For modification -- Chief Justice Hughes, Justices Mountain, Sullivan, Pashman and Schreiber and Judge Conford. Opposed -- None.
These consolidated appeals are here on our certification to the Appellate Division, 70 N.J. 273 (1976), of a judgment declaring the validity of certain regulations promulgated by the defendant Commissioner of the Department of Banking, under and pursuant to the Secondary Mortgage Loan Act, N.J.S.A. 17:11A-34 et seq. The nature of the proceedings culminating in this appeal, the text of the regulations under attack and the grounds of plaintiffs' objections to them are set forth in the per curiam opinion of the Appellate Division. 137 N.J. Super. 325.
On the submission of the appeals to the Appellate Division both sets of plaintiffs limited their contentions to assertions of the facial invalidity of the regulations. The plaintiffs in the Approved Finance Co. case, however, also sought an injunction against enforcement of the regulations pending factual findings as to their applicability to the kind of transactions which the plaintiff loan companies were conducting with certain banks. Moreover, the arguments of both sets of plaintiffs as briefed contain what may be regarded as alternative contentions that if the regulations are valid they are not, or should not properly be deemed, applicable to the kinds of dealings in second mortgage paper being conducted between plaintiff loan companies and plaintiff banks.
The general purpose of the regulations in question is to amplify the statutory specification of the following conduct, prohibited by N.J.S.A. 17:11A-46(k):
solicit business, directly or indirectly, for any other licensee, lender, retail seller of personal property or services or for any other person, whether in this or any other state.
The key regulation in question. N.J.A.C. 3:18-6.2 reads:
The following words and terms, when used in this Subchapter shall have the following meanings unless the context clearly indicates otherwise.
"Lender" means and includes a secondary mortgage loan licensee or any in or out-of-State bank or other financial institution which, by prior agreement and in the normal course of business, acquires individual secondary mortgage loans which have been solicited by a licensee.
"Solicit" means and includes any and all types of advertising or any other form of communication with prospective borrowers which results in the origination of secondary mortgage loans in the name of a licensee which, by prior agreement and in the normal course of business, are subsequently negotiated to a lender.
The regulation purports to amplify the meaning of the words "solicit business" and "lender" in N.J.S.A. 17:11A-46(k).
Regulation N.J.A.C. 3:18-6.1 is unobjectionable, being essentially a restatement of the statutory prohibition of soliciting loans for other lenders. Section 17:11A-46(k). Nor is there ...