Washington Law Review


Roger I. Lewis


The recent case of Household Finance Co. v. State involves judicial review of a discretionary power to issue small loan licenses; but the language used by the court is of such breadth that the entire field of judicial review of administrative licensing must be re-examined. The plaintiff (Household Finance Co.) desired to open small loan agencies in Seattle and Vancouver. In compliance with statute, it made application to the Supervisor of Banks for the necessary licenses, but the application was denied. In accordance with statutory procedure, the superior court of Thurston County held a trial de novo. At the conclusion of the hearing, the court decided that the only question on which a decision could be rendered was whether the Supervisor had been arbitrary and capricious in rejecting the application and sustained his denial of the license. In affirming the trial court, the Supreme Court held that the regulation of small loan agencies is a legislative exercise of the police power. The statute confers discretionary power on the Supervisor and it is within the limits of that discretionary power for him to refuse licenses when he finds that the local demand for service is insufficient. Therefore, review de novo of this function would be an unconstitutional exercise of legislative power by the judiciary. When the denial of a license is not arbitrary and capricious, the decision of the Supervisor must stand.

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