LITTLE ROCK, AR - The Arkansas Supreme Court ruled today that the state's Check Casher's Act does not provide "blanket protection" for payday lenders that charge customers more than the 17 percent a year in interest.
The ruling, by Associated Justice Robert L. Brown, affirms a lower court decision ordering a Russellville check casher to forfeit a $50,000 surety bond it had with Old Republic Surety Company to operate in the state. The ruling further cements the court's stance against the 1999 law passed by the Legislature that says feeds paid by check-cashing customers are not interest, which the constitution caps at 17 percent a year.
Todd Turner, an Arkadelphia lawyer representing those suing the surety company, says today's decision "makes it really clear that you can't ignore the constitution."
Peggy Matson, executive director of the state Board of Collection Agencies, said she had yet to read the opinion Thursday morning. Joel Taylor, a lawyer representing Old Republic, did not immediately return a call for comment.