled “BB&B’s Obligations.”

That paragraph specified that, in consideration for the money paid by the homeowner, the

firm would “engage the appropriate party in discussions to renegotiate the terms of your

loan.” If the renegotiation of the homeowner’s mortgage loan proved unsuccessful, BB&B

was to “assess the chances of success in state or federal court and the costs involved” to

decide whether to do something more. In the event of such further action, the agreements

provided that BB&B would receive an additional fee (usually stated as a 40% contingency

fee, or any attorney’s fee awarded by a court, whichever was greater).




                                            8
       Only four of the agreements with Maryland homeowners were signed by the firm’s

Maryland lawyer on behalf of BB&B. Thirteen were signed by other BB&B lawyers,

including Mr. Brown, on behalf of BB&B, while most of the agreements had no signature

of any attorney on behalf of BB&B.

       BB&B apparently made little effort to actually renegotiate loans and did not obtain

a loan modification for any of the Maryland homeowners with whom it had agreements.

There was some evidence that it made other efforts that it referred to as “foreclosure

defense.” In particular, it would sometimes send what Mr. Deutchman referred to as “form

letters” to lenders requesting documentation under certain federal statutes in the hope that

the lender would fail to make a timely response and that BB&B might use that failure as

leverage in future negotiations.7

       The Experience of Mr. and Mrs. Batres

       Testimony at the administrative hearing focused on the example of Miguel and

Teresa Batres, who filed the complaint with the Commissioner that initiated this case. Ms.

Batres, whose native language is Spanish and who does not read English, responded to a

Spanish-language radio advertisement for Mortgage Analysis & Consulting. After paying

$150 to that entity, she was referred to BB&B to help her obtain a loan modification. On




       7
         The letters were known as QWRs (“qualified written request”), which were sent
to lenders and loan servicers pursuant to the Real Estate Settlement Procedures Act
(RESPA), 12 U.S.C. §2601 et seq., and Requests for Validation of Debt, which were sent
to debt collectors pursuant to the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C.
§1692 et seq.

                                             9
July 23, 2008, she and her husband signed an agreement with BB&B and paid $1,500 of

the $3,000 specified in the agreement.

       Approximately six months later, after receiving a notice initiating a foreclosure

action as to their home, and a form notice of the Commissioner advising homeowners in

foreclosure of potential remedies, the Batreses contacted the Commissioner’s Office to

lodge a complaint against BB&B. The Batreses alleged that BB&B had done nothing on

their behalf and asked for their money back. The Batreses eventually lost their home to

foreclosure.8

       Non-Compliance with the MCSBA

       Neither BB&B nor Mr. Brown nor any of the firm’s other attorneys has ever been

licensed under the MCSBA. Nor did they apparently comply with the other requirements

of the Act, such as the bonding and disclosure requirements. None of the agreements

contained any advisements relevant to credit services.

C.     Procedural History

       Administrative Investigation and Charges

       As a result of the Batres complaint, the Commissioner investigated BB&B. On the

basis of that investigation, the Commissioner issued a Summary Order to Cease and Desist

on March 6, 2009 to BB&B, Mr. Brown, Mr. Deutchman, and Mr. Miller that alleged




       8
         The parties blame one another for this result: the Commissioner asserts that BB&B
did nothing to assist the Batreses during the six months between the agreement and the
filing of the Batreses’ complaint; BB&B asserts that its compliance with the subsequent
cease and desist order prevented it from doing anything on the Batreses’ behalf.

                                           10
various violations of the MCSBA. In response, BB&B terminated its agreements with

Maryland homeowners. In April 2009, Mr. Deutchman settled with the Commissioner,

admitting the essentials of the alleged violations. BB&B and Mr. Brown requested a

contested case hearing.9     The Commissioner referred the matter to the Office of

Administrative Hearings for a hearing and proposed decision.

      Administrative Hearing and Decision

      On September 28 and November 4, 2010, an ALJ of the Office of Administrative

Hearings held an evidentiary hearing. After receiving post-hearing briefs, the ALJ issued

a Proposed Decision on March 8, 2011, concluding that BB&B and Mr. Brown had violated

the MCSBA. The ALJ recommended that the Commissioner issue a final cease and desist

order and assess a civil monetary penalty in the amount of $114,000 under FI §2-115(b)(3).

