Time to Change Careers. (Editorial).
Craighead County Circuit Judge David Laser last week ordered AAA Check Cashing of Jonesboro to pay back twice the amount of money it collected in interest fees between 1997 and April 7, 1999 -- a hit of about $2.5 million.
Laser, like several other judges around the state, concluded that charging what amounted to annual interest rates in the hundreds exceeded the constitutional limit of 17 percent. But the other judges generally voided the contracts between the check-cashers and their prey; Laser is actually making the predators pay.
The damages in this Jonesboro case stopped in April 1999 because that was the effective date of the Check Cashers Act, which included a provision exempting payday advance fees from the definition of interest. But that relief was only temporary because the Arkansas Supreme Court in March declared unconstitutional the very part of the Check Cashers Act that had shielded payday advance fees from the usury limit. The high court has not, however, ruled specifically on whether the payday advance fees themselves are usurious interest.
AAA Check Cashing hasn't said whether it will appeal the verdict. Here's our prediction: No.
Check-cashers have lost a bunch of these cases around the state, but they never appeal -- at least not the usury question -- because they don't want the Supreme Court to have a chance to rule, finally and inarguably, that the fees they charge are usurious. In a ruling (another defeat for the payday advance industry) just last Thursday, Supreme Court Associate Justice Donald L. Corbin pointed out that the court has not yet been given the chance to rule on the central question.
While we appreciate Judge Laser's willingness to hit a payday lender where it hurts, it might have been better in the long run if he had ruled against the approximately 100 plaintiffs in the AAA Check Cashing case. Such a ruling would have almost certainly been overturned, but the appeal would have been a victory for victims of check-cashers across the state.
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|Title Annotation:||big legal setback for check cashing/payday advance services|
|Comment:||Time to Change Careers. (Editorial).(big legal setback for check cashing/payday advance services)|
|Article Type:||Brief Article|
|Date:||Dec 10, 2001|
|Next Article:||Going Out With a Whimper. (Editor's Note).|
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