Check-Cashing Repeal Fails in Final Attempts.

THE CHECK CASHERS ACT OF 1999 remained in effect as the General Assembly prepared to end the 2001 legislative session, despite per sistent attempts by Sen. Cliff Hoofman, D-North Little Rock, to repeal it.

Hoofman's bill, defeated in February but amended and revived in March, officially died in the Senate on April 9, failing by two votes. Sixteen senators supported the bill, 12 opposed and seven did not vote.

In the House, Rep. Jim Bob Duggar, R-Springdale, sponsored a bill similar to Hoofman's but could not get it approved by the House Insurance and Commerce Committee.

"There's not time to run the bill," Duggar said, adding that telephone regulation bills squeezed the check-cashing bill off the agenda, foiling planned testimony in favor of the bill by a representative of the AARP, formerly American Association of Retired Persons.

The AARP has modellegislation to control the practice of charging a fee for payday advances, Duggar said.

"I'm going to do an interim study on these fees and try to come up with something for the next session," he said. "This will give us time to see about the Supreme Court decision."

The Check Cashers Act was passed by the General Assembly and signed into law by Gov. Mike Huckabee in 1999. The law regulated the payday advance industry, which makes short-term loans through "deferred presentment." Customers write checks to the business, which holds the checks for a specified period, usually two weeks, and advances the customer money for that period. The business charges a fee, usually $10 plus $10 for each $1 00 borrowed.

In addition, the law mandated a licensing procedure overseen by the Arkansas State Board of Collection Agencies.

Critics say that the fees amount to interest at annual percentage rates of between 175 and 1,150 percent and therefore violate the state's constitutional ban on usury. The act specifically exempted the fees from interest limits, a provision that was declared unconstitutional by the state Supreme Court on March 22. The test case has been remanded back to Benton County Circuit Court.

The 1999 bill, sponsored by Sen. Doyle Webb, R-Benton, passed overwhelmingly, supported by campaign contributions and lobbying efforts by the industry. Attorney General Mark Pryor did not oppose the bill, in contrast to his predecessor, Winston Bryant, who had prosecuted three of the businesses for the practice of pay-day advance loans. Pryor settled the three cases for a total of $175,000. The number of payday advance businesses more than tripled after passage of the law.

Neither Pryor nor Huckabee took any position on the repeal attempts this year