In addition, the ALJ found that the violations were “willful” and, accordingly,

recommended that the Commissioner order that BB&B and Mr. Brown pay to the

homeowners treble damages pursuant to CL §14-1912(a)(2).

      The matter was delegated to the Deputy Commissioner of Financial Regulation as

final agency decisionmaker under the State Administrative Procedure Act. See FI §2-103;

Maryland Code, State Government Article, §§10-216, 10-221. On May 5, 2011, the

Deputy Commissioner issued a Proposed Order adopting the ALJ’s findings of fact,

conclusions of law, and recommended order with minor amendments. Two weeks later,




      9
          The Commissioner apparently was never able to serve Mr. Miller with the order.

                                            11
BB&B and Mr. Brown advised the Commissioner that they excepted to the proposed

disposition of the case and asked for an exceptions hearing.

       There followed an interregnum during which the parties entered into a settlement

agreement and consent order. BB&B and Mr. Brown were apparently unable or unwilling

to carry out some of the monetary requirements of the consent order and the administrative

proceeding was revived.10 The Deputy Commissioner held a hearing on the exceptions of

BB&B and Mr. Brown on October 4 and October 23, 2012.

       On March 26, 2013, the Deputy Commissioner issued an Opinion and Final Order

concluding that BB&B and Mr. Brown had violated the MCSBA. The Opinion and Final

Order also declared that the agreements with Maryland homeowners were void and

unenforceable, ordered BB&B and Mr. Brown to cease and desist from engaging in any

credit services business activities with Maryland residents, held BB&B and Mr. Brown

jointly and severally liable for a civil monetary penalty of $114,000,11 and directed them




       10
          In its brief in this appeal, BB&B and Mr. Brown ask us to order the Commissioner
to refund payments they made under that settlement. That issue was not raised in the
petition for certiorari, and no cross-petition was filed concerning that issue. Given our
disposition of this case, the Circuit Court may consider on remand how any such payments
should be credited in the order it ultimately enters.
       11
          The ALJ recommended that the Commissioner assess a $1,000 penalty for each
of the 57 agreements BB&B entered into with Maryland homeowners without being
licensed as required under CL §§14-1903, 14-1902(a)(1), and an additional $1,000 penalty
as to each of those agreements for requiring an up-front fee in violation of CL §14-1902(6).
The Deputy Commissioner accepted that recommendation.


                                            12
to pay 57 Maryland consumers a total of $720,600 as treble damages.12

       Judicial Review

       BB&B and Mr. Brown sought judicial review of the agency decision in the Circuit

Court for Baltimore City. In the memorandum in support of their petition, BB&B and Mr.

Brown contended: (1) for a variety of reasons, the MCSBA did not apply to them; and (2)

even if it did, any violations they committed were not willful.          After hearing legal

arguments of the Commissioner and of BB&B and Mr. Brown on June 18 and July 29,

2014, the Circuit Court issued an order and memorandum opinion reversing the

Commissioner’s decision. The Circuit Court concluded that, while BB&B and Mr. Brown

may have violated the ethical rules governing attorneys, any loan modification they

obtained would have been “ancillary” to their provision of legal services and their activities

did not constitute a credit services business as defined in the MCSBA. The Circuit Court

did not address the issue of willfulness.



       12
         Although not elaborated in the fact findings of the ALJ, she apparently concluded
that BB&B had collected $252,200 from Maryland homeowners. After reviewing the
ALJ’s Proposed Decision, the Deputy Commissioner concluded that there was insufficient
factual evidence for amounts allegedly paid by some homeowners and reduced that figure
to $242,200. Trebling that figure should result in treble damages of $726,600 rather than
the figure of $720,600 in the Final Order. Thus, there may be an arithmetic error in the
computation. In any event, although a chart derived from BB&B’s records that purported
to document homeowner payments was introduced at the administrative hearing, neither
the ALJ nor the Commissioner detailed how they arrived at their particular figures.

