By: Javi Calderon
Arkansas Attorney General Fighting Online Payday Loans
Dustin McDaniel, the Attorney General for the state of Arkansas, has filed a lawsuit against an online payday loan lending company based in Delaware.
McDaniel claims that the loan company was charging interest rates that violate the state’s constitution and Deceptive Trade Practices Act. According to the complaint, customers were paying over $100 in interest every two weeks for a $400 cash advance.
The suit was filed in Pulaski County and seeks to ban the company from doing business in the state. McDaniel is asking for all loans to be cancelled and all payments to be returned.
The company in question hasreceived a D-minus rating from the Better Business Bureau.
McDaniel has been on a crusade against payday loans since he took office in 2007. In 2008 he sued 20 payday lenders who he believed were in violate of the state’s 17% interest rate cap. He then went on to draft a letter to all 250 of the state’s short-term credit lenders requiring them to shut down or face prosecution.
By the following year all storefronts had closed down and the Arkansas Supreme Court had overruled a 1999 law that was allowing lenders to operate in the state. The Supreme Court ruled that the law was in violation of the state constitution that set the maximum interest rate at 17%.
McDaniel didn’t stop there; he has continued to pursue lenders granting Arkansas consumers payday advances over the Internet.
Just last year, McDaniel’s office filed a lawsuit against a tax company that was offering Arkansas citizens short-term credit loans in expectation of their tax refunds. The suit claimed the company did not provide adequate disclosures and was charging excess fees impermissible under Arkansas law.
Arkansas is one of 17 states to ban payday loans.