Arkansas Blog: Usury is usury

Thanks to repeated wrong-headed jurisprudence in Pulaski circuit court, it took a while to get to this obvious conclusion. But the state Supreme Court has ruled unainmously that calling interest a check cashing fee or cash advance fee doesn't make it something other than interest. The Constitution limits interest to 17 percent on these types of loans.

Arkansas Business has the story on the long-expected, thoroughly unsurprising (it was presaged by any number of pointed preliminary decisions, but the blood-suckers kept sucking while any avenue of greed remained) but historic ruling on check cashers.

I'll give you the link to the full opinion when the syllabus goes on-line.

A statement from the winning lawyer in this case (a heroic figure, in my view, given his determination on this), is on the jump.

The following is a statement from attorney Todd Turner of Arkadelphia regarding today’s decision by the Arkansas Supreme Court declaring that the Check-cashers Act violates the Arkansas Constitution. A copy of the court’s decision is attached.

“We are very pleased with today's ruling. This is a great victory for Arkansas consumers. There are many attorneys, including my co-counsel, Chris Averitt, and organizations who worked very hard on this case and we hope that this will signal an end to usurious payday lending in Arkansas. Arkansans Against Abusive Payday Lending, a coalition of organizations and individuals who have worked to curtail these unfair practices, has been instrumental in developing public awareness of this issue.

The aim of this lawsuit was to stop the state from licensing usurious payday lenders and to remove this unconstitutional law from the books. After five years of litigation, we have accomplished that objective. We especially appreciate the time and commitment of the individuals who have served as plaintiffs in this case. The plaintiffs included payday loan victims and concerned citizens such as North Little Rock Mayor Patrick Henry Hays who never visited a payday loan store but who were nonetheless committed to challenging this legislation.

We have always maintained that the practice of imposing triple-digit interest rates on borrowers was immoral. Today, the Arkansas Supreme Court confirmed that the practice is also illegal.”

Comments

What McDaniel did to check-cashers, Obama will do to coal companies.

Posted by: PumpkinCarver | November 6, 2008 09:54 AM

Well we got rid of the bloodsuckers, but now we've replaced them with the lottery.

Posted by: eark | November 6, 2008 09:57 AM

Usury is usury. Except in Indiana where it's Hoosiery.

Sorry.

Posted by: bopbamboom | November 6, 2008 10:41 AM

Syllabus is up. Click on my name for a link to the opinion.

Posted by: Blue Wilderness | November 6, 2008 10:48 AM

OK, didn't work--

Here's the link: http://courts.arkansas.gov/court_opinions/sc/2008b/20081106/published/08-492.pdf

Posted by: Blue Wilderness | November 6, 2008 10:49 AM

Good job. Another social problem solved once and for all. But, what will high risk credit needers do to keep their heat on until payday? Do you think the utilty company is going to take the risk? A 17% return doesn't come close to covering the risk of that loan, so no bank is going to touch it.

Here's what they're going to do. They are going down to their local illegal loan shark/dope dealer/pimp/bootlegger who pays no taxes and heeds no usury laws or collection laws.

Posted by: bugeyedlittlefreak | November 6, 2008 11:16 AM

Bug, what ever happened to churches and charities that use to help out people in need? If they are too busy trying to take away the rights of others, I guess the state will need to create another government program to take up the slack.

Posted by: eark | November 6, 2008 11:47 AM

The opinion to which Blue Wilderness linked above is from a different case involving a check cashing company's attempt to arbitrate, a case in which constitutionality is not at issue. The ruling in McGhee is available by clicking my name or going here:

http://courts.arkansas.gov/court_opinions/sc/2008b/20081106/published/08-164.pdf

Posted by: Gaddis | November 6, 2008 01:40 PM

Bug,
don't know who you're in bed with other there:

"Do you think the utilty company is going to take the risk?"

The utilities have no choice. If the family is truly in hardship then they must
extend them credit or easier payment terms.

Again, this state ran just fine without payday loans for a century and a half.

There's still pawn shops.
.

Posted by: eLwood | November 6, 2008 03:28 PM

Arkansas Blog

Usury is usury

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