        In their brief, BB&B and Mr. Brown also suggest that the treble damage figure in
the Commissioner’s order is based on an inaccurate computation of the total amount paid
to the firm by Maryland homeowners. However, they do not identify what they believe is
the correct figure.


                                             13
       The Commissioner appealed, and, on October 23, 2015, the Court of Special

Appeals affirmed the Circuit Court in an unreported opinion. We subsequently granted the

Commissioner’s petition for a writ of certiorari.

                                            II

                                       Discussion

       It is undisputed that neither BB&B nor Mr. Brown obtained a license to operate a

credit services business or otherwise complied with the various requirements in the

MCSBA.      The issue is whether they should have.        To resolve that issue requires

consideration of the following questions.

       First, did the business activities of BB&B and Mr. Brown with respect to the

Maryland homeowners with whom they entered into agreements during late 2008 and early

2009 come within the definition of a “credit services business” under Maryland law?

       Second, if the answer to the first question is “yes,” did BB&B or Mr. Brown qualify

for the attorney exemption in the MCSBA?

       In adopting, with minor changes, the ALJ’s Proposed Decision, the Commissioner

answered “yes” to the first question and “no” to the second. It is now our task to review

those determinations.

A.     Standard of Review

       When we review the final decision of an administrative agency, such as the decision

made by the Commissioner in this case, we “look through” the circuit court’s and

intermediate appellate court’s decisions, and evaluate the decision of the agency directly.

CashCall, Inc. v. Commissioner of Financial Regulation, ___ Md. ___, ___, ___ A.3d ___


                                            14
(2015). We look for whether there is substantial evidence in the record as a whole to

support the agency’s decision, and whether the agency’s decision applies a correct

interpretation of the law. Bd. of Directors of Cameron Grove Condo., II v. State Comm'n

on Human Relations, 431 Md. 61, 80, 63 A.3d 1064 (2013). In the latter assessment, “the

interpretation of a statute by the agency charged with administering the statute is entitled

to great weight.” Adventist Health Care Inc. v. Maryland Health Care Comm’n, 392 Md.

103, 119, 896 A.2d 320 (2006).

B.     Whether the Activities Came Within the Definition of “Credit Services Business”

       1.      Statutory Text

       Any effort at statutory interpretation begins with the text of the statute. Lockshin v.

Semsker, 412 Md. 257, 275, 987 A.2d 18 (2010). The MCSBA applies to a “credit services

business,” which the statute defines to include a “person who, with respect to the extension

of credit by others . . . sells . . . or represents that such person can or will sell, provide, or

perform . . . in return for the payment of money or other valuable consideration” the service

of “[o]btaining an extension of credit for a consumer,” where an “extension of credit”

includes “the right to defer payment of debt . . . offered or granted primarily for personal,

family, or household purposes.” CL §14-1901(e)(1), (f).

       This is precisely what BB&B and Mr. Brown did. Each of the agreements obligated

the homeowner to pay several thousand dollars to BB&B. The agreements specified that,

in consideration for that payment, BB&B was “to engage the appropriate party in

discussions to renegotiate the terms of your [mortgage] loan.” Renegotiating the key terms

of a mortgage loan in distress means seeking to modify such terms as the principal, the


                                               15
interest rate, and the length of the loan term. It may involve forgiveness of past due

mortgage payments, moving missed payments to the end of the loan, recapitalization of the

loan, or any number of other mechanisms that defer all or part of the debt in some manner.

Modification of a mortgage loan in default inevitably results in some form of deferral.

Thus, renegotiating the terms of a mortgage loan in distress is “obtaining an extension of

credit” as defined in MCSBA because it would involve some form of deferral of the

original payment terms.

      Finally, a home mortgage loan is debt primarily for personal, family, or household

(as opposed to, for example, commercial or business) purposes. Accordingly, renegotiating

the terms of a mortgage loan involves seeking “the right to defer payment of debt . . .

offered or granted primarily for personal, family, or household purposes,” which is an

extension of credit according to CL §14-1901(f). As the firm and its attorneys, including

Mr. Brown, undertook to obtain such an extension of credit in exchange for the payment

of money, they met the general definition of a “credit services business” in CL §14-

1901(e)(1).13




      13
          BB&B and Mr. Brown have, at times, contended that their agreements were
inaccurately phrased, because the lawyers at BB&B did not intend to do some of the things
that the agreements said that they would do. Whether an agreement was poorly phrased is
not relevant to this case, though. The statutory language includes those who “represent”
that they will engage in the actions described in the statute, and the agreements certainly
“represented” that BB&B would do what the agreements said, whether or not BB&B
actually did or intended to do any of those things.


