Payday lending law violated constitution
Legal Topics | 2008/11/06 22:09
A 1999 state law allowing so-called payday lenders to charge high fees for short-term loans violates the state constitution, the Arkansas Supreme Court ruled Thursday.

In a 6-0 decision, the court said the fees permitted under the 1999 Check Cashers Act were really triple-digit interest rates. The state constitution limits interest rates on loans to 17 percent.

"Because that fee is in reality an amount owed to the lender in return for the use of borrowed money, we must conclude that the fees authorized clearly constitute interest," Justice Paul Danielson wrote.

Through a payday loan in Arkansas, a customer writing a check for $400, for example, typically would receive $350. The lender would keep the check for about two weeks before cashing it.

The customer could buy back the check for $350 during that two-week period, but otherwise would pay the full $400 when the company cashed his check. The $50 charge on a $350 loan for 14 days equates to 371 percent, well above Arkansas' usury limit.

Attorney Todd Turner, who represented the plaintiffs who challenged the Check Cashers Act, said the ruling means it will be impossible for payday lenders to operate in the state.

"It's great for all the Arkansas residents who have been paying 600 percent for these loans," Turner said.

Tom Hardin, attorney for the Arkansas Financial Services Association that sought to preserve the law, did not immediately return a call seeking comment.

Even before Thursday's ruling, the number of payday lenders in the state has dwindled in response to threats of lawsuits from Attorney General Dustin McDaniel. An advocacy group said in a report last month that the number of payday lenders operating in the state has dropped from 237 in March to just 33.

In its 6-0 decision, the court overturned a Pulaski County judge who last year ruled that the 1999 act was constitutional.



[PREV] [1] ..[1548][1549][1550][1551][1552][1553][1554][1555][1556].. [1756] [NEXT]
All
Headline Legal News
Legal Topics
Legal Business
Attorney News
Court News
Court Watch
Areas of Focus
Legal Interview
Opinions
Court eyes Massachusetts church-s..
Toys R Us files for Chapter 11 re..
Court: State, Not Counties Accoun..
With 2 in 3 months, Ohio executio..
Rooney gets road ban after pleadi..
3 bank customers in Germany fined..
Indian court sentences 2 men to d..
FBI Searched Ex-Oklahoma Senator'..
Chicago's lawsuit over sanctuary ..
Supreme Court Justice Ginsburg is..
Challenge to $225M Exxon settleme..
Abortion clinic dispute to be arg..
Supreme Court Backs Dayton Veto o..
Supreme Court's Kagan says Scalia..
EU court rejects Hungary, Slovaki..
NC appeals court restores man's l..
S. Indiana city's mayor defends r..
Military parts dealer guilty in p..
Court: DirecTV owes $15M to South..
Not guilty pleas entered in Lake ..




San Francisco Trademark Lawyer
San Francisco Copyright Lawyer
www.onulawfirm.com
Chicago Business Law Attorney
Corporate Litigation Attorneys
www.rothlawgroup.com
Houston Estate Administration Lawyer
www.trishaenglishlaw.com
Car Accidents Attorneys
New Rochelle Personal Injury
www.kboattorneys.com
Surry County Criminal Defense Lawyers
Yadkin County Family Law Attorneys
www.dirussolaw.com
Cobb County Criminal Attorney
Georgia Criminal Defense Lawyer
www.andrewschwartzlaw.com
Santa Ana Workers' Compensation Lawyers
www.gentryashtonlaw.com
Law Firm Web Design Templates
Lawyer Website Templates
www.webpromo.com
   Legal Resource
Headline Legal News for You to Reach America's Best Legal Professionals. The latest legal news and information - Law Firm, Lawyer and Legal Professional news in the Media.
 
 
 
Copyright © ClickTheLaw.com. All Rights Reserved. The content contained on the web site has been prepared by Click The Law. as a service to the internet community and is not intended to constitute legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance. By using the www.clickthelaw.com you agree to be bound by these Terms & Conditions.

Law Firm Website Design by Lawyer Website Design Blog - Lawyer Web Site Design That Works