                                            16
       2.     Legislative History

       Although the text of the statute encompasses the agreements between BB&B and

Maryland homeowners, it is appropriate to examine the legislative history of the statute for

at least two reasons. First, we may consult legislative history to confirm our understanding

of apparently unambiguous text. Hammonds v. State, 436 Md. 22, 44, 80 A.3d 698 (2013).

Second, in this case, BB&B and Mr. Brown argue that the General Assembly actually

intended that the MCSBA cover only credit repair agencies, and therefore it should not

cover them. Although this argument has no basis in the language of the statute, we shall

also consider it in our examination of the legislative history.

       MCSBA (1987 – 2010)

       The General Assembly, inspired by model legislation suggested by the Council of

State Governments in 1986 (which in turn was inspired by California’s Credit Services Act

of 198414), enacted the MCSBA in 1987. Chapter 469, Laws of Maryland 1987; see

Council of State Governments, Suggested State Legislation (vol. 45) (1986); California

Civil Code §1789.10 et seq. This Court previously reviewed the legislative history of the

enactment of the MCSBA and the subsequent amendment of the statute in 2001, 2002, and

2010 in Gomez v. Jackson Hewitt, Inc., 427 Md. 128, 164-69, 46 A.3d 443 (2012). After

reviewing that history, the Court concluded that, while the original enactment was




       14
        California has never considered the issue in this case because its attorney
exemption is broader. See California Civil Code §1789.12(b)(5).

                                             17
primarily aimed to regulate credit repair agencies, the subsequent amendments extended

the reach of the MCSBA to payday lenders and others. 427 Md. at 161-62, 169.

       In particular, the post-1987 amendments prohibited a credit services business from

“[c]harg[ing] or receiv[ing] any money or other valuable consideration in connection with

an extension of credit that, when combined with any interest charged on the extension of

credit, would exceed the interest rate permitted for the extension of credit under the

applicable title of this article.”15 CL §14-1902(7). As this Court concluded in Gomez,

because many of the amendments seemed directed at payday lenders, the MCSBA’s

legislative history suggests that the MCSBA is not limited to “ordinary credit repair

services.” Gomez, 427 Md. at 169. Rather, it is intended to provide broad protection to

consumers of credit services. A report of the Senate Finance Committee concerning the

2002 amendment of the statute explained that the amendment was intended to close a

perceived loophole and apply the statute to “any extension of credit.” Floor Report of

Senate Finance Committee concerning House Bill 1193 (2002) (emphasis in original). The

MCSBA, as amended over the past two decades, is not intended to regulate only credit

repair agencies or payday lenders; its reach is broader.




       15
          This prohibition took place in stages. In 2001, the Legislature added a prohibition
against “assist[ing] a consumer to obtain an extension of unsecured closed end credit at a
rate of interest which, except for federal preemption of State law, would be prohibited
under” Maryland law. Chapter 630, Laws of Maryland 2001. In 2002, all other extensions
of credit were included. Chapter 561, Laws of Maryland 2002. In 2010, the General
Assembly clarified that fees associated with a payday loan also fell under the usury caps,
putting the statute in its present form. Chapter 385, Laws of Maryland 2010.

                                             18
       MARS Act (2013)

       The legislative history of the MCSBA after the time period relevant to this case

provides another important clue. In 2013, the General Assembly enacted the Maryland

Mortgage Assistance Relief Services (“MARS”) Act. Chapter 465, Laws of Maryland

2013, codified at Maryland Code, Real Property Article, §7-501 et seq. That legislation

regulated “mortgage assistance relief providers,” incorporating various definitions from

federal law. Under the incorporated federal definitions, “mortgage assistance relief”

includes the renegotiation or modification of a mortgage loan. See 12 CFR §1015.2. As

part of the same bill, the General Assembly added a corresponding exemption to the

MCSBA, codified at CL §14-1901(e)(3)(x) (“Beginning July 1, 2013, a mortgage

assistance relief service provider regulated under [the MARS Act]” is exempt from the

definition of “credit services business.”).

       The addition of this new exemption to the MCSBA to exclude those regulated by

the MARS Act indicates that the General Assembly believed that those who offer to obtain

loan modifications for homeowners would otherwise be covered by the MCSBA. If that

were not true, the new exemption in CL §14-1901(e)(3)(x) would be unnecessary.16




       16
         The MARS Act also contained a savings provision that indicated that the bill was
not intended to affect the Commissioner’s enforcement authority under MCSBA, as that
authority pertained to the period prior to the effective date of the MARS Act:

       [The MARS Act is] not intended, and may not be construed, to have any
       effect on the authority of the Commissioner of Financial Regulation to
       regulate mortgage assistance relief service providers under [the MCSBA] or
       on any enforcement actions, including litigation, taken under that authority

                                              19
       3.     Summary

       Under the plain meaning of the text of the MCSBA, a person who offers to

renegotiate a mortgage loan for a homeowner facing foreclosure is offering to assist a

consumer in obtaining an extension of credit. If the person does so in return for the

payment of money by the consumer, the person falls within the definition of “credit

services business” under the statute. The legislative history of the MCSBA and the related

MARS Act confirm that reading.

       We are not alone in this legal interpretation. Although we have not had occasion

previously to assess whether a mortgage loan modification involves an extension of credit

within the meaning of the MCSBA, the federal District Court for the District of Maryland

has done so on several occasions and reached the same conclusion that we do here.17




       as it existed and based on actions that occurred before the effective date of
       this Act.

Chapter 465, §2, Laws of Maryland 2013. Thus, regardless of any changes to the
Commissioner’s authority that the MARS Act made going forward, the Commissioner may
still take actions based on the Commissioner’s regulatory and enforcement authority under
the MCSBA as it existed before the MARS Act. In other words, if a person who offered
to obtain mortgage loan modifications violated the MCSBA before the MARS Act was
enacted, but now would be exempt from the MCSBA under the MARS Act, that person is
not exempt from the MCSBA for past violations, and the Commissioner may still enforce
the MCSBA against that person. This savings provision reinforces the conclusion that a
mortgage assistance relief service provider would likely qualify as credit services business
under the MCSBA as it existed before enactment of the MARS Act.
       17
          See Cabeza v. Richey Law & Associates, 2014 WL 4635381 (D. Md. 2014) (out-
of-state law firm, and its managing attorney, who offered to assist Maryland homeowners
facing foreclosure in obtaining mortgage loan modification engaged in a “credit services
business” as defined in the MCSBA); Robinson v. Nationstar Mortgage, LLC, 2015 WL
4994491 (D. Md. 2015) at *3 n.2 (concluding that, under the MCSBA, the “definition [of

                                            20
Finally, the Commissioner, who is charged by State law with administering and enforcing

the statute, has adopted that interpretation in other enforcement actions and advisory

notices concerning the statute.18

       Thus, in offering, in return for the payment of money,19 to assist Maryland

homeowners facing foreclosure with renegotiating their mortgage loans to obtain a loan

modification, BB&B and Mr. Brown’s activities came within the general definition of

“credit services business” in the MCSBA. Of course, this does not resolve the question as

to whether the MCSBA applies to particular transactions. One must still consider whether

any of the 10 exemptions in the statute applies – in this case, the attorney exemption.




“extension of credit”] plainly encompasses a loan modification”); see also Marchese v. JP
Morgan Chase Bank, N.A., 917 F. Supp. 2d 452, 466 (D. Md. 2013); Barry v. EMC
Mortgage Corp., 2012 WL 3595153 (D. Md. 2012); Allen v. CitiMortgage, Inc., 2011 WL
3428665 (D. Md. 2011).
       18
         See Commissioner of Financial Regulation, Enforcement Actions and Consent
Orders, http://www.dllr.state.md.us/finance/consumers/enforcement.shtml (last visited
July 26, 2016) (listing enforcement actions under MCSBA); Commissioner of Financial
Regulation, Advisory Notice – Loss Mitigation Consulting, Foreclosure Prevention,
Mortgage Loan Modification, and Similar Services under the Maryland Credit Services
Business Act (MCSBA) and the Protection of Homeowners in Foreclosure Act (PHIFA)
(rev. February 20, 2009) http://www.dllr.state.md.us/finance/advisories/advisory9-
08.shtml (last visited July 26, 2016).
       19
          This case is thus distinguishable from Gomez in that there was no direct payment
from the consumer to the tax preparer in connection with the refund anticipation loan in
that case. Although the Court has subsequently limited the extent of that rationale, see
CashCall, Inc., supra ___ Md. at ___, there is no question that the Maryland homeowners
made direct payments to the Respondents here. Indeed, the agreements explicitly recited
that the homeowners’ payments were made “in consideration” for loan renegotiation
services.


                                            21
C.    Whether the Attorney Exemption Applied

      In order to come within the attorney exemption of the MCSBA, an individual must

satisfy its three prongs: (1) the individual must be admitted to the Bar of the Court of

Appeals of Maryland, (2) the individual must render the services within the course and

scope of practice by the individual as a lawyer, and (3) the individual must not engage in

the credit services business “on a regular and continuing basis.”          See CL §14-

1901(e)(3)(vi). Because the statute uses the conjunction “and,” all three prongs must be

met in order for the attorney exemption to apply.

      In relation to the third prong,20 the ALJ found that “BB&B and the attorneys it

employed were engaging in credit services business on a regular and continuing basis.”

The ALJ based this determination on the fact that BB&B entered into 57 agreements with

Maryland homeowners during the nine months between June 11, 2008, and March 12,

2009, including 53 in a seven-and-one-half month period. The finding is also supported

by the fact that hundreds of other Maryland homeowners consulted with the firm about

entering into such an agreement. While the statute does not define the phrase “regular and

continuing,” the ALJ found that “when a small out-of-state law firm has 57 cases with




      20
         In relation to the first prong – “admitted to the Bar of the Court of Appeals of
Maryland” – the Commissioner points out that Mr. Brown has never been admitted to the
Maryland Bar. Respondents reply that, because BB&B employed an attorney admitted to
the Maryland Bar during most of the period, the firm qualified for the attorney exemption,
and because BB&B qualified, so did Mr. Brown. We need not resolve this question,
however, as BB&B and Mr. Brown failed to carry their burden of proof as to the third
prong of the exemption.

                                           22
Maryland consumers in nine months, it constitutes offering the particular services on a

regular and continuing basis.”

       A Maryland attorney who counsels an individual client facing foreclosure and

attempts to negotiate a mortgage loan modification would thus ordinarily be exempt from

the MCSBA.       As the ALJ suggested in her Proposed Decision (adopted by the

Commissioner), there may be cases where there is a significant question at what point an

attorney who frequently provides such services has crossed the line into providing “regular

and continuing” credit services. That, however, is not this case. The consultations and

agreements with Maryland homeowners seeking loan modifications were not only a very

significant part of the firm’s business during the months in question, but also accounted for

most of the work of its Maryland-licensed attorney by the time he left the firm. Thus, there

was substantial evidence supporting the conclusion that BB&B and Mr. Brown engaged in

a credit services business on a regular and continuing basis.

       Citing a Circuit Court decision in another case,21 BB&B and Mr. Brown argue that

“regular and continuing basis” includes only those whose primary business is credit

services. The thrust of their argument is that the category “law firm” (or “lawyer”) and the




       21
         Law offices of Daniel E. Radebaugh LLC v. Maryland, Case No. 03-C-11-001890,
Circuit Court for Baltimore County (Feb. 16, 2012). Respondents also rely on a one-
paragraph order issued in a case in the Circuit Court for Baltimore City. In re Law Offices
of Perry and Associates, et al., Case No. 24-C-12-002031, Circuit Court for Baltimore City
(October 18, 2012). Quite apart from the fact that it is not a reported appellate opinion and
therefore does not qualify as precedent or persuasive authority under Maryland Rule 1-104,
that order neither recites facts nor provides any analysis that might pertain to this case.


                                             23
category “credit services business” are mutually exclusive: one who is primarily engaged

in the practice of law is not engaged in credit services on a regular and continuing basis.22

However, this argument is inconsistent with ordinary principles of statutory interpretation

for at least two reasons.

       First, Respondents’ reading of the statute ignores the third prong and would render

it entirely superfluous. If all lawyers practicing law qualify for the attorney exemption, we

need consider only whether the lawyer is admitted to the Bar of the Court of Appeals of

Maryland and whether the lawyer rendered the services in question within the course and

scope of practice by the individual as a lawyer. 23 The third prong — whether the lawyer



       22
          There is no question that BB&B was a legitimate Virginia law firm founded by a
distinguished member of the bar of that state. But it is also apparent that it seized what it
perceived as a business opportunity generated by the Great Recession of 2008-2009 and
temporarily operated a “credit services business” under Maryland law until it ceased taking
referrals of Maryland homeowners in March 2009.
       23
          Although BB&B and Mr. Brown have not adopted it as one of their arguments
before us, the Court of Special Appeals in its opinion expressed some concern that certain
requirements in the MCSBA would not appear to apply to a lawyer negotiating loan
modifications for homeowners facing foreclosure. Most of these requirements concern
disclosure of information to consumers concerning their rights vis-a-vis consumer
reporting agencies, which are defined in the statute as a person or company that creates
credit reports for third-party lenders. See CL §14-1901(d), CL §14-1201. While such
information is most directly relevant to those with bad credit who are seeking to repair their
credit using a credit repair agency, there is no reason that anyone working with a consumer
trying to improve the consumer’s debt situation — as a consumer seeking a loan
modification is — could not provide this information as well. Consumers with debt
problems could benefit from information about consumer reporting agencies because
actions related to debt can affect credit reports intentionally or unintentionally, and
uninformed consumers may be at risk of accidentally damaging their credit scores. Also,
consumers who are not familiar with the practices of a consumer reporting agency may
decide to investigate their credit reports and correcting information in a credit report could
potentially assist in seeking a loan modification.

                                             24
engages in the credit services business on a regular and continuing basis — would not be

a factor at all. We do not ordinarily read statutes so as to render portions superfluous, In

re Adoption/Guardianship of Tracy K., 434 Md. 198, 206, 73 A.3d 1102 (2013), and we

will not do so here.

       Second, as described above, the MCSBA is ultimately derived from a similar

California statute, the Credit Services Act of 1984, which the Council of State

Governments included in its 1986 suggested state legislation. As enacted in 1984, 24 the

California Credit Services Act defines a “credit services organization” in a fashion nearly

identical to a “credit services business” under Maryland law, and it also contains an

attorney exemption that applies to “[a]ny person licensed to practice law in this state where

the person renders services within the course and scope of his or her practice as an attorney




        These circumstances are thus distinguishable from those in Gomez, where this Court
held that a tax preparer who helped a consumer obtain a “refund anticipation loan” – that
is, a loan for the value of a taxpayer’s expected tax refund usually offered about ten days
before the tax refund will arrive – was not a “credit services business” under the MCSBA,
in part because the requirements of the MCSBA “do not logically apply” to a tax preparer
who facilitates refund advance loans. 427 Md. at 134 n.4, 156-58. Ultimately, a tax
preparer is not seeking to aid consumers with their debt. Rather, a tax preparer seeks to
aid consumers with filing their taxes. So these requirements would be odd for a tax
preparer, even one who helps a consumer obtain a refund advance loan as in Gomez. In
this case, however, these requirements could well apply to a lawyer seeking a loan
modification for a consumer. In any event, “the inapplicability of certain provisions [of
the statute] would not necessarily negate the applicability of the entire statute.” Gomez,
427 Md. at 156 n.26. Were we to hold that the MCSBA did not apply in these
circumstances we would be imputing a broader attorney exemption into the statute than the
Legislature wrote.
       24
         Amendments to the statute in 1992 and subsequent years have changed the
wording somewhat. See Cal. Civ. Code §1789.12.

                                             25
at law.” The recommended legislation from the Council of State Governments is nearly

identical.

       However, the General Assembly did not adopt this language verbatim. The main

textual difference between the original attorney exemption (in California’s 1984 legislation

and the Council of State Governments’ suggested state legislation) and the subsequent

Maryland attorney exemption is that the original attorney exemption did not contain a third

prong; the General Assembly specifically added the additional restriction that an individual

is exempt only when the individual “does not engage in the credit services business on a

regular and continuing basis.”

       That is, the General Assembly based the MCSBA on a statute that exempted all

lawyers practicing law, but it specifically chose to add an additional limitation to the

exemption so as not to exempt all lawyers practicing law. We can understand this only as

reflecting an intent that some Maryland lawyers will be covered by the MCSBA,

specifically those lawyers who regularly engage in activities that meet the definition of

“credit services business,” even if they are also practicing law.25




       25
          As the Circuit Court and Court of Special Appeals suggested, the conduct of Mr.
Brown and the other attorneys at BB&B may also be subject to sanction as the unauthorized
practice of law or as a violation of the rules of professional conduct applicable to lawyers
in Maryland or Virginia. Of course, the potential for professional disciplinary action would
not immunize them from other laws that regulate the same conduct. A law license is not
itself an exemption from other laws that apply to all. See, e.g., Attorney Grievance
Commission v. Nussbaum, 436 Md. 609, 84 A.3d 98 (2014) (attorney who colluded with
competitors in tax liens in the course of his legal practice prosecuted for antitrust violations
and also sanctioned under the rules of professional conduct).

                                              26
       In the end, neither BB&B nor Mr. Brown established that they qualified for the

attorney exemption. There was substantial evidence to support the ALJ’s finding and the

Commissioner’s conclusion: the attorney exemption does not apply to BB&B or Mr.

Brown, because they engaged in credit services business activities during this period on a

regular and continuing basis.

                                             III

                                        Conclusion

       For the reasons set forth above, we hold that the Commissioner accurately construed

the MCSBA in this case and that there was substantial evidence in the administrative record

that: (1) the activities of BB&B and Mr. Brown in regard to the agreements they entered

into with Maryland homeowners during late 2008 and early 2009 came within the

definition of “credit services business” in the MCSBA; and (2) they conducted those

activities on a “regular and continuing basis” during that period and therefore did not

qualify for the attorney exemption in the statute.

       As noted above, in addition to arguing that the MCSBA did not apply to them,

BB&B and Mr. Brown also contended in their petition for judicial review that there was

insufficient evidence that any violations were “willful.” Relying on a Court of Special

Appeals decision that considered various meanings of “willful,” the ALJ concluded that

violations of BB&B and Mr. Brown satisfied one of those definitions. On the other hand,

the ALJ also found that “[t]here was no evidence to prove that [they were] aware of the

governing Maryland statutes and deliberately ignored them.” Because the Circuit Court

concluded that the statute did not apply to them, it appropriately did not address the


                                             27
question of willfulness. Nor was the issue of willfulness briefed or argued on appeal.

Because we have come to a different conclusion than the Circuit Court on the applicability

of the MCSBA, it would now be appropriate for the Circuit Court to address the issue of

willfulness on remand.26


                                          JUDGMENT OF THE COURT OF SPECIAL
                                          APPEALS REVERSED; CASE REMANDED TO
                                          THAT COURT WITH DIRECTIONS TO REVERSE
                                          THE JUDGMENT OF THE CIRCUIT COURT FOR
                                          BALTIMORE CITY AND REMAND THE CASE TO
                                          THAT COURT FOR FURTHER PROCEEDINGS
                                          CONSISTENT WITH THIS OPINION. COSTS TO
                                          BE PAID BY RESPONDENTS.




       26
         To the extent there is truly a question as to whether there is substantial evidence
to support the amount that the Commissioner found that homeowners paid to BB&B, see
footnote 12 above, it may be considered on remand in conjunction with the Circuit Court’s
consideration of the willfulness issue.

                                            28
